TIDMALU
RNS Number : 9086K
Alumasc Group PLC
07 September 2021
7 September 2021
IMMEDIATE RELEASE
THE ALUMASC GROUP PLC
("ALUMASC")
FULL YEAR RESULTS ANNOUNCEMENT
STRONG PERFORMANCE ACROSS ALL DIVISIONS; WELL-POSITIONED TO
BENEFIT FROM LONG-TERM GROWTH DRIVERS
Alumasc (ALU.L), the premium sustainable building products,
systems and solutions Group, announces results for the year ended
30 June 2021.
Commenting on the results reported today, Paul Hooper, Chief
Executive, said:
"After a record first half performance, in which volume growth
was supplemented by around GBP2.5m of sales delayed from 2020 by
the initial Covid-19 lockdown, the numbers today reflect the
determined efforts by Alumasc employees across the Group to ensure
the underlying momentum was maintained throughout the second
half.
I am delighted to report this excellent set of results to our
shareholders and believe Alumasc is well-positioned to benefit from
the long-term growth drivers in our market."
Financial Highlights:
-- Double-digit growth in revenues from continuing operations:
GBP90.5m (2019/20: GBP76.0m): +19.0%
-- Group underlying operating profit GBP11.0m (2019/20:
GBP4.2m): +162% reflecting both strong growth and the benefit of
structural cost and efficiency gains
-- Underlying operating margin: 12.2% (2019/20: 5.5%)
-- Reported PBT GBP9.8 million (2019/20: GBP2.7 million)
-- Robust balance sheet with net bank debt of GBP0.9m (2020: GBP4.3m). Headroom c.GBP23m
-- Underlying EPS: 23.7p (2019/20: 8.2p): +189%
-- Basic EPS: 21.2p (2019/20: 6.3p)
-- Final dividend: 6.25p (2019/20: nil)
o Full year dividend 9.5p (2019/20: 2.0p)
Operational Highlights: Strong performance in all divisions
-- Water Management Division delivered an excellent performance
with operating profit of GBP6.1m (2019/20: GBP4.8m), indicative of
the potential for the business as market conditions normalise
-- Building Envelope Division saw a significant revenue increase
of GBP7.8m (+24%) and a GBP5.2m operating profit improvement,
including a GBP1.4m turnaround at Levolux, resulting in the
division achieving a double-digit underlying margin of 10.4%
-- Housebuilding Products (Timloc) had an outstanding year
growing its revenue by 22% and operating profit by 105% versus a
Covid affected prior year
o Operating margin 23% (2019/20: 13.7%)
o Long-term growth drivers remain strong
-- The Alumasc portfolio is aligned to environmental growth
drivers, with c.80% of sales derived from environmental solution
products
Outlook:
-- Alumasc remains well-positioned to deliver sustainable
growth, underpinned by a clear strategy and strong market
positions:
o Water Management is benefitting from both its UK and
export-focussed strategy
o Building Envelope entered the new year with a strong order
book, supported by the benefits of the recent restructuring
o Housebuilding Products (Timloc) continues to innovate and
develop new products, against a favourable UK housebuilding
backdrop
-- The Group's cost savings programme, liquidity management,
strong balance sheet and improved commercial positioning underpin a
robust platform that positions Alumasc to benefit from the
long-term growth drivers in our markets
-- The Board is cognisant of the potential for short-term
disruption to our customers' operations from shortages of building
materials, labour and road haulage, and delays in the global
container shipping industry
-- Notwithstanding these risks, the Board believes Alumasc's
strong platform provides confidence for another year of
progress
Enquiries:
The Alumasc Group plc +44 (0)1536 383844
Paul Hooper (Chief Executive)
Simon Dray (Group Finance
Director)
Peel Hunt (Broker) +44 (0)207 418 8831
Mike Bell
Ed Allsopp
finnCap (NOMAD) +44 (0)207 220 0561
Julian Blunt
Camarco (Financial PR) alumasc@camarco.co.uk
Ginny Pulbrook +44 (0)203 757 4992
D aniel Sherwen +44 (0)203 781 9241
LEI: 2138002MV11VKZFJ4359
Notes to Editors:
Alumasc is a UK-based supplier of premium 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. The three segments are: Water
Management; Building Envelope; and Housebuilding Products.
Strategic Report
Chairman's Statement
This has been an extremely successful year for Alumasc.
There have been several reasons for this:
-- Our industry -principally UK construction - was fortunate to
be able, indeed encouraged, to continue operating, despite the
presence of the Covid pandemic throughout the year. We pursued this
opportunity enthusiastically while abiding by, and in many cases
exceeding, the stringent rules introduced to manage the attendant
risks.
-- Following the temporary closures that did occur, both of our
own operations and of those of our customers, during the latter
part of the prior financial year, a number of projects resumed
during the year under review, creating demand arguably above the
underlying level. This demand was not easy to accommodate,
particularly within the Covid rulebook and with Brexit looming.
However, the combination of prudent stock building and magnificent
co-operation from our workforce enabled us to sustain a high level
of service in response. We believe that gains in market share were
won as a result.
-- During the year prior to that under review, Alumasc had
significantly streamlined its business, reducing the number of
operating/manufacturing sites from ten to six and taking costs out
of the business amounting to some GBP2.4 million per annum in the
process. As a result, a higher proportion of the margins earned on
healthy sales was converted to profit and profit margins rose as a
result.
-- Finally, and perhaps most significantly, our management teams
and their colleagues throughout the company responded with calmness
and determination to the very uncertain conditions brought about by
the pandemic and made this outcome possible. I thank them all on
behalf of fellow Shareholders and Directors.
Performance
Revenues of GBP90.5 million were GBP14.5 million (19.0%) ahead
of the prior year, which was badly affected by Covid. They were
very slightly ahead of the previous "pre-pandemic" year. Roofing
Products grew by a remarkable 62% year on year and Housebuilding
Products by 22%, both arguably benefitting from the demand that was
building during the interruptions suffered in the prior year.
Levolux was the only business that saw a reduction in sales,
reflecting both the weakness in commercial activity in the period
and the intentional focusing of that business to a narrower, more
selective market.
Profit, however, was well ahead, not just of the depressed prior
year but also of the earlier year, not so affected. Trading Profit
of GBP12.9 million, hence trading margins, were double that of the
earlier year, reflecting the reduction in costs referred to above
and further efficiencies achieved during the intervening period.
See note 4.
Similar improvements in the group's profit have benefitted cash
and more than recovered the group's capacity to pay dividends.
Alumasc's focus on the prudent management of cash has reduced
net bank debt from GBP5.1 million two years ago to GBP4.3 million
one year ago at the height of the Pandemic's impact, and further to
GBP0.9 million at 30 June 2021. With debt facilities in excess of
GBP20 million, this places the group in a strong position for
further development.
Dividend
The unpredictable consequences of Covid led your Board to
suspend dividend payments in the conservation of cash during the
first half of last year; and payments were only resumed, albeit at
a low level by historical standards, as the year progressed. It is
enormously gratifying to be able to recover this year's dividend
payment above pre-pandemic levels and your Board is recommending an
increase in the final dividend to 6.25p per share (2020: 2p per
share), making a total for the year of 9.5p. This compares with a
total of 2p in 2019/20, and 7.35p in the earlier "pre-pandemic"
year.
Strategy and Corporate Activity
The principal focus has been operational during the year, always
within the strategic framework set out in this and previous
reports. Hence, it has been a quiet year in the corporate sphere.
There has, however, been progress on the twin fronts of
outperforming our sector and evolving our sustainable credentials,
illustrated by the ESG Statement in the full Annual report and
accounts.
Pensions
There has been significant progress also in reducing the
pensions legacy, partly due to the impact of rising gilt yields on
our liabilities, and partly to an excellent investment
performance.
The Boardroom
Following six years in the post, David Armfield resigned his
non-executive directorship during the year in order to concentrate
on his other activities. I am grateful to David for his wise
support during his time with Alumasc and wish him every
success.
In March this year, Simon Dray was appointed to the vacant
position of Group Finance Director and is a welcome addition to our
team. His broad experience is well matched to our strategic targets
and public company responsibilities.
Prospects
It is never easy to follow such success, particularly when an
element of that success was due to an abnormal carry over of demand
from the prior year. However, demand from our markets remains
buoyant, including an anticipated partial recovery from the much
depressed commercial sector, which unsurprisingly was most affected
by the events of the past year and a half.
The principal area of concern, therefore, relates to the
availability of materials and human resources to meet this demand
and the cost implications of shortages, which may dampen demand in
certain areas, possibly permanently delaying some projects already
in the pipeline. At present, the industry understands and is
absorbing these rising costs and additional capacity has a way of
soon following on the heels of unsatisfied demand.
It is therefore reasonable to anticipate another strong
performance from Alumasc in the coming year, as the UK economy
recovers from its recent misfortunes.
