TIDMHAYT
RNS Number : 1554P
Hayward Tyler Group PLC
15 November 2016
15 November 2016
Hayward Tyler Group plc
Unaudited interim results
for the six months ended 30 September 2016
Well positioned for growth-momentum building
Hayward Tyler Group plc (AIM: HAYT) ("Hayward Tyler Group",
"HTG", the "Group" or the "Company"), the specialist engineering
group, today announces its interim results for the six months ended
30 September 2016.
Financial Headlines:
-- Revenue was GBP23.1 million in 1H2017 (1H2016: GBP21.8 million);
-- Due to the previously announced 2H2017 weighting during the
current financial year, trading* operating loss was GBP5.6 million
(1H2016: profit of GBP2.0 million);
-- Diluted trading* loss per share of 9.13 pence (1H2016: earnings per share of 3.87 pence);
-- Cash used by operations of GBP5.0 million (1H2016: cash generated of GBP2.0 million);
-- Net debt of GBP18.3 million (at 30 September 2015: GBP10.5
million, at 31 March 2016: GBP8.6 million) following extensive
investment in upgrading the Group's facilities and the operating
loss in 1H2017; and
-- 5% increase in interim dividend to 0.58 pence per share (1H2016: 0.552 pence).
* trading represents the underlying performance of Hayward Tyler
Group
Business Headlines:
-- Order intake of GBP25.4 million (1H2016: GBP26.6 million);
-- Order intake highlights included a further order from FMC
Technologies Inc for three subsea motors and floating vessel
spares, gear boxes and long-term service agreements totalling over
GBP2.3 million for Peter Brotherhood;
-- GBP15.0 million investment in the development of the Centre
of Excellence in Luton completed and fully operational following
the official opening by the Duke and Duchess of Cambridge on 24
August 2016; and
-- Hayward Tyler awarded the Queen's Award for Enterprise: International Trade.
Post-Period Highlights:
-- Momentum thoughout the business has improved noticeably with
a considerable number of new orders received;
-- Further order intake in the period from 1 October 2016 to 13
November 2016 of GBP10.9 million including the first steam turbine
gen-set order of around GBP2.0 million as the new Peter Brotherhood
together with a replacement rotor of over GBP1.0 million for an
existing customer in the Middle East;
-- Winner of two categories at The Manufacturer MX Awards on 2
November 2016, namely Smart Factory and Leadership & Strategy,
and short-listed in three other categories;
-- GBP3.0 million increase of committed banking facilities and
relaxation of financial covenants to support the on-going
requirements of the Group; and
-- Intention to increase the Company's loan note programme to
match the investment in long-term assets with longer term
funding.
Ewan Lloyd-Baker, Chief Executive Officer, commented:
"As previously announced we anticipated that the current
financial year would be very much second half weighted and this has
indeed proved to be the case. Importantly, since the end of the
first half, momentum in new order wins has improved considerably
with aggregate orders of GBP10.9 million secured since the end of
the period. Hayward Tyler Group is well positioned for further
growth following the substantial investment we have made in the
Group's facilities.
In addition, we are further encouraged by the continuing strong
support provided to the Group by our principal bank, Royal Bank of
Scotland, with whom we have committed borrowing facilities out to
2020.
Reflecting the Board's confidence in the long term prospects of
the Group, the interim dividend has been raised by 5%.
Furthermore, it was a great pleasure to host the Duke and
Duchess of Cambridge to officially open the Centre of Excellence
and also to present us with the Queen's Award for Enterprise:
International Trade, an award that demonstrates the significant
progress the Hayward Tyler Group has made, and will continue to
make, with the help of everyone at the Company."
The information communicated in this announcement is inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No.596/2014.
Enquiries:
Hayward Tyler Group plc
Ewan Lloyd-Baker, Chief Executive Tel: +44 (0)1582 731144
Officer
Nicholas Flanagan, Chief Financial
Officer
------------------------------------ ---------------------------
FinnCap Limited - NOMAD & Broker
Matt Goode - Corporate Finance Tel: +44 (0)20 7220 0500
Emily Watts - Corporate Finance
Tony Quirke - Corporate Broking
------------------------------------ ---------------------------
Buchanan Tel: +44 (0)20 7466 5000
Charles Ryland
Chris Judd
Jane Glover
------------------------------------ ---------------------------
Chief Executive's Review
Overview
When Hayward Tyler Group published its results for FY2016 we set
out our priorities for the current financial year, which were as
follows:
-- Continue to focus on implementing our strategy for growth
through product and market development;
-- Continue to increase order intake through improvements to the
'win-order' process across all markets;
-- Re-establish Peter Brotherhood and embed the business in the Group; and
-- Continue to look for wider opportunities to develop and grow the Group.
As explained below, our focus has very much been on the first
three of these priorities, which puts us in a stronger position to
take the Group forward.
That being said, at the time of the results for FY2016, we
indicated that the performance in FY2017 would be strongly weighted
to the second half of the year, presenting us with a challenge for
2H2017. However, we remain confident in meeting market expectations
of revenues of around GBP80 million for the full year based on our
strong pipeline, recent improved levels of order intake, increased
order book and reduced lead times from operational improvements
that shorten the revenue cycle.
Performance Review
Revenue in 1H2017 was 6% ahead of prior year at GBP23.1 million
(1H2016: GBP21.8 million) as a result of the inclusion of Peter
Brotherhood and driven by an opening order book(1) and order
intake(2) in 1Q2017. Order intake in the first half was GBP25.4
million (1H2016: GBP26.6 million) resulting in an order book of
GBP48.0 million as at 30 September 2016 (at 31 March 2016: GBP36.1
million). As a result of the lower revenue in 1H2017, the Group did
not have the revenues to cover its factory overheads generating an
underlying operating loss of GBP5.6 million, however, management is
confident in the Group's ability to meet full year market
expectations.
Further details of the financial performance in 1H2017 are set
out in the Financial Review.
1 Order book represents contracts that had yet to be shipped to
customers as at a reporting date
2 Order intake represents contracts for which purchase orders
were received from customers in a reporting period
Centre of Excellence
On 24 August 2016 we were delighted to announce the official
opening by the Duke and Duchess of Cambridge of our Centre of
Excellence in Luton, the culmination of GBP15.0 million of
investment in property, plant and equipment. The opening gave us an
opportunity to showcase the new facility to our Royal guests, our
customers and other stakeholders and see the outcome of all the
hard work we have delivered over the past few years. In addition,
the Duke and Duchess also made the presentation of the Queen's
Award for Enterprise: International Trade.
