Interim Results
Wednesday 27 February 2012
Avingtrans plc
("Avingtrans" or the "Group")
Interim results for the six months ended 30 November 2012
Avingtrans plc, which designs, manufactures and supplies critical components
and associated services to the aerospace, energy and medical sectors, today
announces its interim results for the six months ended 30 November 2012.
Corporate Highlights
* Sale of Jena Tec to Kuroda of Japan for £12.4m cash net of debt to create
focused business in Aerospace and Energy & Medical sectors
* Acquisition of Aerotech Tubes for £1.9m, net of cash
* Acquisition of PFW Farnborough assets completed post period end for £1.85m
cash
Financial Highlights
* Revenue from continuing operations increased by 19% to £16.9m (H1 2012: £
14.2m)
* Order book of continuing businesses remains at record levels, driven by
Aerospace
* EBITDA of continuing operations was £1.1m (H1 2012: £1.0m)
* Profit after tax was £6.5m (H1 2012: £0.7m), including £6.1m profit on
disposal of Jena Tec
* Fully diluted EPS (from continuing and discontinued operations) of 24.3
pence per share (H1 2012: 2.6 pence per share)
* Cash generated from operations was £0.3m (H1 2012: £0.4m)
* Following the disposal of Jena Tec, the Group ended the half year with net
cash of £0.3m (May 2012: net debt of £8.4m)
* Commitment to an enhanced dividend on achieving final results this year
Highlights of Continuing Operations
Aerospace grew robustly, with an increase in revenues of 25%
* Long term agreements signed with existing and acquired customers, providing
visibility of revenues, including:
+ £80m of revenue over 10 years with Rolls Royce
+ £20m of revenue over 10 years with key Aerotech Tubes customer
+ £25m of revenue over 10 years with Safran Aircelle, customer of PFW
Farnborough
* Another solid first half for C&H, with new capabilities in development for
the second half
* Composites made a loss, but also made good progress with the EU "Clean
Skies" project
* Commencement of "special processing" and pipe assembly production in China
Energy and Medical division achieved breakeven overall in the first half
* Metalcraft continued its steady recovery, with revenue up by 8% in the
first half
* Crown's markets remained tough, but losses were much reduced and prospects
are improving
Commenting on the results, Roger McDowell, Chairman, said:
"Whilst the word transformation is overused in business terms it undoubtedly
summarises the events at Avingtrans over the last few months. The sale of the
Jena Tec business (for £12.4m, net of debt) and subsequent acquisitions of
Aerotech Tubes and PFW Farnborough (at a combined cost of £3.75m), has created
a Group clearly focused on two businesses (Sigma Components and Metalcraft),
serving OEMs in clearly defined markets (Aerospace, Energy and Medical) with
highly engineered components and services.
"As a result we have a market leading position in the aerospace pipes niche and
have recently secured three key long term agreements with major clients worth £
125m of revenue over the next 10 years. With this strength of visibility we
have once again concluded that we can commit to the payment of an enhanced
dividend with the final results this year, rewarding our loyal investors for
their continued support."
Enquiries:
Avingtrans plc tel. 01159 499 020
Roger McDowell, Chairman
Steve McQuillan, Chief Executive Officer
Stephen King, Chief Financial Officer
Numis
David Poutney (Corporate Broking) 0207 260 1000
Richard Thomas (Corporate Finance and Nominated Adviser)
Newgate Threadneedle (Financial PR) 020 7653 9850
Josh Royston / Heather Armstrong
About Avingtrans plc:
Avingtrans has become a significant organisation in the design, manufacture and
supply of critical components and associated services to global industrial
markets from two divisions: aerospace and energy and medical.
Aerospace
Sigma Components- UK and China
Sigma Components is a market leader in rigid and flexible pipe
assemblies and components for prestigious aerospace customers such as
Rolls Royce, Bombardier, Safran and Meggitt. Sigma also manufactures
precision prismatic components and composite components for the
aerospace industry from its purpose-built facilities in the UK and
Chengdu, China. Sigma Components operates from a number of sites, as
follows:
Hinckley, UK: centre for rigid and flexible pipe assemblies and
components
Derby, UK: (formerly Aerotech Tubes): satellite facility to Hinckley,
producing pipe assemblies
Farnborough, UK (formerly PFW): centre for fabrications, ducts and
other complex assemblies
Chengdu, China: centre for precision prismatic components, now also
producing pipe assemblies
Buckingham, UK: centre for composite parts and machining services to
customers in Aerospace, F1/Motorsport and industrial markets.
Sandiacre, UK (C&H): centre for precision polishing and specialist
finishing on aeroengine turbine blades, compressor blades and vanes for
the power generation industries.
Energy and Medical
Metalcraft - UK and China
Provider of safety-critical equipment for the energy, medical, science
and research communities, worldwide, specialising in precision pressure
and vacuum vessels and associated fabrications, sub-assemblies and
systems.
Crown International - UK
Designs and manufactures market-leading pole and support systems for
roadside signage and safety cameras, rail track signalling and
gantries.