John McCall
Chairman
Chief Executive's Review
Financial Highlights and Overview
2020/21 2019/20 % change
Group performance:
Revenue (GBPm) * 90.5 76.0 +19%
Underlying profit before tax (GBPm) * 10.5 3.7 +187%
Statutory profit before tax (GBPm) 9.8 2.7 +263%
Underlying earnings per share (pence) * 23.7 8.2 +189%
Basic earnings per share (pence) 21.2 6.3 +237%
Dividends per share (pence) 9.5 2.0 +375%
* A reconciliation of underlying to statutory profit before tax
is provided in note 5
Covid-19
The response of our employees to the challenges faced this year
has been exceptional. Covid-19 has brought many difficult
challenges but our number one priority is always the health, safety
and wellbeing of our people and visitors to sites. The actions
taken to comply, as a minimum, with government advice has resulted
in several unannounced HSE visits that have confirmed the actions
taken with very positive feedback being received. During the year
we had one small Covid-19 outbreak involving less than 20 people.
Swift management action contained this with a full return to work
within 10 days. Our new norm allowed us to adapt our working
practices to have more people working from home while maintaining a
good premium customer service. I am immensely proud of our
incredible people and all that they have achieved.
Overview of performance
Following an outstanding and record performance in H1, which
included around GBP2.5 million of pent-up demand revenue carried
forward from the prior year Covid affected lockdown, Alumasc's
underlying momentum was maintained throughout H2, despite the
effects of Brexit. Growth was achieved in all three divisions
against a backdrop of resilient building and construction activity
along with market share gains. In addition, raw material and
shipping cost increases to date have been successfully recovered
through sales price increases.
Close control of costs and the benefit of the restructuring
implemented in FY 2020 have also contributed to the improved
profitability. Levolux delivered a substantially improved
performance during the financial year, returning to consistent
profitability on improved tendering and contract management
disciplines and a streamlined cost base.
The star performer of the year was undoubtedly the Building
Envelope Division which turned a prior year loss of GBP0.9 million
into a GBP4.3 million profit. This was a testament to several
factors, but both parts of this division, Roofing and Levolux,
contributed significantly. As you will see in the section on this
division it was really a volume/market share increase that improved
Roofing's performance while Levolux had a significant turnaround
into profit from a prior year loss assisted by significant cost
reductions and efficiency improvements.
The remaining two divisions had record performances, both driven
by volume/market share gains and operational efficiencies. New
products were also important and, in particular, for the
Housebuilding Products Division which launched a record number,
supported by its industry leading service, with some considerable
success.
Strategy and performance against strategic objectives
Alumasc's strategy is to:
1. Build leading positions in specialist markets to grow
revenues faster than the UK construction market
Although the impact of Covid-19 makes any analysis of the most
recent year difficult when compared with the consistent
outperformance of the previous years we have however gained market
share and grown the business.
2. Augment UK revenue growth through the development of selected export markets
Compared to the prior year in which export revenues were 15% of
Group revenues, during the year under review export revenues were
14% of Group revenue. However, actual export sales grew by GBP1.1
million (10%). Export sales at AWMS (Gatic and Wade) were
marginally behind the prior year, due to a large one-off European
order in 2019/20. However sales to the Far East grew strongly,
supported by investment in both sales and marketing. The year end
export order book for AWMS stood at GBP1.7 million, versus GBP1.2
million at the prior year end.
Meanwhile, Levolux accelerated its export revenue by a strong
32%. At the start of the new financial year a second experienced US
Senior VP of sales has been appointed in the USA. We anticipate
good further growth in the USA from this development.
3. Grow profit at a faster rate than revenue by improving operating margins
The Group's underlying operating margins grew from a Covid
affected prior year 5.5% to 12.2% (and also improved on underlying
operating margins in 2019 of 6.5%) representing a pleasing result.
This movement into a 'double-digit percentage' return has been
achieved earlier than expected. The prior year's structural GBP2.4
million cost savings have been a significant contribution along
with increased sales.
Executing our priorities in FY20/21
Management accelerated the pace of strategic development during
its 2021 financial year:
1. Levolux business improvement plan
The objective of this plan was to return Levolux to sustainable
profit. At the start of the year the Board announced a refocus of
the business to those areas where it could clearly differentiate
and add most value to customers and therefore shareholders. This
included concentration on developing the more profitable areas of
the business, simplifying operational delivery and reducing risk.
The key elements have been:
-- Integrated sales approach. Incorporate Levolux solar shading,
screening and balconies as major constituents in a new "Alumasc
Building Envelope" Division, providing integrated solutions for
developers and specifiers seeking high quality roofing and walling
systems. A new, collaborative divisional sales approach has
increased Levolux's existing market reach and leverages existing
strong customer relationships. This is the second year of this new
division's formation.
This objective is being achieved and examples where the
'cross-sell' and single expert service has been welcomed by
specifiers and clients are growing. There are several examples of
this including the new DWP Welsh Valleys offices.
-- Leverage core strengths. Focus on design and supply
activities as we do in the rest of the Alumasc Group. In-house
installation will only be offered where this service is
particularly valuable to customers and Levolux. Over time this will
improve margin mix and enhance profit margins.
This objective is being achieved with the order book
strengthening for supply only projects.
-- Export opportunities. Invest in local technical sales
resources to accelerate growth in the profitable Levolux business
in North America. Current revenues in this market are circa GBP4.7
million (+32% v PY). This objective was achieved with a US-based
Senior VP appointed.
-- Reduce overhead. We announced a significant restructuring of
the existing Levolux operational and overhead cost base, including
a relocation of sites, with fixed cost savings achieved of GBP1.8
million in the Group's 2019/20 financial year versus a target
GBP1.0 million, and further significant annualised savings of
GBP0.7 million. These benefits have assisted the 2020/21 financial
year.
Alumasc continues to believe that Levolux, as part of the
Building Envelope Division, has a great future potential and
continues to be one of the Group's strongest brands.
2. Develop further opportunities for specification cross selling
There remains a significant future opportunity for the Group
from offering an integrated "Building Envelope" of exterior
building products facilitating the integration of walling, roofing,
balconies, solar shading and integrated aluminium detailing. This
not only provides a full external envelope solution but also
mitigates both client's and contractor's risks by ensuring that the
horizontal and vertical planes are detailed to remove tolerance and
interfacing detail issues. Closer working between divisions has led
to cross-selling opportunities. This will continue to be a focus
going forward.
3. Implementation of a more cost-efficient operating structure
Following the move in the prior year of the AWMS Gatic Slotdrain
manufacturing from a leased facility in Dover to the freehold
AWMS's Wade facility and the restructuring of Levolux described
above, some GBP0.6 million per annum has been saved in leased
property costs. The objective to move to six facilities from ten
has also been achieved.
Total annualised cost savings of GBP2.4 million were achieved in
the prior year versus a target of GBP2.0 million and these
structural cost savings have assisted the current year.
4. Prioritising and focusing investment to drive profitable growth
Capital expenditure was GBP2.0 million, slightly below
depreciation which was GBP2.3 million.
Once again investment has been focused on our businesses with
the greatest manufacturing activity: our Water Management business
and Timloc. Within this was a continued investment in tooling at
strategic suppliers for the Water Management business which has
improved manufacturing efficiencies and significantly lowered the
carbon footprint of our suppliers along with ensuring continuity of
supply. Investment continued at Timloc, including to support new
product launches. The benefit of the investments is evident in the
relatively strong performances of these businesses.
Investment in new people was directed into expanding the sales
reach, notably in the Building Envelope Division where previously
weaker areas of the UK now have a stronger senior sales
representation. Growing Levolux and Water Management divisional
export sales have also been a focus.
5. Proactive management of our portfolio of businesses
The Group continues to seek to grow through bolt-on acquisitions
and there are no plans to make divestments.
6. Remaining closely aligned with the sustainability agenda
With the ever-increasing low carbon and sustainable agenda
Alumasc is in a perfect position to increase supply solutions to
its customers that target these criteria. Not only does it have
strong positions in energy management through its presence in solar
shading, which can reduce the energy consumption required to cool a
building, but it also has innovative Roofing solutions, such as
Olivine, which can actually reduce CO(2) in the environment. Within
the Water Management Division, the increasing scarcity of water can
be managed very successfully. There are examples where both
divisions combine to provide a 'Blue Roof'. This, in effect,
produces an equivalent to an attenuation tank on a flat roof
allowing the controlled egress into the water effluent systems
while saving clients the significant alternative cost of an
attenuation tank installation. Our Housebuilding Products Division
has also significantly contributed to the energy management within
housing with its sealed ventilation systems, cavity closer and
radiator seals. It is constantly innovating and launching new
products that deliver sustainable solutions for our clients.
All divisions are totally committed to, and insist on, the use
of recycled material where appropriate. Alumasc is very proud to be
able to state that 75% of the Group's products are sourced from
recyclable material.
The relentless pursuit of both innovative energy and water
management solutions combined with the increasing use of recycled
material will continue. Alumasc is already well placed in this
regard. Our bespoke approach to product and specification means
customers will be able to meet more stringent environmental
criteria in the years ahead.
All divisions have plans in place to work towards the Net Zero
government led construction targets by 2050.
Overview of performance
Revenue analysis
Revenue grew by GBP14.5 million (19%) compared to a prior year
Covid affected performance. This included some carry over of
pent-up demand from the Covid-disrupted prior year but also,
significantly, benefitted from investing in high quality Roofing
salesmen, launching new products and winning market share.
Gross margin
Alumasc's Gross Margin grew by 6.2 percentage points, to 35.9%,
a very strong performance and a great testament to the management
actions taken in saving costs, increasing efficiencies and growing
margins.