The Centre of Excellence adds world-class capabilities to create
the world's most advanced facility for specialist motor
manufacture, which is also "Fit for Nuclear". It provides single
process flow lines that increase the pace of production and thereby
reduce lead times, which provide us with the opportunity to double
capacity from the Luton facility whilst reducing working capital
levels by reducing order fulfilment periods. The Centre of
Excellence now features particulate control systems and specialist
test capabilities, key value-adds for all our customers but
particularly critical for the nuclear and subsea oil and gas
sectors. Furthermore, the new facility has enabled us to reduce our
environmental footprint.
The GBP15.0 million investment, the largest in Hayward Tyler's
history, supports the long-term growth plans across our
international markets. The refurbishment included:
-- Adding a further 40% to create an overall facility with
c.11,000 square metres including designated test pits for power,
oil and gas, and nuclear;
-- Re-furbishing the existing facility;
-- Improving and upgrading the electrical supply;
-- Revising the production layout;
-- Installing specialist test and particulate controls systems; and
-- Spending GBP5.0 million on new process capable plant and machinery.
The total cost of GBP15.0 million was funded from a 3-year loan
note (GBP3.0 million), equipment finance leases (GBP3.1 million),
equity (GBP3.1 million), Regional Growth Fund grant (GBP2.3
million) and short-term borrowings (GBP3.5 million).
The Centre of Excellence became fully operational in August 2016
and its contribution is critical to delivering orders that are
scheduled to ship in 2H2017.
Peter Brotherhood
On 30 October 2015 we completed the acquisition of the trade and
assets of the Peterborough operations of Dresser-Rand. This
acquisition provided us with a great opportunity to resurrect the
Peter Brotherhood brand and re-invigorate the Peter Brotherhood
business that has existed for almost 150 years. In more recent
times it has focused on energy efficient solutions for land and
marine based applications including steam turbines, reciprocating
gas compressors and combined heat and power units for the power
generation, oil and gas, marine and process markets. Whereas
Hayward Tyler operates in the +300MW part of the power market,
Peter Brotherhood provides us with process capability in the range
1MW to 40MW, ideal for de-centralised power supply, a key feature
for growth in energy supply.
The acquisition provided us with a process capable, motivated
work force and a 14,700 square metres modern facility, demonstrated
by the design, build, test and completion of the GBP3.6 million
S-Oil steam turbine gen-set. Additionally, the business had a small
order book and a significant installed base of equipment. Our
challenge has been to re-establish the sales and marketing function
of the business completely, which included inter alia:
-- Restoring the Peter Brotherhood name that had remained unused
for eight years but is still widely recognised in the industry;
-- Creating a whole sales and marketing team, which included
transferring some members of the engineering team into sales,
together with recruiting Non-TUPE Dresser-Rand staff and external
hires including some former employees of the old Peter
Brotherhood;
-- Re-establishing key customer and agency relationships across the world;
-- Developing promotional materials and attending key industry
events to re-promote the Peter Brotherhood name and its
capabilities;
-- Implementing a 5D customer services model to serve the
aftermarket through customer care agreements that cover technical
support, parts supply and management, repair services, upgrades and
revamps, and customer training; and
-- Implementing marketing, sales and operational planning
together with the Lanner Witness simulation modelling that has been
so successful in Hayward Tyler.
This challenge has been significant, which is reflected in the
low order intake achieved in 1H2017 of GBP6.0 million. However, we
are encouraged by the significant pipeline of potential orders and
recent contract wins since the period end that suggest that the
win-order process is gathering momentum post the period end.
Notable achievements in the period since 31 March 2016 include:
-- Growing the pipeline to over GBP200 million;
-- Re-establishing a key customer relationship with a global
supplier to the marine and energy markets and securing a GBP1.9
million order for a steam turbine gen-set as well as multiple
future opportunities and potential global framework agreement;
-- Doubling aftermarket order intake to a current average of
over GBP0.8 million per month; and
-- Winning GBP1.5 million of gearbox orders (for use in radar towers) from Siemens.
Key Growth Drivers
There are two aspects to the key growth drivers for the Group -
the market or external growth drivers and the investment or
internally generated growth drivers.
Market Drivers
The underlying market fundamentals remain positive for the
Group. We summarise the key market drivers as follows:
-- Growth in demand for energy driven by the world's population
being projected to exceed 9.5 billion people by 2050;
-- Energy policy is pushing change within energy markets. For
example, the drive for lower emissions, increased efficiency and
cost savings is leading to the replacement of older plant and
facilities. In addition, the promotion of decentralised power
supply and sourcing of energy from multiple sources (e.g. fossil
fired, oil and gas, nuclear and renewables) to spread risk provides
opportunities to our diversified businesses;
-- Optimising the use of energy resources such as dwindling oil
reserves means that capital equipment has to be able to operate in
ever more extreme conditions. Our robust products, like the subsea
motor, provide customers with the opportunity to maximise the
returns from their multi-million pound investments; and
-- Aftermarket services, whether it's benefiting from our
significant installed base or extending the life of facilities,
provide significant growth opportunities to our businesses.
Investment Drivers
We summarise the key investment drivers as follows:
-- As mentioned above, the Centre of Excellence provides us with
a unique process capable facility that increases the pace of
production, reduces lead times and has the potential to double
capacity. The Centre of Excellence became fully operational at the
end of August 2016;
-- Research and development is a key tenet of our strategy for
growth, which includes transforming existing technologies, for
example by finding new applications for existing products in new
markets, and innovating new technologies for existing markets.
Ultimately we expect to further diversify our product offering by
developing new products for new markets;
-- We have made, and continue to make, a significant investment
in our people. This is demonstrated by the very significant amount
of training and development we have deployed in the last two years,
the continuing graduate and apprentice schemes employed in Hayward
Tyler Luton and now Peter Brotherhood too, and our focus on the
front-end of the business;
-- As previously discussed, the acquisition of Peter Brotherhood
provides us with the opportunity to re-establish this company
including building-up its aftermarket business based on its
significant installed base;
-- We have increased our investment in marketing from GBP0.1
million in 1H2016 to GBP0.3 million in 1H2017. This marketing
covers a wide range of initiatives, which include adopting account
based marketing plans across the Group. For example, actively
investing and resourcing marketing and sales programmes geared to
key growth accounts and opportunities and launching specific
programmes targeted around specific customer opportunities
including tactical programmes to support the sales process to
increase the conversion rate or to convert faster or to open new
doors. This approach is in addition to, and complementary to, the
existing sales programmes and is geared to support our focus on the
win-order process; and
-- The first half of the year benefitted from revenue and order
intake generated from our strategic alliances with FMC Technologies
and Ebara Corporation. These alliances, together with other
potential alliances that we are seeking to develop, offer
significant scope for growth.