Chairman's Statement
In years to come, we will look back on 2012 as a pivotal year for Avingtrans.
With the sale of Jena Tec and the subsequent acquisitions of Aerotech Tubes,
Derby and PFW, Farnborough, the metamorphosis of the group into a niche
engineering market leader is largely complete. These transactions enable
Avingtrans to focus fully on the two remaining core businesses - Sigma and
Metalcraft. Without the sale of Jena Tec we could not realistically hope to
achieve true critical mass in the other divisions, or sustain the proactive
investment requirements to maximise shareholder returns over the longer term.
This decision has already been vindicated with two highly significant new long
term agreements for the newly acquired businesses in Derby and Farnborough
being testament to our niche market leadership in aerospace pipes and our
intent to aggressively pursue new opportunities. These two deals followed hot
on the heels of the largest ever deal for the Group - the £80m, 10-year
contract for supply of pipes and prismatic aerospace components to Rolls Royce,
our biggest customer.
We believe that we are very well placed to take advantage in each of our chosen
markets. Civil aerospace remains particularly strong and, whilst the broader
Energy market is less consistent in outlook, we are nimble enough to skip
between the various sub-sectors as opportunities present themselves. With the
new MRI product for Siemens ramping up at last, our Medical market prospects
are also encouraging. Our market leadership in our core niches is a rock solid
foundation to build on and we fully intend to cement our advantage. Commodity
costs are under control and we have agreements in place to isolate us from
volatility.
Results in the first half, excluding the proceeds of the Jena Tec sale, were
broadly in line with expectations, with revenue from continuing operations up
by 19% versus the first half of last year (or 6% including Jena Tec results)
and we expect the usual stronger second half performances in revenues and
margins; both in Aerospace - lifted by the acquisitions and expected
improvements at the Sigma Composites business - and in Energy and Medical,
where Metalcraft continues to improve and Crown is less problematic than in the
previous two years.
At the recent group management conference, we exhorted our teams to join us in
"designing the future". Our employees, both existing and new, continue to
demonstrate determination to succeed in demanding markets that need everyone to
operate consistently to impeccable quality standards, with integrity and
agility. These qualities will drive the business forward as we navigate the
road ahead. As ever, I would like to thank all of our people for their
strenuous efforts to design a better future for Avingtrans.
Roger McDowell
Chairman
27 February 2013
Business Review
Group Performance
Revenue: Growth continues
Civil aerospace continued to buoy our first half revenues and other markets
generally trended positively also, albeit more sedately. Energy is a broad
sector and there were a few "downs" as well as "ups", but progress in the
Medical arena with Siemens compensated for lower sales to Cummins, for example.
Crown also had a better first half, though the transport infrastructure market
remains depressed. Both continuing divisions are able to report growth, with
first half revenues of continuing operations increasing by 19% to £16.9m (H1
2012: £14.2m). If we include Jena Tec, revenues increased by 6% to £21.4m (H1
2012: £20.2m).
Profit: Margins Stable
Profit figures are distorted by the sale of Jena Tec and the process leading up
to this, making comparisons difficult. Aerospace profits were temporarily
depressed in the first half by a loss at Composites, but we expect improvement
in the second half. The Energy and Medical division again advanced, with
increased investment in China, with reduced losses at Crown also contributing
to improvements. Overall gross margins of continuing businesses were down
slightly to 23.3% (H1 2012: 24.1%). Despite the loss at Sigma Composites in the
first half, EBITDA of continuing operations was £1.1m (H1 2012: £1.0m). The
overall Profit for the first half was £6.5m (H1 2012: £0.7m), including £6.1m
from the sale of Jena Tec (Note 7).
Earnings per Share (EPS): Boosted by disposal
Adjusted diluted earnings per share from continuing operations for the period
ending 30 November 2012 was 1.5 pence per share (H1 2012: 1.3 pence per share)
based on weighted average number of shares of 26,940,368 (H1 2012: 25,969,275).
Diluted earnings per share attributable to shareholders was 24.3 pence per
share (H1 2012: 2.6 pence per share).
Funding and Liquidity: Debt position materially improved
The net cash flow from operations was £0.3m (H1 2012: £0.4m).
Net cash at 30 November 2012 stood at £0.3m, driven by the Jena Tec disposal
and the Aerotech Tubes acquisition (31 May 2012: Net Debt of £8.4m). Note that
these figures exclude the PFW Farnborough acquisition, which took place just
after half-year end, for a consideration of £1.85m.
Dividend: Maturing policy
The reinstated Interim dividend of 0.7 pence per share (H1 2012: 0.0 pence per
share) will be paid on 14 June 2013 to shareholders on the register at 26 April
2013. The transformation of the balance sheet combined with a strong order book
has enabled the board to reinstate the interim dividend and, in the absence of
unforeseen circumstances, expects to increase this year's final payment as part
of a progressive dividend policy.