Net fixed and operating expenses
Net fixed and operating expenses increased by GBP1.9 million
(excluding any furlough benefit in FY20) during the year mainly due
to increased sales resource and variable remuneration.
Underlying operating profit
Underlying operating profit was GBP11.0 million compared with
GBP4.2 million in the prior year. This was a very strong
performance with all 3 divisions performing significantly better
than the prior year.
Bank interest
Bank interest of GBP0.3 million was similar to the prior
year.
Underlying profit before tax
Underlying profit before tax was GBP10.5 million (2019/20:
GBP3.7 million - Covid affected).
Non-underlying, non-recurring items
Non-underlying and non-recurring items amounted to a GBP0.7
million net cost in the period compared with a GBP1.3 million net
cost in the prior year. Further details are given in the Financial
Review.
Coronavirus Job Retention Scheme
Government grant income of GBP0.1 million was repaid during the
period in relation to Coronavirus Job Retention Scheme income that
had been claimed in the previous financial period for employees
that have, unfortunately, subsequently been made redundant.
Profit after tax for the year
The Group's resulting overall statutory profit after tax for the
year was GBP7.6 million (2019/20: GBP2.3 million).
Divisional review
(a) Water Management
Revenue: GBP38.4 million (2019/20: GBP33.7 million)
Underlying operating profit*: GBP6.1 million (2019/20: GBP4.8
million)
Underlying operating margin*: 15.9% (2019/20: 14.3%)
Operating profit: GBP6.0 million (2019/20: GBP4.6 million)
* Prior to restructuring costs of GBP0.1 million in 2019/20 and
brand amortisation charges of GBP0.1 million in both years
Water Management produced a record profit of GBP6.1 million
which was GBP1.3 million (27%) higher than the previous year.
The drivers of the improvement were revenue related (which
increased by GBP4.7 million (14%)) and by selective price
increases, product portfolio management, cost reductions (partly
brought about by the move of Gatic Slotdrain manufacturing from
Dover to Wade's freehold facility), and general efficiency
improvement and tight cost control.
Water Management's operating profit return on sales increased to
15.9% from a prior year of 14.3%. This was a very encouraging
performance and is indicative of improved margins.
(b) Building Envelope
Revenue: GBP41.0 million (2019/20: GBP33.2 million)
Underlying operating profit / (loss)*: GBP4.3 million (2019/20:
GBP(0.9) million)
Underlying operating margin*: 10.4% (2019/20: (2.8)%)
Operating profit / (loss): GBP4.1 million (2019/20: GBP(1.4)
million)
* Prior to restructuring costs of GBP0.3 million in 2019/20 and
brand amortisation charges of GBP0.2 million in both years
The Building Envelope division sells principally into the high
end UK commercial and residential new build construction
market.
Levolux's restructuring has taken significant cost out of the
business and when combined with a more selective strategy for work
that it will target with a focus on supply only, along with a
stronger push into export markets, the benefits showed in the year
with an outstanding GBP1.4 million turnaround from a GBP0.9 million
loss to an encouraging GBP0.5 million profit. This was the result
of following the very effective turnaround plan.
Alumasc Roofing's performance was outstanding and driven
strongly within the Refurbishment sector. Five new salespeople were
recruited and significantly strengthened some of our historically
under-represented markets in the UK whilst technical services
staffing was increased across the country. It went from strength to
strength and with the pressure of Covid-19 encouraging more
external work, particularly for schools and health boards, Roofing
benefited and increased its revenue stream whilst also securing
additional market share.
(c) Housebuilding Products
Revenue: GBP11.1 million (2019/20: GBP9.1 million)
Underlying operating profit*: GBP2.6 million (2019/20: GBP1.2
million)
Underlying operating margin*: 23.0% (2019/20: 13.7%)
Operating profit: GBP2.5 million (2019/20: GBP1.2 million)
* Prior to restructuring costs of GBP0.1 million in 2020/21
Timloc, our Housebuilding Products Division, had an outstanding
year growing its revenue by 22% and PBIT by 105% (versus a Covid
affected prior year). In addition, during a challenging year,
Timloc continued to launch new products, improve efficiencies and
maintain 100% OTIF to customers. Timloc continues to receive very
positive feedback from its customers on its excellent service and
promotes this through its '#TrustTimloc to deliver' strapline.
New product development is an important factor in Timloc's
success and during the year it successfully launched a number of
new products including Rad-Seal face-fix, FR60 fire rated cavity
closer and FRSTOP cavity stop socks.
With its constant focus on improving efficiencies, new product
development and customer service Timloc is well positioned to
maximise opportunities presented by the housebuilding sector.
Outlook
Alumasc's cost savings programme, liquidity management, strong
balance sheet and improved commercial positioning underpin a robust
platform that positions Alumasc to benefit from the long-term
growth drivers in our markets. Alumasc's primary aim is to manage
the long-term sustainability of the business and to focus on its
key strategic objectives, growing revenues faster than the UK
construction market and being a supplier of sustainable building
products.
The Board believes Alumasc remains well positioned to deliver
sustainable earnings progression, underpinned by a clear strategy
and strong market positions, together with:
-- Water Management benefiting from both its UK and
export-focussed strategy, and a growing online offering;
-- Building Envelope entered the new year with a strong order
book, supported by specification cross-selling and restructuring
benefits;
-- Housebuilding Products continues to innovate and develop new
products, against a favourable backdrop of structural UK housing
shortage; and
-- the major restructuring of the Levolux business within the
Building Envelope Division.
Further investment opportunities exist in:
-- sales resource and manufacturing capacity
-- bolt-on M&A to expand capabilities, product range and
routes to market.
Demand remains strong entering the new financial year, which has
started in line with management's expectations. The Board is
however cognisant of the potential for short-term disruption to our
customers' operations from shortages of building materials, labour
and road haulage, and delays in the global container shipping
industry.
Notwithstanding these risks, a strong platform is now in place
which should provide the Board with confidence for another strong
year.
Paul Hooper
Chief Executive
7 September 2021
Financial Review
Reconciliation of underlying to statutory profit before tax
The underlying profit before tax for the 2020/21 financial year
of GBP10.5 million reconciles to the statutory profit before tax of
GBP9.8 million as follows:
2020/21 2019/20
GBPm GBPm
Underlying profit before tax 10.5 3.7
Brand amortisation (0.2) (0.2)
Net IAS 19 defined benefit pension
scheme costs (0.3) (0.3)
IAS 19 past service cost in respect (0.1) -
of GMP equalisation
Restructuring & relocation costs (0.1) (0.8)
Net gain from business disposals - 0.3
Statutory profit before tax 9.8 2.7
======== ========
The reconciling items were:
-- Amortisation of acquired brands of GBP0.2 million (2019/20:
GBP0.2 million). This is a non-cash charge arising from the
application of accounting standards, to write off the estimated
value of brands associated with acquired businesses over their
anticipated useful life.
-- Net IAS 19 defined benefit pension scheme costs of GBP0.3
million (2019/20: GBP0.3 million) are also non-cash charges. These
relate to the Group's legacy defined benefit pension scheme, which
was closed to future accrual in 2009. The value of the charge is
determined by actuarial assessment and represents the notional
financing cost of the Group's pension deficit.
-- A one-off IAS 19 past service cost of GBP0.1 million
(2019/20: GBPnil), representing an increase in the estimated cost
of guaranteed minimum pension equalisation between men and women,
following a High Court ruling in November 2020.
-- One-off restructuring and relocation costs of GBP0.1 million
(2019/20: GBP0.8 million) following changes in the estimated cost
of several material reorganisation projects, which were announced
during the 2019/20 financial year.
-- The net gain from business disposals was recognised in the
prior year following the receipt of GBP0.3 million of deferred
consideration relating to the divestment of the Alumasc Facades
business.
Taxation
The Group's underlying effective tax rate was 19.5% (2019/20:
20.3%), slightly above the UK statutory rate of tax of 19%
applicable to the Group's financial year due to certain costs that
are disallowable for tax purposes. We expect the Group's underlying
tax rate to be circa 20% in the 2021/22 financial year.
The Group's effective tax rate on statutory profit before tax
was 22.6% (2019/20: 16.4%). Reconciliations from the actual to
statutory rates of tax are provided in note 7. The reconciling
items chiefly relate to the tax treatment of the one-off items in
the Group's income statement and the deferred tax impact of the
increase in future tax rate from 19% to 25% from 1 April 2023.
Earnings per share
Underlying earnings per share for the year was 23.7 pence
(2019/20: 8.2 pence). This increase is consistent with the
increased underlying profit before tax for the year.
Basic earnings per share of 21.2 pence (2019/20: 6.3 pence)
reflected both the increase in underlying profit before tax for the
year and the lower level of non-underlying costs in 2020/21
relative to 2019/20.
Dividends
The Board have recommended to shareholders a final dividend of
6.25 pence per share (2019/20: 2.0 pence), which will absorb an
estimated GBP2.2m of shareholders' funds. This has not been accrued
in these accounts as it was proposed after the end of the financial
year. Subject to shareholder approval at the Annual General
Meeting, it will be paid on 29 October 2021 to members on the share
register on 24 September 2021.
Together with the interim dividend of 3.25p (2019/20: nil) paid
to shareholders on 6 April 2021, this will bring the total
distribution for the year to 9.5 pence per share (2019/20: 2.0
pence), which is covered 2.5 times (2019/20: 4.1 times) by
underlying earnings per share.