Outlook
The outlook for the 2H2017 and beyond is positive based on the
key growth drivers for the Group, discussed above, the pipeline of
new opportunities and recent levels of order intake, which as
previously explained, will be very much weighted to the second half
of the current financial year.
Our businesses have a pipeline of opportunities that exceed
GBP500 million. Over the last nine months we have established a
universal and consistent approach to determining the pipeline of
opportunities across all our businesses, which includes
identifying, recording and analysing each potential contract. This
enhanced understanding helps us to target and prioritise our
resources to maximise the chance of converting the pipeline into
orders. The rate of this conversion, particularly of aftermarket
orders with their shorter lead times and higher profit margins, is
key to the recovery of the Group's results in 2H2017.
The rate of order intake has improved during the course of the
year to date and continues to improve further. Order intake in
1Q2017 was GBP8.2 million (1Q2016: GBP13.4 million). This rose to
GBP17.3 million in 2Q2017 (2Q2016: GBP13.2 million) and in the
period from 1 October 2016 to 13 November we received further
orders of GBP10.9 million. This increased rate reflects the greater
focus placed by the Company on the whole win-order process across
the Group. Furthermore the sales teams are now fully integrated
into the sales and operational planning process, which provides
better understanding of load gaps for the operations and management
of opportunities. For example, this enables a member of the sales
team to identify a capacity gap and to offer a customer a strategic
price that fills that gap, maximising the utilisation of our
facilities. Of the GBP48.0 million order book at 30 September 2016,
GBP21.3 million is expected to be recognised as revenue in 2H2017.
That leaves the Group with a requirement to "book and fill"(1)
orders of GBP35.8 million in 2H2017, which is expected to be drawn
from opportunities currently under negotiation plus regular
aftermarket orders of over GBP60 million.
1 Book and fill represents order intake to secure and recognise
as revenue in 2H2017 to meet market expectation of around GBP80
million revenue in FY2017
Separately I'd like to thank all of our employees for their
continuing dedication, focus, determination and patience as we
develop and grow the overall Group and continue to seek out the
opportunities to work better together as Hayward Tyler and Peter
Brotherhood. With the greater uncertainty created as a result of
the Brexit vote and unexpected result of the US election, it is
reassuring to know that in HTG we have a group with over 350 years
of combined engineering heritage and pedigree, a reassuring track
record in uncertain times.
E Lloyd-Baker
Chief Executive Officer
15 November 2016
Financial Review
Basis of Reporting
The Group financial statements in this report have been prepared
in accordance with International Financial Reporting Standards.
Operating Results
Revenue in 1H2017 was 6% ahead of prior year at GBP23.1 million
(1H2016: GBP21.8 million) helped by the inclusion of Peter
Brotherhood revenue of GBP6.7 million (1H2016: GBPnil). On a
like-for-like basis Hayward Tyler revenue was GBP16.4 million
(1H2016: GBP21.8 million). The mix of revenue from Original
Equipment (OE) and Aftermarket (AM) remained constant year-on-year
at 34%:66%. Gross profit margin was lower at 14% (1H2016: 34%),
which was entirely due to revenue being too low to cover factory
overheads including labour, rent and utilities of GBP5.5 million.
Excluding these overheads the underlying gross profit margin was
38% as set out in the analysis below:
GBPm Underlying Unrecovered Reported
fixed costs
---------------- ----------- ------------- ---------
Revenue 23.1 - 23.1
Cost of sales (14.3) (5.5) (19.9)
---------------- ----------- ------------- ---------
Gross Profit 8.8 (5.5) 3.3
---------------- ----------- ------------- ---------
Gross Profit % 38% - 14%
This underlying gross profit, analysed between OE and AM and set
out in the table below, shows a gross loss in Peter Brotherhood
resulting from cost overruns, and a strong performance in all other
segments reflecting normal aftermarket profit margins and the
continuing upward trend on Hayward Tyler's OE business.
Peter Brotherhood Hayward Tyler Group Group
GBPm Original Original 1H2017 1H2016
Equipment Aftermarket Equipment Aftermarket Total Total
------------------ ----------- ------------ ----------- ------------ ------- -------
Revenue 2.3 4.4 5.5 10.9 23.1 21.8
Cost of sales (2.6) (2.1) (4.0) (5.6) (14.3) (14.4)
------------------ ----------- ------------ ----------- ------------ ------- -------
Underlying Gross
Profit (0.3) 2.3 1.5 5.3 8.8 7.5
------------------ ----------- ------------ ----------- ------------ ------- -------
Underlying Gross
Profit % (13)% 51% 28% 49% 38% 34%
Overall the revenue and margin delivered a trading(1) operating
loss for the period of GBP5.6 million (1H2016: profit of GBP2.0
million) after year-on-year increased net operating charges
relating to Peter Brotherhood business (GBP2.1 million) together
with increased sales and marketing (GBP0.8 million). The trading
loss before tax was GBP6.6 million (1H2016: profit of GBP1.8
million). There were non-trading operating charges in the period of
GBP0.1 million (1H2016: GBP0.3 million), which relate to costs
incurred on the acquisition of Peter Brotherhood.
The Group is exposed to the US Dollar through its operating
business in the USA and from UK exports to China. On a constant
exchange rate(2) basis revenue and trading profit before tax in
1H2016 would have been higher by GBP1.4 million and GBP0.5 million
respectively.
1 trading represents the underlying performance of HTG
2 constant exchange rate is calculated by rebasing prior year
figures at current year average rate of GBP1:USD1.3758
Finance Charges
Finance costs in the period, which mainly represent interest
payable, were GBP0.4 million (1H2016: GBP0.3 million). In addition,
there was a loss on the fair value of derivatives of GBP0.6 million
(1H2016: gain of GBP0.1 million) that arose on the revaluation of
foreign exchange hedge contracts to 30 September 2016 exchange.
These hedges were established prior to the Brexit vote and the
subsequent fall in the value of Sterling.
Tax
The tax credit for the period was GBP1.5 million (1H2016: charge
of GBP0.1 million). The trading tax credit relates to an effective
tax credit rate of 23%, which reflects that more than 80% of the
losses in 1H2017 occurred in the UK. In addition, there was a
non-trading tax charge of GBP0.1 million (1H2016: GBP10,000) that
mainly represents a reduction in the deferred tax asset following
the change in UK corporation tax rate from 20% to 18%.
Loss After Tax
The trading loss after tax for the period was GBP5.1 million
(1H2016: profit GBP1.8 million), which delivered a trading basic
loss per share (LPS) of 9.25 pence (1H2016: earnings per share
(EPS) of 3.91 pence) and a trading diluted LPS of 9.13 pence
(1H2016: diluted EPS of 3.87 pence). Basic LPS was 9.65 pence
(1H2016: EPS of 3.33 pence) and diluted LPS was 9.53 pence (1H2016:
diluted EPS of 3.30 pence).
Dividend
The Group paid its final dividend of 0.83 pence per share in
respect of the year to 31 March 2016 in August 2016. An interim
dividend in respect of the current year of 0.58 pence per share
will be paid on 23 February 2017 to all shareholders on the
register on 13 January 2017, the ex-dividend date being 12 January
2017.
Capital Expenditure
Purchase of fixed assets was GBP4.1 million in the period
(1H2016: GBP5.0 million). GBP2.4 million of these purchases relate
to investment in the Centre of Excellence including expenditure on
the building works, fitting-out the building and new plant and
machinery. GBP1.4 million relates to expenditure in HT Colchester
on new plant and equipment together with a revised layout of the
shop floor to increase capacity.
Working Capital
Management of working capital continues to be a key focus of the
Group. This focus enabled the Group to generate GBP0.4 million from
working capital (1H2016: GBP0.1 million). Following a temporary
increase in revolving credit facilities, undrawn borrowing
facilities at 30 September 2016 were GBP4.2 million (at 31 March
2016: GBP5.1 million).
Borrowings, Banking & Finance
Net debt at 30 September 2016 was GBP18.3 million (at 31 March
2016: GBP8.6 million) driven by the trading operating loss in the
period of GBP5.6 million (1H2016: profit GBP2.0 million) and
continued investment in fixed assets of GBP4.1 million (1H2016:
GBP5.0 million) of which GBP2.0 million has been funded by finance
leases. Net debt comprised term borrowings of GBP5.8 million (at 31
March 2016: GBP5.9 million), finance leases of GBP3.3 million (at
31 March 2016: GBP1.6 million) and drawings under revolving credit
facilities of GBP10.0 million (at 31 March 2016: GBP6.2 million)
offset by cash of GBP0.8 million (at 31 March 2016: GBP5.1
million).
As announced on 14 November 2016, the Company reached agreement
with its principal bank, Royal Bank of Scotland, to amend and
restate the Company's multicurrency committed borrowing facilities
agreement (the "Agreement"). The main changes to the Agreement are
a short-term increase in the revolving credit facility ("RCF") of
GBP3.0 million, which matures on 31 January 2017, to GBP11.9
million and a relaxation of quarterly financial covenants, which
will now be measured from 31 March 2017 onwards, to give the Group
the financial flexibility to deliver the expected improvement in
trading of the business in 2H2017. The new repayment schedule under
both facilities is detailed below, and the maturity dates of the
committed facilities remain unchanged as follows:
-- GBP2.9 million term facility(1) matures on 30 September 2020; and
-- GBP11.9 million revolving credit facility(2) on 30 November 2018.
1 repayments of GBP216,000 on 30 June and 31 December of each
year with a final repayment of GBP1,176,000 on 30 September
2020
2 limit reduces by GBP600,000 on 31 December 2016, GBP3,000,000
on 31 January 2017, GBP300,000 on 31 March 2017 and a final
maturity on 30 November 2018
The Group established a secured loan note programme of GBP3.0
million in 2015 ("Loan Note Programme") to provide a diversified
source of funding. The Company is seeking to increase the Loan Note
Programme, initially by GBP3.0 million, in order to maintain a more
appropriate maturity profile on the Company's borrowings and to
repay GBP3.0 million of short-term borrowings under the RCF by 31
January 2017. The RCF was used to purchase fixed assets for the
Centre of Excellence and, accordingly, the new issue under the Loan
Note Programme will enable the Group to match long-term assets with
medium to long-term debt. The Group intends to increase the overall
Loan Note Programme from GBP3.0 million to GBP10.0 million, leaving
GBP4.0 million already authorised, but not issued, available for
further growth opportunities.
Pensions
Within the UK, the Group operates a defined benefit plan, with
benefits linked to final salary, and a defined contribution plan.
With effect from 1 June 2003 the defined benefit plan was closed to
future service accruals and new UK employees offered membership of
the defined contribution plan. The majority of UK employees are
members of one of these arrangements.
A full actuarial valuation of the defined benefit plan is
produced every three years (the last one being as at 1 January
2014), however, a valuation is prepared at each period end for the
purposes of the report and accounts by independent qualified
actuaries. The net surplus at 31 March 2016 was GBP0.2 million and
this has been maintained at 30 September 2016.
Further comment on pensions is given in note 10 to these
financial statements.
Key Performance Indicators
As discussed in the Company's report and accounts for the year
to 31 March 2016, we use various internal and external measures to
assess our performance against our strategy to strengthen the
business, increase profitability and generate a positive
shareholder return. The key performance indicators (KPIs) set out
below help to determine how successful we have been in achieving
our strategic objectives:
KPI Target Progress in period
---------------- ---------------------- ----------------------------------
Strategic Objective - to ensure the strength of our business
----------------------------------------------------------------------------
Order Intake Achieve orders Ahead of target at 1.2x.
of >1.1x historical On a like-for-like basis
revenue the KPI was below target
at 0.9x
---------------- ---------------------- ----------------------------------
Cash conversion Convert >85% of Ahead of target at 87% reflecting
EBITDA to cash the improvement in working
capital, however, operating
loss led to increased net
debt
---------------- ---------------------- ----------------------------------
Net debt to Achieve a ratio Adverse to target at (554.9):1
EBITDA of 2:1 or lower as a result of the operating
loss in 1H2017
---------------- ---------------------- ----------------------------------
Strategic Objective - to increase profitability
----------------------------------------------------------------------------
Gross Profit Generate a gross Adverse to target at 14%
% profit margin of reflecting the high level
>35% of unrecovered factory overheads
as a result of low revenue.