The Board continues to follow a progressive distribution policy,
where dividends rise broadly in line with earnings, while
maintaining sensible cover.
Summarised Cash Flow Statement
2020/21 2019/20
GBPm GBPm
EBITDA * 13.8 6.2
Change in working capital (0.7) 0.7
VAT (paid)/deferred (1.1) 1.8
Operating cash flow 12.0 8.7
Capital expenditure (2.0) (1.7)
Interest (0.2) (0.3)
Tax (0.2) (0.1)
Pension deficit funding (2.6) (2.3)
Finance lease payments (0.9) (0.5)
Dividend payments (1.9) (1.6)
Sub total 4.2 2.2
Non-underlying payments (0.8) (1.4)
Net cash flow 3.4 0.8
============= ========
Net bank debt at the year end 0.9 4.3
============= ========
* EBITDA: Underlying operating profit from continuing
operations before interest, tax, depreciation and amortisation
Cashflows and net debt
At the onset of the Covid-19 pandemic in the UK, in the second
half of financial year 2019/20, the Group undertook a series of
measures to conserve cash, including agreements to defer GBP1.8
million of VAT and GBP0.6 million of pension payments. The Group's
cash management activities in financial year 2020/21 have been
focused on repaying these deferred amounts as they fall due, along
with managing the working capital demands of a period of strong
growth.
The Group's operating cashflow was GBP12.0 million (2019/20:
GBP8.7 million), after a cash outflow into working capital of
GBP1.8 million, which includes payment of GBP1.1 million of VAT
deferred from 2019/20 (2019/20: GBP2.5 million inflow, with GBP1.8
million of VAT payment deferral). The remaining GBP0.7 million VAT
deferral will be repaid in the first half of 2021/22. Trade working
capital as a percentage of revenue was 13.9% at 30 June 2021 (30
June 2020: 17.7%).
Capital expenditure was GBP2.0 million (2019/20: GBP1.7
million), representing 86% of depreciation (2019/20: 87%). The main
investments were on upgrading equipment at our Housebuilding
Products facility in Howden, East Yorkshire, and tooling at our
Water Management division. The Board see further opportunities for
targeted investments to deliver organic growth, and expect capital
expenditure to remain above depreciation for the medium term.
Tax payments of GBP0.2 million were made in the year (2019/20:
GBP0.1 million). The current year payment is stated net of a GBP0.4
million (2019/20: GBPnil) tax refund relating to financial year
2018/19.
The Group recorded a net cash inflow for the year of GBP3.4
million (2019/20: GBP0.8m), reducing net debt at 30 June 2021 to
GBP0.9 million (30 June 2020: GBP4.3 million).
Statement of financial position and return on investment
Group net assets increased by GBP16.3 million in the year to
GBP36.1 million at 30 June 2021, a consequence of the profit
retained for the year and a reduction in the pension deficit.
The Group defines its capital invested as the sum of
shareholders' funds, including historic goodwill but excluding net
bank debt, pension deficit (net of tax) and lease liabilities. Post
tax return on investment (underlying operating profit divided by
capital invested) was 19.8% (2019/20: 7.2%), reflecting the
improved operating performance and close management of capital
employed during the year.
Pensions
The Group accounts for its defined benefit retirement
obligations in accordance with IAS 19 Employee Benefits, based on
the market value of scheme assets and a valuation of scheme
liabilities using a discount rate based on AA corporate bond yields
at year end. The IAS 19 defined benefit pension scheme deficit at
30 June 2021 was GBP4.6 million (30 June 2020: GBP19.3 million).
Scheme assets increased by GBP9.2 million, on a strong investment
performance and GBP2.6 million of deficit reduction payments made
by the Group in the period. Scheme liabilities decreased by GBP5.5
million, with an increase in the discount rate offsetting an
increase in inflation. As funding levels rise, the scheme is
adopting a lower risk investment strategy, in which interest rate
and inflation risks are more closely hedged, which should reduce
volatility in the deficit valuation going forward.
The deficit reduction payments are agreed between the Group and
the scheme's trustees, based on triennial actuarial valuations. At
the last review on 31 March 2019, Alumasc agreed to pay GBP2.3m
annually under a seven year recovery plan. As part of its Covid-19
cash conservation measures, the Group agreed with the trustees to
defer GBP0.6 million of deficit reduction payments due in financial
year 2019/20. GBP0.4 million of this was repaid over financial year
2020/21, and the remaining GBP0.2 million will be repaid in the
first half of financial year 2021/22.
Banking facilities and covenants
The Group maintains facilities with its banking partners to
ensure the availability of sufficient liquidity to meet the Group's
operational and strategic needs, at optimal cost. The Group
projects facility utilisation and compliance with the associated
covenants during its short-term forecasting, annual budgeting and
strategic planning exercises to ensure adequate headroom is
maintained.
During the year, the expiry date of the Group's revolving credit
facility was extended by one year. Alumasc's current banking
facilities comprise:
-- An unsecured committed three-year revolving credit facility
of GBP20.0 million, with a revised expiry date of April 2023 and a
further one year extension period;
-- Overdraft facilities, repayable on demand, of GBP4.0
million.
The covenants associated with these facilities are set out
below, together with the reported figures at 30 June 2021 and
2020:
Covenant 30 June 2021 30 June 2020
Net debt: EBITDA <3.5* 0.1 0.8
Interest cover >2.5* 42.1 17.3
* changes to <2.5 and >4 from 31 December 2021.
Going Concern
In assessing the Group's ability to continue as a going concern,
the Board has considered medium-term forecasts based on the Group's
approved budget and three year plan. The Board has also considered
stress test scenarios modelled on both a resumption of Government
lockdowns and a 20% reduction in revenue for the period to
September 2022.
Under the stress test scenarios, there remained adequate
headroom in banking facilities and no breach of banking covenants
over the period covered by the models. The Board also took note of
the Group's further ability to reduce its cost base and/or conserve
cash resources at short notice if necessary.
A reverse stress test scenario, that would lead to a breach of
the Group's banking covenants, was also modelled. The Board
considered the risk of such a scenario arising to be remote.
Having taken into account the scenario models above, and in
light of the bank facility headroom under various scenarios, the
Directors consider that the Group has adequate resources to
continue trading for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
financial statements. See note 1 for the full Going Concern
assessment.
Simon Dray
Group Finance Director
7 September 2021
The contents of this announcement have been extracted from the
annual report and accounts for the year ended 30 June 2021 which
will be dispatched to shareholders on or around 23 September 2021
and will be available at www.alumasc.co.uk.
PRINCIPAL RISKS AND UNCERTAINTIES
Risks and uncertainties Mitigating actions taken
COVID-19
* The company took swift action in 2020 and managed
Comment costs and cash flow intensively. Capital expenditure
and non-essential new hires were delayed.
The Coronavirus pandemic
is still impacting our
customers' businesses * The primary focus was on the health and wellbeing of
and the way we work. staff and additional communication channels were
As the duration of the established. In addition, a new wellbeing app has
pandemic is uncertain, been made available to all staff to help to mitigate
concerns remain over stress at home and in the workplace.
the potential risk of
future lockdowns and
restrictions returning * Staff, where possible, switched to working from home
together with possibly without disruption. All manufacturing sites have been
new variants of Covid-19. operational with additional Covid-19 protocols this
financial year.
* Supply chain remained resilient.
* Exports and internet sales have been expanding and
helped to gain new customers/market share.
* Some business opportunities and mitigations used
during the pandemic (including use of TEAMS) continue
to provide ways to trade efficiently and improve
margin/revenue. Best practices and new ways of
working, that proved to be effective, will be adopted
going forward.
* All Government guidelines on Health & Safety,
including social distancing were implemented and
continue to be followed on all sites.
* With new ways of working the business is very agile
and can quickly implement Government guidelines to
protect employees and customers from Covid-19. There
is now greater use of IT and other flexible ways of
working have been adopted.
--------------------------------------------------------------
Health and safety risks
* Health and safety is the number one priority of
Comment management and the first Board agenda item.
The Group has a strong
overall track record * Risk assessments are carried out and safe systems of
of health and safety work documented and communicated.
management performance,
with the number of lost
time accidents significantly * All safety incidents and significant near misses are
reduced. reported at Board level monthly, with appropriate
remedial action taken.
* Group health and safety best practice days are held
twice a year, chaired by the Chief Executive.
* Annual audits of health and safety are conducted in
all Group businesses by independent consultants and
other specialist advisers.
* Specific focus on improving safety of higher risk
operations, with external consultancy support as
needed.
--------------------------------------------------------------
Staff recruitment and
retention risks * Increasing focus of Board and Executive Committee on
staff retention and reward, supported by HR and
Comment external advice.
Including recruitment,
retention, succession, * Competitive remuneration/incentive rates paid to
people development. Risk attract and retain talented employees.
of loss of skills, ability
to innovate and improve.
* Employee numbers and changes monitored in monthly
subsidiary Board meetings.
* Retention plans for key, high performing, and
high-potential employees.
* Training and development programmes.
* The Remuneration Committee considers retention and
motivation when considering the Remuneration
framework.
* Succession planning.
--------------------------------------------------------------
Product/service differentiation
relative to competition * A devolved operating model with both group and local
not developed management responsible for developing a deep
or maintained knowledge of our specialist markets and identifying
opportunities and emerging market trends.