Excluding these overheads
the underlying gross profit
% was 38%
---------------- ---------------------- ----------------------------------
Trading EBIT Generate EBIT which Adverse to target at loss
% is 10-15% of revenue of (24)% driven by lower
for the period gross profit % and increased
operating charges from addition
of Peter Brotherhood and
increased sales and marketing
costs
---------------- ---------------------- ----------------------------------
Strategic Objective - to generate positive shareholder
return
----------------------------------------------------------------------------
Trading EPS Generate year on Adverse to target as a result
Growth year growth of of the diluted loss per share
>10% of (9.13) pence
---------------- ---------------------- ----------------------------------
Statement of Financial Position
Total equity decreased by GBP5.2 million from 31 March 2016 to
GBP20.6 million as a result of the net loss in 1H2017 (GBP5.3
million) and the final dividend in respect of the prior year
(GBP0.4 million) offset by the gain on the translation of overseas
subsidiaries (GBP0.5 million).
N Flanagan
Chief Financial Officer
15 November 2016
H ayward Tyler Group plc
Consolidated interim financial statements for the period ended
30 September 2016
Consolidated interim income statement
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 2016 30 September 2015 31 March 2016
---------------------------------- ---------------------------------- ----------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Notes Trading Non-Trading Total Trading Non-Trading Total Trading Non-Trading Total
--------- ------------ --------- --------- ------------ --------- --------- ------------ ---------
Revenue 23,127 - 23,127 21,835 - 21,835 61,648 - 61,648
Cost of sales (19,855) - (19,855) (14,352) - (14,352) (41,223) - (41,223)
Gross profit 3,272 - 3,272 7,483 - 7,483 20,425 - 20,425
Gross profit
margin 14% 34% 33%
Operating
charges (8,914) (117) (9,031) (5,477) (270) (5,747) (14,659) (1,777) (16,436)
Operating
(loss)/profit (5,642) (117) (5,759) 2,006 (270) 1,736 5,766 (1,777) 3,989
Finance costs 6 (386) - (386) (297) - (297) (579) (382) (961)
Gain/(loss) on
fair value of
derivatives (557) - (557) 136 - 136 (40) - (40)
(Loss)/profit
before tax (6,585) (117) (6,702) 1,845 (270) 1,575 5,147 (2,159) 2,988
Taxation 9 1,533 (102) 1,431 (77) 10 (67) (597) (41) (638)
(Loss)/profit
for the
period (5,052) (219) (5,271) 1,768 (260) 1,508 4,550 (2,200) 2,350
========= ============ ========= ========= ============ ========= ========= ============ =========
Basic earnings
per share
(pence) 7 (9.25) (0.40) (9.65) 3.91 (0.58) 3.33 9.47 (4.58) 4.89
Diluted
earnings per
share (pence) 7 (9.13) (0.40) (9.53) 3.87 (0.57) 3.30 9.47 (4.58) 4.89
H ayward Tyler Group plc
Consolidated interim financial statements for the period ended
30 September 2016
Consolidated interim statement of financial position
Unaudited Unaudited Audited
At 30 September 2016 At 30 September 2015 At 31 March 2016
Notes GBP000 GBP000 GBP000
Non-current assets
Goodwill 2,573 2,219 2,573
Other intangible assets 1,416 981 1,586
Property, plant and equipment 28,472 15,284 25,302
Deferred tax assets 3,758 2,472 2,726
Other debtors - 521 180
Pension and other employee obligations 167 - 167
36,386 22,017 32,534
Current assets
Inventories 8,532 5,759 6,626
Trade and other receivables 16,287 15,072 20,414
Other current assets 2,156 1,305 2,308
Current tax assets 780 716 207
Cash and cash equivalents 794 3,197 5,135
---- ---
28,549 26,049 34,690
Total assets 64,935 48,066 67,224
---- ----------------- --- ------------------ -----------------
Current liabilities
Trade and other payables 13,637 10,925 15,178
Borrowings 11,145 6,927 7,418
Provisions 3,265 838 3,542
Current tax liabilities 316 712 755
Other liabilities 2,789 2,368 3,426
Financial liabilities - derivatives 12 849 117 292
Current liabilities 32,001 21,887 30,611
---- ----------------- --- ------------------ -----------------
Net current (liabilities)/assets (3,452) 4,162 4,079
---- ---
Total assets less current liabilities 32,934 26,179 36,613
---- ----------------- --- ------------------ -----------------
Non-current liabilities
Borrowings 7,961 6,752 6,356
Pension and other employee obligations 10 - 179 -
Other creditors 4,385 2,642 4,449
---- --- ------------------ -----------------
12,346 9,573 10,805
---- ----------------- --- ------------------ -----------------
Net assets 20,588 16,606 25,808
==== ================= === ================== =================
Equity
Called-up share capital 11 554 458 554
Share premium account 36,677 28,705 36,677
Merger reserve 14,502 14,502 14,502
Reverse acquisition reserve (19,973) (19,973) (19,973)
Share based payment reserve 93 - 93
Other equity 18 52 18
Foreign currency translation reserve 886 (54) 375
Retained earnings (12,169) (7,084) (6,438)
Total equity 20,588 16,606 25,808
==== ================= === ================== =================
Hayward Tyler Group plc
Consolidated interim financial statements for the period ended
30 September 2016
Consolidated interim statement of comprehensive income
Unaudited Unaudited Audited
Six months to Year to
Six months to 30 September 31 March
30 September 2016 2015 2016
GBP000 GBP000
(Loss)/profit for the period (5,271) 1,508 2,350
Other comprehensive income/loss:
Items that will not be reclassified subsequently to profit
and loss
Remeasurement of net defined benefit liability - - 138
Income tax relating to items not reclassified - - (28)
Items that will be reclassified subsequently to profit and
loss
(Loss)/gain on translation of overseas subsidiaries 511 (292) 137
------------------- -------------- ----------
Other comprehensive income/(charge) for the period net of
tax 511 (292) 247
Total comprehensive (loss)/profit for the period (4,760) 1,216 2,597
=================== ============== ==========
Hayward Tyler Group plc
Consolidated interim financial statements for the period ended
30 September 2016
Consolidated interim statement of changes in equity
Share Foreign
Reverse Based Currency
Share Merger Acquisition Payment Other Translation Retained
Unaudited Capital Share Premium Reserve Reserve Reserve Equity Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at
1 April 2016 554 36,677 14,502 (19,973) 93 18 375 (6,438) 25,808
Dividends - - - - - - - (460) (460)
Transactions
with owners - - - - - - - (460) (460)
--------- ---------------- ------------- ------------------ -------- --------- ------------ --------- --------
Loss for the
period - - - - - - - (5,271) (5,271)
Other
comprehensive
income/(loss):
Gain on
translation of
overseas
subsidiaries - - - - - - 511 - 511
--------- ---------------- ------------- ------------------ -------- --------- ------------ --------- --------
Total
comprehensive
income/(loss) - - - - - - 511 (5,271) (4,760)
--------- ---------------- ------------- ------------------ -------- --------- ------------ --------- --------
Balance at
30 September
2016 554 36,677 14,502 (19,973) 93 18 886 (12,169) 20,588
========= ================ ============= ================== ======== ========= ============ ========= ========
Foreign
Reverse Currency
Share Merger Acquisition Treasury Stock Other Translation Retained
Unaudited Capital Share Premium Reserve Reserve Reserve Equity Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at
1 April 2015 455 28,705 14,502 (19,973) (274) 18 238 (8,230) 15,441
Dividends - - - - - - - (362) (362)
Sale of shares - - - - 274 - - - 274
Share based
compensation 3 - - - - 34 - - 37
Transactions
with owners 458 - - - 274 34 - (362) (51)
--------- ---------------- ------------- ------------------ ---------------- --------- ------------ --------- -------
Profit for the
period - - - - - - - 1,508 1,508
Other
comprehensive
income/(loss):
Loss on
translation of
overseas
subsidiaries - - - - - - (292) - (292)
--------- ---------------- ------------- ------------------ ---------------- --------- ------------ --------- -------
Total
comprehensive
income/(loss) - - - - - - (292) 1,508 1,216
--------- ---------------- ------------- ------------------ ---------------- --------- ------------ --------- -------
Balance at
30 September
2015 458 28,705 14,502 (19,973) - 52 (54) (7,084) 16,606
========= ================ ============= ================== ================ ========= ============ ========= =======
Reverse Share Foreign
Acquisition Treasury Based Currency
Share Share Merger Stock Payment Other Translation Retained
Audited Capital Premium Reserve Reserve Reserve Reserve Equity Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 April
2015 455 28,705 14,502 (19,973) (274) - 18 238 (8,230) 15,441
Dividends - - - - - - - - (668) (668)
Issue of share
capital 99 7,902 - - - - - - - 8,001
Sale of shares - 70 - - 274 - - - - 344
Employee share based
compensation - - - - - 93 - - - 93
Transactions with
owners 99 7,972 - - - 93 - - (668) 7,770
-------- --------- -------- ------------ --------- -------- ------- ------------ --------- -------
Profit for the
period - - - - - - - - 2,350 2,350
Actuarial gain for
the period on
pension scheme - - - - - - - - 138 138
Deferred tax on
actuarial movement
on pension scheme - - - - - - - - (28) (28)
Gain on translation
of overseas
subsidiaries - - - - - - - 137 - 137
-------- --------- -------- ------------ --------- -------- ------- ------------ --------- -------
Total comprehensive
income - - - - - - - 137 2,460 2,597
-------- --------- -------- ------------ --------- -------- ------- ------------ --------- -------
Balance at
31 March 2016 554 36,677 14,502 (19,973) (274) 93 18 375 (6,438) 25,808
======== ========= ======== ============ ========= ======== ======= ============ ========= =======
Hayward Tyler Group plc
Consolidated interim financial statements for the period ended
30 September 2016
Consolidated cash flow statement
Unaudited Unaudited Audited
Six months Six months
to to
30 September 30 September Year to
2016 2015 31 March 2016
GBP000 GBP000 GBP000
Operating activities
Trading (loss)/profit before
tax (6,585) 1,845 5,147
Non-cash adjustment 891 772 1,995
Net changes in working
capital 381 50 116
Contributions to defined
benefit plan - - (210)
Payment of non-trading
items (117) (270) (1,359)
Taxes repaid/(paid) 464 (440) (548)
Net cash (used)/ generated
from operating activities (4,966) 1,957 5,141
-------------- -------------- ---------------
Investing activities
Purchase of property, plant
and equipment (4,010) (4,998) (10,803)
Proceeds from finance leases
to purchase property, plant
and equipment 2,031 1,091 1,578
Purchase of intangible
assets (89) (61) (765)
Acquisition of trade and
assets - - (10,132)
Disposal of property, plant
and equipment 49 - 7,460
Net cash used in investing
activities (2,019) (3,968) (12,662)
-------------- -------------- ---------------
Financing activities
Proceeds from borrowings 4,127 3,915 15,665
Repayment of borrowings (516) (660) (12,760)
Re-banking costs - - (258)
Dividends paid (460) (362) (668)
Proceeds from issue of
share capital - - 8,001
Sale of treasury shares - 274 344
Grant income received 140 962 1,605
Repayment of finance leases (356) (397) (631)
Interest paid (291) (293) (411)
Net cash generated from/(used
in) financing activities 2,644 3,439 10,887
-------------- -------------- ---------------
Net (decrease)/increase
in cash and cash equivalents (4,341) 1,428 3,366
Cash and cash equivalents
at beginning of period 5,135 1,769 1,769
Cash and cash equivalents
at end of period 794 3,197 5,135
============== ============== ===============
Hayward Tyler Group plc
Consolidated interim financial statements for the period ended
30 September 2016
Notes to the interim financial statements
1. General Information
Hayward Tyler Group plc's consolidated financial statements are
presented in Pounds Sterling (GBP), which is also the functional
currency of the ultimate parent company.
The Group includes both the Hayward Tyler and Peter Brotherhood
businesses, which together provide nearly 350 years of engineering
experience, heritage and pedigree. The Group is focused on
delivering performance-critical solutions for the most demanding
requirements to meet current and future global energy needs.
Hayward Tyler is a market leader in the design, manufacture and
servicing of performance-critical motors and pumps for the harshest
of environments. Peter Brotherhood is a market leader in the
design, manufacture and servicing of performance-critical steam
turbines, compressors and combined heat and power systems. The end
markets served by the Group include oil and gas (topside and
subsea), power generation (conventional and nuclear), the chemical
and industrial sectors, the marine market and sugar industry.