Comment
Innovation, an agile * Innovation best practice planned at Group level and
and entrepreneurial spirit more regularly in each business. New product ideas
is encouraged in all are discussed as part of the businesses' strategy.
Group companies. Constantly
looking for innovation
for new products, particularly * Annual Group strategy meetings encourage innovation
those that contribute and "blue sky" thinking.
to sustainability within
the built environment.
* New product introduction/development KPI used to
monitor progress.
* Monitoring the market for potentially new and/or
disruptive technologies.
* Customer feedback considered in the design and /or
supply of additional products and services.
* Agile approach to business and an ability to meet
increasing demand for products.
--------------------------------------------------------------
Loss of key customers
* Cross selling of products encouraged to grow revenues,
Comment and to introduce customers to all our product ranges.
Generally, the Group
has a good track record * Develop and maintain strong customer relationships
of customer retention through service excellence and dedicated account
and has a diversified management.
customer base.
* Product, system and service differentiation and
reliability.
* Project tracking and enquiry/quote conversion rate
KPI.
* Increasing use of, and investment in, customer
relationship management (CRM) software.
* Organisational and business agility to adapt to
changing and emerging customer needs.
--------------------------------------------------------------
Legacy defined benefit
pension obligations * Continue to grow the business so the relative
affordability of pension deficit contributions is
Comment improved over time. Active management of scheme
liabilities and assets to reduce deficit, with
Alumasc's pension obligations particular success during the year.
are material relative
to its market capitalisation
and shareholders' funds. * Continue to maintain constructive relationship with
Pension Trustees.
* Affordable pension funding commitments agreed and
met.
* Regular review at Group Board level.
* Use of specialist advisors.
* Investment performance and risk/return balance
overseen by an Investment Committee.
* The Trustees are pursuing a lower risk investment
strategy to match liability risks and reduce future
volatility.
--------------------------------------------------------------
Supply chain risks
* Annual strategic reviews, including supplier, quality,
Comment reliability and sustainability.
International supply
chain * Regular key supplier visits, good relationships
risks could increase maintained including quality control reviews and
through local lockdowns training.
due to the
Covid-19 pandemic, increased
tariffs/duties, Brexit * Logistics delays due to post Brexit driver shortages
risks in Europe and political/global have been managed and delivery times agreed/managed
volatility. with customers.
* Regular supplier quality, value for money and risk
reviews.
* Avoidance of strategic dependence on single sources
of supply.
* Contingency plans to manage Brexit and Asian sourcing
risks.
* Supplier questionnaires and export checks are
completed to ensure compliance with Group policies
including anti-bribery and anti-modern slavery.
* Training has been provided on customs duties,
particularly on managing new arrangements post
Brexit.
* Brand and product strength generally enable increases
in raw material prices to be passed on through
selling prices.
--------------------------------------------------------------
Cyber security
and Business Interruption * IT disaster recovery plans are in place for all
Comment businesses and tested regularly.
Cyber security risks
and Business Interruption * Business continuity plans are in place, or being
risks are increasing evolved where we are relocating operations, at each
globally and have increased business.
during the Covid-19 pandemic.
* Awareness training and management briefings held on
cyber security risks and actions taken as
preventative measures.
* New security protocols and software are installed and
continually reviewed to help mitigate Cyber threats.
* Regular reviews of cyber security, including external
penetration testing and reviews with external IT
professionals.
* Critical plant and equipment are identified, with
associated breakdown/recovery plans in place.
* Business interruption insurance to cover residual
risks.
* Further systems are being implemented to underpin the
business strategic growth plans and drive efficiency.
Implementation risks are mitigated via the use of
third-parties, qualified project managers and
increased user-testing.
--------------------------------------------------------------
Economic uncertainty
and Brexit risks * Strategic positioning in markets/sectors anticipated
to grow faster than the UK construction market.
Comment
Due to the ongoing pandemic, * Development of export sales opportunities, especially
there is still macroeconomic for Levolux (particularly in North America) and
uncertainty on a global Alumasc Water Management (in Asia and the Middle
basis. Markets are also East).
not completely settled
post Brexit, and this
has had an impact on * Revenues are derived from a variety of end-use
logistics, raw material construction markets.
prices and supplies.
This is challenging the
housebuilding * Development of added value systems and solutions that
/house-sales/construction are either required by legislation, building
industry. Government regulation and/or specified by architects and
spending on infrastructure engineers.
projects needs to be
maintained.
* Continuous development and introduction of innovative
green products, systems, solutions, and services that
are market leading and differentiated against the
competition.
* The Group has limited exposure to currency risk,
mainly the Euro and US Dollar. These exposures are
for the most part hedged, with hedging percentages
increased in 2019 to manage potential FX volatility
associated with Brexit.
* Brexit developments being monitored closely, strong
relationships monitored and regular dialogue with key
European suppliers. Contingency planning is in place
for key residual risk areas, including increased
inventory of materials/products imported from the EU.
--------------------------------------------------------------
Product warranty
/recall risks * Robust internal quality systems, compliance with
relevant legislation, building regulations and
Comment industry standards (e.g. ISO, BBA etc), and product
testing, as appropriate.
The Group does not have
a history of significant
warranty claims or product * Group insurance programme to cover larger potential
recall. risks.
* Back-to-back warranties obtained from suppliers where
possible.
* Specific local risk management procedures in Group
brands that also install (and supply) building
products (i.e. Levolux and Blackdown).
--------------------------------------------------------------
Credit risk
* Most credit risks are insured, including all
Comment contracting credit risk.
The Group has good recent
record in managing credit * Large export contracts are backed by letters of
risks and the contribution credit, performance bonds, guarantees or similar.
from the UK Government
Export Credit Scheme
for overseas opportunities * Due to Covid-19 and related uncertainties credit
has supported export risks have increased.
opportunities.
* Any risks taken above insured limits are subject to
strict delegated authority limits.
* Credit checks when accepting new customers/new work.
* The Group employs experienced credit controllers and
aged debt reports are reviewed in monthly Board
meetings.
--------------------------------------------------------------
consolidated STATEMENT of comprehensive income
For the year ended 30 June 2021
Year ended 30 June Year ended 30 June
2021 2020
Non-underlying Non-underlying
Underlying Total Underlying Total
Continuing operations: Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 4 90,465 - 90,465 75,992 - 75,992
Cost of sales (57,950) - (57,950) (53,413) - (53,413)
---------- -------------- -------- ---------- -------------- ---------
Gross profit 32,515 - 32,515 22,579 - 22,579
Net operating expenses
Net operating expenses
before non-underlying
items (21,511) - (21,511) (19,386) - (19,386)
Other operating income 5 - - - 968 - 968
IAS 19 past service
pension cost 5 - (150) (150) - - -
Other non-underlying
items 5 - (296) (296) - (1,045) (1,045)
Net operating expenses (21,511) (446) (21,957) (18,418) (1,045) (19,463)
Operating profit 4, 5 11,004 (446) 10,558 4,161 (1,045) 3,116
Net finance costs (489) (268) (757) (496) (261) (757)
---------- -------------- -------- ---------- -------------- ---------
Profit before taxation 10,515 (714) 9,801 3,665 (1,306) 2,359
Tax expense 7 (2,050) (165) (2,215) (744) 302 (442)
---------- -------------- -------- ---------- -------------- ---------
Profit for the year
from continuing operations 8,465 (879) 7,586 2,921 (1,004) 1,917
Discontinued operations:
Profit after taxation
for the period from
discontinued operations - - - - 339 339
Profit for the year 8,465 (879) 7,586 2,921 (665) 2,256
========== ============== ======== ========== ============== =========
Other comprehensive
income:
Items that will not
be recycled to profit
or loss:
Actuarial gain/(loss)
on defined benefit
pensions, net of tax 10,393 (6,473)
-------- ---------
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 (385) 176
Exchange differences
on retranslation of
foreign operations (46) 11
(431) 187
-------- ---------
Other comprehensive
gain/(loss) for the
year, net of tax 9,962 (6,286)
-------- ---------
Total comprehensive
profit/(loss) for
the year, net of tax 17,548 (4,030)
======== =========
Earnings per share Pence Pence
Basic earnings per
share
- Continuing operations 21.2 5.4
- Discontinued operations - 0.9
9 21.2 6.3
======== =========
Diluted earnings per
share
- Continuing operations 20.8 5.4
- Discontinued operations - 0.9
9 20.8 6.3
======== =========
Alternative Performance
Measures:
Underlying earnings
per share (pence) 23.7 8.2
======== =========
Reconciliations of underlying to statutory profit and earnings
per share are provided in notes 5 and 9 respectively.