In addition to the head office in Luton (England), Hayward Tyler
has manufacturing and service support facilities in Kunshan
(China), Delhi (India), East Kilbride (Scotland) and Colchester
(USA) together with a sales office in Shanghai (China). Peter
Brotherhood has its manufacturing and servicing facility in
Peterborough (England). These facilities and staff provide cover 24
hours 7 days a week for maintenance, overhaul and repair.
2. Basis of preparation
These unaudited condensed consolidated interim financial
statements of Hayward Tyler Group plc are for the six months ended
30 September 2016. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of Hayward
Tyler Group plc for the year ended 31 March 2016. The financial
information for the year ended 31 March 2016 set out in these
interim consolidated financial statements does not constitute
statutory accounts as defined in the Isle of Man Companies Act 1931
to 2006. The Group's statutory financial statements for the year
ended 31 March 2016 have been filed with the Companies Registry.
The auditor's report on those financial statements was unqualified
and did not contain a statement under section 15.4 of the Isle of
Man Companies Act 1982.
3. Accounting policies
The condensed interim consolidated financial statements have
been prepared in accordance with the accounting policies adopted in
the last audited financial statements for the year ended 31 March
2016.
Trading and non-trading
The consolidated income statement reports the results for the
period under the headings Trading and Non-trading. Trading
represents the underlying performance of Hayward Tyler Group.
Non-trading represents non-recurring items, which in the period
relate to costs incurred on the acquisition of Peter
Brotherhood.
Estimates
When preparing the interim financial statements, management
undertakes a number of judgements, estimates and assumptions about
recognition and measurement of assets, liabilities, income and
expenses.
The judgements, estimates and assumptions applied in the interim
financial statements, including the key sources of estimation
uncertainty, were the same as those applied in the last annual
financial statements for the year ended 31 March 2016.
4. Segmental reporting
Management currently identifies the Group's two service lines,
original equipment manufacturing ("OE") and aftermarket services
("AM"), as operating segments.
The activities undertaken by the OE segment include the design
and manufacture of motors, pumps and steam turbine generators. The
AM segment provides a comprehensive range of aftermarket services
and spares supporting the Group's own product range as well as
those of other original equipment manufacturers.
The measurement policies the Group uses for segment reporting
are the same as those used in its financial statements, except
that:
- Centre of Excellence expenses net of grant income;
- expenses relating to share-based payments; and
- unallocated central costs
are not included in arriving at the operating profit of the
operating segments. In addition, corporate assets which are not
directly attributable to the business activities of any operating
segment are not allocated to a segment. There have been no changes
from prior periods in the measurement methods used to determine
reported segment profit of loss.
4. Segmental reporting (continued)
The acquisition of Peter Brotherhood took place in October 2015
and is therefore not included in the prior period below.
Segmental information can be analysed as follows for the
reporting periods under review:
OE AM Total
GBP000 GBP000 GBP000
Six months to 30 September
2016
Segment revenues from:
External customers 7,777 15,350 23,127
Other segments - - -
========= ========= =========
Segment revenues 7,777 15,350 23,127
Cost and expenses (12,110) (14,863) (26,974)
Segment operating loss (4,333) 487 (3,846)
========= ========= =========
Segment assets 27,800 37,308 65,108
========= ========= =========
OE AM Total
GBP000 GBP000 GBP000
Six months to 30 September
2015
Segment revenues from:
External customers 7,355 14,480 21,835
Other segments - - -
========= ========= =========
Segment revenues 7,355 14,480 21,835
Cost and expenses (7,462) (11,237) 18,699)
Segment operating (loss)/profit (107) 3,243 3,136
========= ========= =========
Segment assets 19,663 17,031 36,693
========= ========= =========
OE AM Total
GBP000 GBP000 GBP000
Year to 31 March 2016
Segment revenues from:
External customers 27,274 34,374 61,648
Other segments - - -
========= ========= =========
Segment revenues 27,274 34,374 61,648
Cost and expenses (26,403) (26,753) (53,156)
Segment operating profit 871 7,621 8,492
========= ========= =========
Segment assets 19,949 27,135 47,084
========= ========= =========
4. Segmental reporting (continued)
The totals presented by the Group's operating segments reconcile
to the entity's key financial figures as presented in its financial
statements as follows:
Six months Six months
to to Year to
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
Segment revenues
Segment revenues 23,127 21,835 61,648
Elimination of inter-segmental
revenues - - -
============== ============== ==========
23,127 21,835 61,648
Segment profit
Segment operating (loss)/profit (3,846) 3,136 8,492
Centre of Excellence expenses
net of grant income (478) (532) (896)
Other operating costs not allocated (1,041) (496) (1,503)
Foreign currency exchange differences (277) (102) (327)
-------------- -------------- ----------
Recurring operating (loss)/profit (5,642) 2,006 5,766
Non-recurring expenses (117) (270) (1,777)
Operating (loss)/profit (5,759) 1,736 3,989
Finance costs (386) (297) (961)
Gain/(loss) on fair value of
derivatives (557) 136 (40)
Group (loss)/profit before tax (6,702) 1,575 2,988
============== ============== ==========
Segment total assets
Total segment assets 65,108 36,693 47,084
Group 38,723 49,623 59,643
Consolidation (38,896) (38,250) (39,503)
Group total assets 64,935 48,066 67,224
============== ============== ==========
4. Segmental reporting (continued)
The Group's revenues from external customers and its non-current
assets (other than goodwill and deferred tax assets) are divided
into the following geographical areas:
Six months to Six months to Year to
30 September 2016 30 September 2015 31 March 2016
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue Non-current assets Revenue Non-current assets Revenue Non-current assets
Africa & Middle East 956 - 201 - 3,212 -
Americas & Caribbean
(excl USA) 2,010 - 1,567 - 4,170 -
Asia Pacific (excl
China) 6,984 5 5,494 5 15,326 5
China 1,415 191 3,215 159 7,762 144
Europe (excl UK) 2,898 - 2,877 - 6,008 -
United Kingdom 3,143 26,822 3,343 15,383 11,628 24,923
United States of America 5,722 2,870 5,139 1,258 13,542 1,816
23,127 29,888 21,835 16,805 61,648 26,888
======== =================== ======== =================== ======== ===================
Revenues from external customers in the Group's domicile, United
Kingdom, as well as its major markets, have been identified on the
basis of the customers' geographical location. Non-current assets
are allocated based on their physical location.