consolidated statement of financial position
At 30 June 2021
Notes 2021 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment
- owned assets 11,734 11,089
Property, plant and equipment
- right-of-use assets 5,469 5,856
Goodwill 6 18,705 18,705
Other intangible assets 3,321 3,352
Deferred tax assets 7 1,145 3,661
-------- --------
40,374 42,663
Current assets
Inventories 10,871 8,596
Trade and other receivables 21,389 16,270
Corporation tax receivable - 325
Derivative financial assets - 207
Cash at bank 4,999 16,143
-------- --------
37,259 41,541
Total assets 77,633 84,204
======== ========
Liabilities
Non-current liabilities
Interest bearing loans and borrowings (5,936) (19,909)
Lease liability (4,811) (5,244)
Employee benefits payable (4,581) (19,269)
Provisions (1,267) (1,182)
Deferred tax liabilities 7 (966) (1,007)
-------- --------
(17,561) (46,611)
Current liabilities
Trade and other payables (21,011) (15,311)
Lease liability (795) (680)
Provisions (834) (1,194)
Corporation tax payable (1,019) -
Derivative financial liabilities (268) -
Bank overdraft - (567)
-------- --------
(23,927) (17,752)
Total liabilities (41,488) (64,363)
======== ========
Net assets 36,145 19,841
======== ========
Equity
Share capital 4,517 4,517
Share premium 10 445 445
Capital reserve - own shares 10 (406) (416)
Hedging reserve 10 (217) 168
Foreign currency reserve 10 55 101
Profit and loss account reserve 31,751 15,026
-------- --------
Total equity 36,145 19,841
======== ========
The financial statements were approved by the Board of Directors
and authorised for issue on 7 September 2021
Paul Hooper Simon Dray
Director Director
7 September 2021
Company number 1767387
consolidated STATEMENT of cash flows
For the year ended 30 June 2021
Year ended Year ended
30 June 30 June
2021 2020
Notes GBP'000 GBP'000
Operating activities
Operating profit 10,558 3,116
Adjustments for:
Depreciation 2,146 1,851
Amortisation 361 313
Impairment of assets - 300
(Gain)/loss on disposal of property, plant
and equipment (16) 4
IAS 19 past service pension cost 5 150 -
(Increase)/decrease in inventories (2,275) 1,892
(Increase)/decrease in receivables (5,119) 5,114
Increase/(decrease) in trade and other payables 5,287 (4,564)
Movement in provisions (275) (1,229)
Cash contributions to retirement benefit
schemes (2,614) (2,254)
Share based payments 397 -
----------- -----------
Cash generated by operating activities 8,600 4,543
Tax paid (161) (93)
Net cash inflow from operating activities 8,439 4,450
----------- -----------
Investing activities
Purchase of property, plant and equipment (1,666) (1,342)
Payments to acquire intangible fixed assets (330) (417)
Proceeds from sales of property, plant and
equipment 46 143
Net proceeds from sale of business activity - 339
Net cash outflow from investing activities (1,950) (1,277)
----------- -----------
Financing activities
Bank interest paid (207) (297)
Equity dividends paid (1,878) (1,574)
(Repayment)/draw down of amounts borrowed (14,000) 12,000
Principal paid on lease liabilities (692) (346)
Interest paid on lease liabilities (178) (153)
Refinancing costs (65) -
Net cash (outflow)/inflow from financing
activities (17,020) 9,630
----------- -----------
Net (decrease)/increase in cash at bank
and bank overdraft (10,531) 12,803
Net cash at bank and bank overdraft brought
forward 15,576 2,762
Net (decrease)/increase in cash at bank
and bank overdraft (10,531) 12,803
Effect of foreign exchange rate changes (46) 11
Net cash at bank and bank overdraft carried
forward 4,999 15,576
=========== ===========
consolidated STATEMENT of changes in equity
For the year ended 30 June 2021
Hedging Foreign Profit Total equity
Capital reserve reserve currency and loss
Share - reserve account
Notes Share capital premium own shares reserve
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 - - - - - 2,256 2,256
Exchange differences
on retranslation
of foreign
operations - - - - 11 - 11
Net gain on cash
flow hedges - - - 217 - - 217
Tax on derivative
financial asset - - - (41) - - (41)
Actuarial loss on
defined benefit
pensions, net of
tax - - - - - (6,473) (6,473)
Dividends 8 - - - - - (1,574) (1,574)
At 1 July 2020 4,517 445 (416) 168 101 15,026 19,841
Profit for the
period - - - - - 7,586 7,586
Exchange differences
on retranslation
of foreign
operations - - - - (46) - (46)
Net loss on cash
flow hedges - - - (475) - - (475)
Tax on derivative
financial liability - - - 90 - - 90
Actuarial gain on
defined benefit
pensions, net of
tax - - - - - 10,393 10,393
Tax on share options - - - - - 237 237
Own shares used to
satisfy exercise
of share awards - - 10 - - - 10
Share based payments - - - - - 397 397
Dividends 8 - - - - - (1,878) (1,878)
Exercise of share
based incentives - - - - - (10) (10)
At 30 June 2021 4,517 445 (406) (217) 55 31,751 36,145
------------- -------- --------------- --------- ---------- --------- -------------
1 basis of preparation
The Alumasc Group plc is incorporated and domiciled in England
and Wales. The Company's ordinary shares are traded on the
Alternative Investment Market ("AIM").
The financial information included within this announcement does
not constitute statutory accounts within the meaning of section 435
of the Companies Act 2006 (the "Act"). The financial information
for the year ended 30 June 2021 has been extracted from the
statutory accounts on which an unqualified audit opinion has been
issued.
The statutory accounts for the year ended 30 June 2021 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS"),
International Financial Reporting Standards Interpretations
Committee ("IFRS IC") interpretations and those provisions of the
Companies Act 2006 applicable to companies reporting under IFRS.
The Group financial statements have been prepared on the going
concern basis and adopting the historical cost convention. The
Group's accounting policies remain consistent with the previous
financial year.
Going concern and COVID-19
Management continued to take actions to allow the business to
trade effectively and manage the risks associated with the Covid-19
pandemic.
At 30 June 2021 the Group had cash and cash equivalents of
GBP5.0 million and had utilised GBP5.9 million of the committed
GBP20m revolving credit facility. This provided total headroom of
some GBP19.1m against committed facilities and, together with GBP4m
overdraft facilities, there is headroom of some GBP23.1m against
total facilities at 30 June 2021. Management extended the expiry
date of the committed GBP20 million revolving credit facility
during the year to April 2023, and retain the option to extend it
by a further year.
In assessing going concern to take account of the continued
uncertainties caused by Covid-19, the Group has modelled a Base
Case (BC) trading scenario on a "bottom up" basis. Given the
continuing uncertainty regarding the impact of Covid-19 (including
potential further waves of the pandemic) on the economy, customer
behaviour and ultimately on the Group's performance, the Group has
also modelled a stress test scenario which assumes a 20% reduction
in revenue, with no cost reduction or cash conservation measures,
and a Covid-19 model, which assumes a five month disruption of
trade consistent with that experienced during the first wave of the
pandemic. Under the lowest point in these stress tested scenarios,
the Group retains adequate headroom against its total banking
facilities for the next 13 months to September 2022, with no breach
of banking covenants across this period.
The Group has modelled an additional scenario (a reverse stress
test) that would lead to a breach of its banking covenants. It is
considered that the risk of such a scenario arising is remote.
Management have also identified a number of mitigating actions that
the Group would take to stay within its banking facilities and
comply with the associated covenants throughout the period.
Having taken into account all of the aforementioned comments,
actions and factors in relation to going concern and the potential
impact of Covid-19, and in light of the bank facility headroom
under various scenarios, the Directors consider that the Group has
adequate resources to continue trading for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
2 judgments and estimates
The main sources of estimation uncertainty that could have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities at 30 June 2021 within the next
financial year are the valuation of defined benefit pension
obligations, the valuation of the Group's acquired goodwill, the
recognition of revenues and profit on contracts with customers
where revenue is recognised over time.
Valuation of defined benefit pension obligations requires
estimation of future changes in inflation, mortality rates and the
selection of a suitable discount rate.
Goodwill is tested at least annually for impairment, with
appropriate assumptions and estimates built into the value in use
calculations to determine if an impairment of the carrying value is
required. See note 6 for further disclosure of the assumptions and
estimates applied.
Revenue and associated margin recognised over time on contracts
with customers is recognised using the input method under IFRS15
and therefore progressively as costs are incurred, having regard to
latest estimates of cost to complete and expected project margins.
Contract revenue includes an assessment of contract variations when
their recovery is considered highly probable. Judgment is therefore
required in the application of the Group's policy regarding revenue
and profit recognition relating to estimates of costs to complete
contracts, the final profit margin on those contracts and the
inclusion of potential contract variations prior to these being
fully agreed.
3 Summary of significant accounting policies
The accounting policies adopted are consistent with those of the
previous financial year. The following new standards, amendments
and interpretations are effective for the period beginning on or
after 1 July 2020 and have been adopted for the Group financial
statements where appropriate with no material impact on the
disclosures made by the Group:
-- Definition of a Business (Amendments to IFRS 3);
-- Interest Rate Benchmark Reform - IBOR 'phase 2' (Amendments
to IFRS 9, IAS 39 and IFRS 7); and
-- Covid-19-Related Rent Concessions (Amendments to IFRS
16).
4 segmental analysis
In accordance with IFRS 8 "Operating Segments", the segmental
analysis below follows the Group's internal management reporting
structure.
The Chief Executive reviews internal management reports on a
monthly basis, with performance being measured based on the
segmental operating result as disclosed below. Performance is
measured on this basis as management believes this information is
the most relevant when evaluating the impact of strategic decisions
because of similarities between the nature of products and
services, routes to market and supply chains in each segment.
Inter-segment transactions are entered into applying normal
commercial terms that would be available to third parties. Segment
results, assets and liabilities include those items directly
attributable to a segment. Unallocated assets comprise cash and
cash equivalents, deferred tax assets, income tax recoverable and
corporate assets that cannot be allocated on a reasonable basis to
a reportable segment. Unallocated liabilities comprise borrowings,
employee benefit obligations, deferred tax liabilities, income tax
payable and corporate liabilities that cannot be allocated on a
reasonable basis to a reportable segment.
Segmental
operating
Revenue result
GBP'000 GBP'000
Full Year to 30 June 2021
Water Management 38,370 6,115
Building Envelope 41,022 4,255
Housebuilding Products 11,073 2,552
------- ----------
Trading 90,465 12,922
Unallocated costs (1,918)
Total from continuing operations 90,465 11,004
======= ==========
GBP'000
Segmental operating result 11,004
Brand amortisation (238)
Past service cost in respect of GMP equalisation
(see note 5) (150)
Restructuring & relocation costs (see note 5) (58)
Total operating profit from continuing operations 10,558
=======
Capital expenditure
-------------------------
Segment Property, Other Deprecia-tion Amortisa-tion
Segment Liabilities Plant & Intangible
Assets Equipment Assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Water Management 29,866 (9,635) 1,455 271 1,081 137
Building Envelope 25,500 (10,208) 215 36 175 180
Housebuilding Products 14,747 (7,114) 769 23 798 44
Trading 70,113 (26,957) 2,439 330 2,054 361
Unallocated 7,520 (14,531) - - 92 -
Total 77,633 (41,488) 2,439 330 2,146 361
======= ============= =========== ============ ============== ==============
Segmental
operating
Revenue result
GBP'000 GBP'000
Full Year to 30 June 2020
Water Management 33,715 4,824
Building Envelope 33,209 (939)
Housebuilding Products 9,068 1,243
------- ----------
Trading 75,992 5,128
Unallocated costs (967)
Total from continuing operations 75,992 4,161
======= ==========
GBP'000
Segmental operating result
Brand amortisation 4,161
Restructuring & relocation costs (see note 5) (238)
(807)
Total operating profit from continuing operations 3,116
========
Capital expenditure
-------------------------
Segment Property, Other Deprecia-tion Amortisa-tion
Segment Liabilities Plant & Intangible
Assets Equipment Assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Water Management 26,645 (7,244) 1,813 264 785 100
Building Envelope 22,267 (8,346) 162 17 175 173
Housebuilding Products 13,051 (5,687) 361 29 798 39
Trading 61,963 (21,277) 2,336 310 1,758 312
Unallocated/discontinued 22,241 (43,086) 19 131 93 1
Total 84,204 (64,363) 2,355 441 1,851 313
======= ============= =========== ============ ============== ==============
Analysis by geographical segment 2020/21
United North Middle Far Rest of
Kingdom Europe America East East World Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Sales to external
customers 78,194 4,133 3,599 1,286 2,663 590 90,465
Segment non-current
assets 39,225 - - - 4 - 39,229
Analysis by geographical segment 2019/20
United North Middle Far Rest of
Kingdom Europe America East East World Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Sales to external
customers 64,816 4,147 3,184 1,485 1,587 773 75,992
Segment non-current
assets 38,996 - - - - - 39,002
Segment revenue by geographical segment represents revenue from
external customers based upon the geographical location of the
customer. The analyses of segment non-current assets are based upon
location of the assets and exclude discontinued operations.
5 UNDERLYING to Statutory profit before tax reconciliation
2020/21 2019/20
------------------ ------------------
Operating Profit Operating Profit
profit before profit before
tax tax
GBP'000 GBP'000 GBP'000 GBP'000
Underlying operating profit/profit
before tax 11,004 10,515 4,161 3,665
Brand amortisation (238) (238) (238) (238)
IAS 19 net pension scheme finance
costs - (268) - (261)
IAS 19 past service cost in respect
of GMP equalisation (150) (150) - -
Restructuring & relocation costs (58) (58) (807) (807)
Profit/profit before tax from continuing
operations 10,558 9,801 3,116 2,359
Profits/gains relating to discontinued
operations - - - 339
Statutory operating profit/profit
before tax 10,558 9,801 3,116 2,698
========= ======= ========= =======
In the presentation of underlying profits, management disclose
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 would typically be excluded in
assessing the value of the business.
In addition, management has presented the following specific
items that arose in 2020/21 and 2019/20 financial years as
non-underlying as they are non-recurring items that are judged to
be significant enough to affect the understanding of the
year-on-year evolution of the underlying trading performance of the
business:
- One-off costs of material restructuring and relocation of
separate businesses within the Group in both 2020/21 and 2019/20,
including costs associated with the departure and recruitment of a
Group Finance Director during the prior financial year;
- 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 20 November 2020; and
- The one-off deferred tax rate change adjustment charge of
GBP319k relating to the increase in main rate of UK corporation tax
from 19% to 25%.
6 GOODWILL
2021 2020
GBP'000 GBP'000
Cost:
At 1 July and 30 June 19,428 19,428
======= =======
Impairment:
At 1 July and 30 June 723 723
====== ======
Net book value at 30 June 18,705 18,705
====== ======
Goodwill acquired through acquisitions has been allocated to
cash generating units for impairment testing as set out below:
2021 2020
GBP'000 GBP'000
Alumasc Roofing 3,820 3,820
Timloc 2,264 2,264
Levolux 10,179 10,179
Rainclear 225 225
Wade 2,217 2,217
------- -------
At 30 June 18,705 18,705
======= =======
Impairment testing of acquired goodwill
The Group considers each of the operating businesses that have
goodwill allocated to them, which are those units for which a
separate cashflow is computed, to be a cash generating unit (CGU).
Each CGU is reviewed annually for indicators of impairment. In
assessing whether an asset has been impaired, the carrying amount
of the CGU is compared to its recoverable amount. The recoverable
amount is the higher of its fair value less costs to sell and its
value in use. In the absence of any information about the fair
value of a CGU, the recoverable amount is deemed to be its value in
use. Each of the CGUs are either operating segments as shown in
note 4, or sub-sets of those operating segments.
For the purpose of impairment testing, the recoverable amount of
CGUs is based on value in use calculations. The value in use is
derived from discounted management cash flow forecasts for the
businesses, based on budgets and plans covering a five year period.
The growth rate used to extrapolate the cash flows beyond this
period was 1% (2020: 1%) for each CGU.
Key assumptions included in the recoverable amount calculation
are the discount rate applied and the cash flows generated by:
(i) Revenues
(ii) Gross margins
(iii) Overhead costs
Each assumption has been considered in conjunction with the
local management of the relevant operating businesses who have used
their past experience and expectations of future market and
business developments, including Covid-19, in arriving at the
figures used.
The range of pre-tax rates used to discount the cash flows of
these cash generating units with on-balance sheet goodwill was
between 11% and 12% (2020: between 11% and 12%). These rates were
based on the Group's estimated weighted average cost of capital
(W.A.C.C.), which was risk-adjusted for each CGU taking into
account both external and internal risks. The Group's W.A.C.C. in
2021 was similar to the rate used in 2020.
The surplus headroom above the carrying value of goodwill at 30
June 2021 was significant in the case of Timloc, Rainclear, Wade
and Alumasc Roofing, with no impairment arising from either a 2%
increase in the discount rate; a growth rate of -1% used to
extrapolate the cash flows; or a reduction of 25% in the cash flow
generated in the terminal year.
The surplus headroom above the carrying value of goodwill at 30
June 2021 for Levolux was more sensitive and the following change
to each of the key assumptions would lead to an impairment:
- a 3% increase in the discount rate;
- a growth rate of -1% used to extrapolate the cash flows;
- a 35% reduction in the cash flow generated in the terminal year.
7 tax expense
(a.) Tax on profit on ordinary activities
Tax charged in the statement of comprehensive income
2020/21 2019/20
GBP'000 GBP'000
Current tax:
UK corporation tax 1,443 22
Overseas tax 46 48
Amounts under/(over) provided in previous years 23 (19)
Total current tax 1,512 51
======= =======
Deferred tax:
Origination and reversal of temporary differences 405 450
Amounts over provided in previous years (21) (157)
Rate change adjustment 319 98
------- -------
Total deferred tax 703 391
Total tax expense 2,215 442
======= =======
Tax recognised in other comprehensive income
Deferred tax:
Actuarial gains/(losses) on pension schemes 2,099 (1,838)
Cash flow hedge (90) 41
Tax charged/(credited) to other comprehensive income 2,009 (1,797)
===== =======
Total tax charge/(credit) in the statement of comprehensive
income 4,224 (1,355)
===== =======
(b.) Reconciliation of the total tax charge
The total tax rate applicable to the tax expense shown in the
statement of total comprehensive income of 22.6% is higher than
(2019/20: 16.4% was lower than) the standard rate of corporation
tax in the UK of 19% (2019/20: 19.0%).
The differences are reconciled below:
2020/21 2019/20
GBP'000 GBP'000
Profit before tax from continuing operations 9,801 2,359
Profit before tax from discontinued operations - 339
Accounting profit before tax 9,801 2,698
Current tax at the UK standard rate of 19.0% (2019/20:
19.0%) 1,862 513
Expenses not deductible for tax purposes 32 71
Use of capital losses - (64)
Rate change adjustment 319 98
Tax under/(over) provided in previous years - current
tax 23 (19)
Tax over provided in previous years - deferred
tax (21) (157)
2,215 442
======= =======
(c.) Unrecognised tax losses
The Group has agreed tax capital losses in the UK amounting to
GBP16.3 million (2020: GBP16.3 million) that relate to prior years.