5. Trading EBITDA
The trading earnings before interest, tax, depreciation and
amortisation are as follows:
Six months to Six months to Year to
30 September 30 September
2016 2015 31 March 2016
GBP000 GBP000 GBP000
Trading EBITDA
Operating (loss)/profit (5,642) 2,006 5,766
Depreciation and
amortisation 1,025 577 1,401
(4,617) 2,583 7,167
============== ============== ==============
6. Finance costs
Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
Trading
Interest payable on bank borrowing 337 203 371
Finance costs of pensions - 31 2
(Gain)/loss arising on fair value of derivative contracts 557 (136) 40
Unwinding of discount on provisions 39 - -
Finance charges - re-banking 10 63 206
-------------- -------------- ----------
943 161 619
Non - trading
Finance charges - prepayment - - 382
943 161 1,001
============== ============== ==========
7. Earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
and the post-tax effect of dividends and/or interest, on the
assumed conversion of all dilutive options and other dilutive
potential ordinary shares.
Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
Adjusted Earnings per share calculations
based Trading (Loss)/Profit
Trading (Loss)/Profit for the period (GBP000) (5,052) 1,768 4,550
Weighted average number of shares (used for basic earnings per share) 54,608,885 45,266,877 48,047,956
Shares deemed to be issued for no consideration
in respect of share-based payments 713,935 385,042 8,017
-------------- -------------- -----------
Weighted average number of shares used in diluted earnings per share 55,322,820 45,651,919 48,055,973
-------------- -------------- -----------
Basic earnings per share (pence) (9.25) 3.91 9.47
-------------- -------------- -----------
Diluted earnings per share (pence) (9.13) 3.87 9.47
-------------- -------------- -----------
7. Earnings per share (continued)
Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
Earnings per share calculations
Based on Total (Loss)/ Profit
(Loss)/Profit for the period (GBP000) (5,271) 1,508 2,350
Weighted average number of shares (used for basic earnings per share) 54,608,885 45,266,877 48,047,956
Shares deemed to be issued for no consideration
in respect of share-based payments 713,935 385,042 8,017
-------------- -------------- -----------
Weighted average number of shares used in diluted earnings per share 55,322,820 45,651,919 48,055,973
-------------- -------------- -----------
Basic earnings per share (pence) (9.65) 3.33 4.89
-------------- -------------- -----------
Diluted earnings per share (pence) (9.53) 3.30 4.89
-------------- -------------- -----------
8. Dividends
A final dividend of 0.83 pence per ordinary share was declared
during the period representing a total of GBP459,693 (1H2016:
GBP361,831). An interim dividend in respect of the current year of
0.58 pence per ordinary share will be paid in February 2017.
9. Tax
Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
GBP000 GBP000 GBP000
Current tax
UK tax corporation tax at 20%
(H1 2016: 20%) - 74 -
Amounts under provided in prior years - 15 -
Overseas taxation (401) 59 840
Adjustment in respect of prior years 12 (163) (110)
Total current tax (credit)/charge (399) (15) 730
-------------- -------------- ----------
Deferred tax
Acceleration of capital allowances 122 (56) 238
(Gains)/losses available for offset against future taxable income (1,228) 140 (311)
Retirement benefit obligations - - 69
Less movement recorded in other comprehensive income - - (28)
Other temporary differences (4) (19) (103)
Derivatives (111) 27 (8)
Effect of change in tax rate 127 - 253
Amounts (over)/under provided in prior years 62 (100 (202)
Deferred tax charge (1,032) 82 (92)
-------------- -------------- ----------
Tax charge reported in the income statement (1,431) 67 638
============== ============== ==========
Deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available in future against
which deductible temporary differences can be utilised. This
recognition is supported by the profitability of the trading
operations of the business.
10. Pensions
No interim valuation of the pension liability has been carried
out at 30 September 2016. As a result no actuarial gain or loss has
been recognised in the consolidated statement of other
comprehensive income and no change has been made to the net
obligation for pensions recognised in the statement of financial
position from that at 31 March 2016. The gains and losses for the
full year together with any surplus or deficit at the year-end will
be presented in the Annual Report and Accounts of the Group for the
year to 31 March 2017.
The net defined benefit surplus for pensions recognised in the
statement of financial position as at 31 March 2016 was GBP0.2
million. This surplus represented the difference between the value
of the scheme assets and the scheme liabilities. The value of the
scheme liabilities were determined using actuarial assumptions
developed by management under consideration of expert advice
provided by independent actuarial advisers. The assumptions
included a discount rate of 3.35%, which was based on prevailing
relevant bond yields at the time, and inflation rates of 2.0% per
annum in respect of CPI and 2.8% per annum in respect of RPI, based
on the market's expectation of future inflation at that time.
Taking together the value of the scheme assets, the discount
rate and the expectations for inflation at 30 September 2016, the
value of the pension asset is not expected to have changed
materially from that at 31 March 2016 of GBP0.2 million.
11. Share capital
At 30 September At 30 September At 31 March
2016 2015 2016
No. No. No.
Shares issued and fully paid:
Beginning of the period 55,384,856 45,507,404 45,507,404
Issued in the period - - 9,333,334
Issued under share-based
payment plans - 294,118 544,118
----------------- ---------------- ------------
Total shares authorised at
the end of the period 55,384,856 45,801,522 55,384,856
================= ================ ============
Shares issued under share based payment plans represent those
shares awarded under the LTIP scheme. These shares have been
awarded to senior management and are subject to recall if vesting
conditions associated with the share options are not met.
12. Fair value measurement of financial instruments
IAS 34 requires disclosure of the fair value of financial
instruments addressed in IFRS 13 and IFRS 7. These disclosures
include the classification of fair values within a three level
hierarchy. The three levels are defined based on the observability
of significant inputs to the measurement, as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly or indirectly; and
-- Level 3: unobservable inputs for the asset or liability.
The following table shows the hierarchy of financial liabilities
measured at fair value at each reporting date:
At At At
30 September 30 September 31 March
Level 2 2016 2015 2016
Financial liabilities
Forward exchange contracts (849) (117) (292)
-------------- -------------- ----------
Total liabilities (849) (117) (292)
-------------- -------------- ----------
Net fair value (849) (117) (292)
============== ============== ==========
Measurement of fair value
The forward exchange contracts have been valued by the Group's
bank using observable forward exchange rates and interest rates
corresponding to the maturity of the contract. The effects of the
unobservable inputs are not significant for forward exchange
contracts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFLFLELSLIR
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