Under current legislation these losses are available for offset
against future chargeable gains. The capital losses are able to be
carried forward indefinitely. Revaluation gains on land and
buildings amount to GBP1 million (2020: GBP1 million). These have
been offset in the prior year against the capital losses detailed
above. A deferred tax asset has not been recognised in respect of
the net capital losses carried forward of GBP15.3 million (2020:
GBP15.3 million) as they do not meet the criteria for
recognition.
(d.) Deferred tax
A reconciliation of the movement in deferred tax during the year
is as follows:
Pension
Accelerated Short term Total deferred
capital temporary Share deferred tax
allowances differences Brands Hedging options tax liability asset
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2019 540 (66) 482 (2) - 954 (2,202)
Charged/(credited)
to the statement
of comprehensive
income - current
year 170 (12) 11 - - 169 379
Credited to the
statement of
comprehensive
income - prior year (160) 3 - - - (157) -
Charged/(credited)
to equity - - - 41 - 41 (1,838)
At 30 June 2020 550 (75) 493 39 - 1,007 (3,661)
============ ============= ======= ======== ========= ================ ==========
Charged/(credited)
to the statement
of comprehensive
income - current
year 359 (65) 96 - (83) 307 417
Credited to the
statement of
comprehensive
income - prior year (5) (16) - - - (21) -
Charged/(credited)
to equity - - - (90) (237) (327) 2,099
At 30 June 2021 904 (156) 589 (51) (320) 966 (1,145)
============ ============= ======= ======== ========= ================ ==========
Deferred tax assets and liabilities are presented as non-current
in the consolidated statement of financial position.
Deferred tax assets have been recognised where it is probable
that they will be recovered. Deferred tax assets of GBP3.7 million
(2020: GBP2.9 million) in respect of net capital losses of GBP15.3
million (2020: GBP15.3 million) have not been recognised, see note
10 (c).
(e.) Factors affecting the tax charge in future periods
In the Budget on 3 March 2021, the Government announced its
intention to increase the main rate of UK corporation tax from 19%
to 25% with effect from 1 April 2023. Existing temporary
differences on which deferred tax has been provided may therefore
unwind in future periods at this increased rate. Since the 25% tax
rate change was substantively enacted at the 30 June 2021 balance
sheet date, deferred tax assets and liabilities have been
calculated to reflect the expected timing of reversal of the
related temporary difference with an impact of GBP319k on the
2020/21 tax charge.
8 dividends
2020/21 2019/20
GBP'000 GBP'000
Interim dividend for 2021 of 3.25p paid on 6
April 2021 1,163 -
Final dividend for 2020 of 2.0p paid on 30 October
2020 715 -
Final dividend for 2019 of 4.4p paid on 31 October
2019 - 1,574
1,878 1,574
======= =======
A final dividend of 6.25 pence per equity share, at a cash cost
of GBP2,236,000, has been proposed for the year ended 30 June 2021,
payable on 29 October 2021. In accordance with IFRS accounting
requirements this dividend has not been accrued in these
consolidated financial statements. The 2020 interim dividend, which
was due to be paid on 7 April 2020 at a cash cost of GBP1,055,000,
was cancelled as part of the Group's Covid-19 cash conservation
programme.
9 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:
2020/21 2019/20
GBP'000 GBP'000
Net profit attributable to equity holders of
the parent - continuing operations 7,586 1,917
Net profit attributable to equity holders of
the parent - discontinued operations - 339
7,586 2,256
======= =======
000s 000s
Weighted average number of shares 35,766 35,764
Dilutive potential ordinary shares - employee
share options 637 55
36,403 35,819
======= =======
Basic earnings per share: Pence Pence
Continuing operations 21.2 5.4
Discontinued operations - 0.9
21.2 6.3
===== =====
Diluted earnings per share: 2020/21 2019/20
Pence Pence
Continuing operations 20.8 5.4
Discontinued operations - 0.9
20.8 6.3
======= =======
Calculation of underlying earnings per share:
2020/21 2019/20
GBP'000 GBP'000
Reported profit before taxation from continuing
operations 9,801 2,359
Brand amortisation 238 238
IAS 19 net pension scheme finance costs 268 261
Pension GMP equalisation 150 -
Restructuring & relocation costs 58 807
Underlying profit before taxation from continuing
operations 10,515 3,665
Tax at underlying Group tax rate of 19.5% (2019/20:
20.3%) (2,050) (744)
------- -------
Underlying earnings from continuing operations 8,465 2,921
------- -------
Weighted average number of shares 35,766 35,764
Underlying earnings per share from continuing
operations 23.7p 8.2p
======= =======
10 movements in equity
Share capital and share premium
The balances classified as share capital and share premium are
the proceeds of the nominal value and premium value respectively on
issue of the Company's equity share capital net of issue costs.
Capital reserve - own shares
The capital reserve - own shares relates to 360,017 (2020:
369,245) ordinary own shares held by the Company. The market value
of shares at 30 June 2021 was GBP954,045 (2020: GBP265,856). These
are held to help satisfy the exercise of awards under the Company's
Long Term Incentive Plans. During the year 9,228 shares with an
original cost of GBP10,000 were used to satisfy the exercise of
awards. No shares were exercised in the prior financial period. A
Trust holds the shares in its name and shares are awarded to
employees on request by the Group. The Group bears the expenses of
the Trust.
Hedging reserve
This reserve records the post-tax portion of the gain or loss on
a hedging instrument in a cash flow hedge that is determined to be
an effective hedge.
Foreign currency reserve
This foreign currency reserve is used to record exchange
differences arising from the translation of the financial
statements of foreign subsidiaries.
11 related party disclosure
The Group's principal actively trading subsidiaries at 30 June
2021 are listed below:
Country of % of equity interest
Principal subsidiaries Principal activity incorporation and votes held
2020 2019
Alumasc Building Products
Limited Building products England 100 100
Levolux Limited Building products England 100 100
Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made at
arms-length market prices. Outstanding balances at the year end are
unsecured and settlement occurs in cash. There have been no
guarantees provided or received for any related party
receivables.
Transactions with other related parties
Key management personnel are determined as the Directors of The
Alumasc Group plc.
Financial Summary 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- -----------
Income Statement Summary
Continuing operations:
Revenue 69,950 73,005 88,368 87,048 90,104 75,992 90,465
Underlying operating
profit 6,341 7,010 8,703 6,224 5,865 4,161 11,004
Underlying operating
margin 9.1% 9.6% 9.8% 7.2% 6.5% 5.5% 12.2%
Net interest cost on
borrowings (592) (215) (132) (212) (281) (343) (311)
Interest on lease
liabilities - - - - - (153) (178)
Underlying profit before
tax 5,749 6,795 8,571 6,012 5,584 3,665 10,515
Non-underlying items* (1,434) (1,502) (888) (1,082) (4,599) (1,306) (714)
Profit before taxation 4,315 5,293 7,683 4,930 985 2,359 9,801
Taxation (1,120) (1,319) (1,492) (967) (256) (442) (2,215)
Profit for the year from
continuing
operations 3,195 3,974 6,191 3,963 729 1,917 7,586
Discontinued operations -
(Loss)/profit
after tax 1,181 2,510 349 354 2,912 339 -
---------------------------- ------------ ---------- ---------- ----------- ----------- -----------
Profit for the year 4,376 6,484 6,540 4,317 3,641 2,256 7,586
---------------------------- ------------ ---------- ---------- ----------- ----------- ----------- -----------
Underlying earnings per
share from
continuing operations
(pence) 12.6 15.1 19.1 13.4 12.4 8.2 23.7
Basic earnings per share
(pence) 12.3 18.2 18.3 12.0 10.1 6.3 21.2
Dividends per share (pence) 6.0 6.5 7.15 7.35 7.35 2.0 9.5
Balance Sheet Summary at 30
June
Shareholders' funds 15,929 16,580 20,437 24,421 25,445 19,841 36,145
Net debt/(cash) (914) (8,632) (6,076) 4,812 5,095 4,333 937
Lease liabilities - - - - - 5,924 5,606
Pension deficit (net of
tax) 16,748 18,588 17,095 12,566 10,749 15,608 3,436
Discontinued operations (3,708) (479) (334) (714) 359 - -
Capital Invested -
continuing operations 28,055 26,057 31,122 41,085 41,648 45,706 46,124
---------------------------- ------------ ---------- ---------- ----------- ----------- ----------- -----------
Underlying return on
capital invested
(post-tax)** 17.9% 20.5% 24.2% 13.8% 10.2% 7.2% 19.8%
Underlying tax rate 22.0% 20.8% 20.6% 20.2% 20.4% 20.3% 19.5%
Notes
* Non-underlying items comprise brand amortisation and IAS 19 pension
costs in all years. Further details of the 2019/20 and 2020/21 non underlying
items can be found in note 5 of the Report and Accounts 2021.
** Underlying operating profit after tax from continuing operations
calculated using the underlying tax rate, as a percentage of average
capital invested from continuing operations.
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END
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