Operations
Aerospace Division (Sigma Components)
With the acquisitions of Aerotech Tubes, Derby and (after half-year end) PFW,
Farnborough, Sigma Components has entered a new and exciting phase of its
journey towards world class aerospace components supply. These two acquisitions
have propelled us to a market leading position in aerospace pipes, as well as
adding new capabilities and products (eg Ducts) that we can build upon in the
future. We are now in the midst of a rebranding exercise that will unify all of
the businesses in the division under the Sigma Components banner and provide
stability and clarity for both customers and investors alike.
The civil aerospace market remained healthy in the first half and our more
potent market position drove revenues upwards. OEM customers are in growth mode
in most world regions and in its latest outlook presentation, Rolls Royce, our
biggest customer, recently underlined a strong 20-year forecast, with Asian air
traffic expected to grow to double the size of Europe, or North America over
that period. Rolls Royce also recently reported record results and a growing
order book.
Aerospace division sales were up by 25% in comparison with the prior year. We
also have a record order book, most notably boosted by the £80m, 10-year
contract to supply pipes and components to Rolls Royce. In the first half, we
also signed a new 10-year agreement worth £20m of revenue to our Derby site
(formerly Aerotech Tubes) as part of the acquisition process. Recently, we
announced another significant contract with Safran Aircelle for Farnborough,
worth £25m in revenues over 10-years. Discussions are on-going with both
existing and new customers regarding further contract extensions and long term
agreements.
Although Aerospace margins were temporarily suppressed by losses at the
Composites business in Buckingham in the period, we believe that underlying
divisional margins are still strong and are expected to improve in the second
half.
Briefly summarising activities at the Aerospace sites:
* Hinckley grew solidly in the first half, with the £80m Rolls Royce contract
underpinning the work there for the foreseeable future and work with other
customers is stable.
* Derby (Aerotech Tubes) is already well integrated with our Hinckley site
and developing in line with initial expectations, having signed the £20m
contract with its key customer in 2012.
* Farnborough (PFW) is performing ahead of initial expectations, with
recovery in results now expected earlier in the next financial year than
originally thought. The recent £25m contract win with Safran Aircelle is a
good sign of a rapidly improving outlook for the site. This business also
gives us new product areas to develop with customers beyond pipes.
* Chengdu grew rapidly in the first half, up by 28%, as Chinese operations
continue to mature. The majority of sales are to sister companies in the
division, with regional market sales also developing, albeit more long
term. We successfully completed the first phase of our investment in pipe
assembly for this site and anticipate new business coming from this source
in the near term.
* Buckingham (Composites) developed more slowly than we expected, with F1
business more difficult to re-establish than we previously presumed,
resulting in a first half loss. However, other customers are developing and
we are making headway with investment in composite aerospace components, in
line with the EU "Clean Skies" contract won earlier in 2012.
* Sandiacre (C&H, Polishing) had a solid first half. Although growth was
slower, margins have held up well and new investment will again widen
capability in the second half, reinvigorating growth prospects for this
part of the business.
Energy & Medical Division (Metalcraft and Crown)
Sales in the division were up by 12% versus the first half of last year and the
divisional result was breakeven at EBIT level, a modest improvement on the
previous first half last year.
Summarising the position at the Energy & Medical sites:
* Metalcraft, Chatteris: Market conditions at Metalcraft are positive
overall, though business with Cummins significantly reduced in the first
half, due to changes in their market conditions. However, this was
counterbalanced by the ramp-up of the new Siemens product finally coming on
stream - and this is set to strengthen in the second half. Other customers
in the UK began to show promising signs - eg Heatric (Meggitt) where
volumes are increasing from a low initial base. We are also encouraged by
prospects in the civil nuclear market - namely in the reprocessing and
waste storage sectors, where Sellafield, Magnox and their Tier 1 suppliers,
who are our customers, are intensifying their activities.
* Metalcraft, Chengdu: We have taken on a new lease contract for a facility
which will house our MRI activities with Siemens from next financial year
(all of the new products supplied thus far to Siemens being produced in the
UK). In addition, other Far East Medical customers continue to develop
their activities with us and we anticipate further capex investment in our
next financial year. Despite the increased investment, we expect a result
close to breakeven in China for the full year. As previously noted, we are
able to scale Metalcraft's China operations more easily than we did with
Sigma in the initial stages and we also learned some valuable lessons from
our previous start up.
* Crown in Bristol saw a welcome return to growth in the first half, with
sales up significantly from a very low base. Since we previously reduced
costs in this business, we were able to record a much improved result,
although still a loss in the first half. Whilst trading is not yet
"normalised", prospects are now improving slowly and we expect modest
growth to continue in the second half and beyond. Therefore, overall
results this year are not expected to have a material adverse impact on
Group performance and the slow recovery looks likely to persist into the
next financial year.
Industrial Products Division (Jena Tec)
The sale of Jena Tec in November to Kuroda of Japan swamps many of the figures
in this report and makes meaningful comparison with the previous divisional
performance difficult. The business was sold for a cash consideration of £
12.4m, net of debt, with the resulting exceptional profit being £6.1m from this
transaction. Although the division contributed five months of sales to our
first half, the revenue cannot be compared to previous periods faithfully at
the divisional level, due to various termination effects in the figures and due
to the fact Jena Tec was sold before the end of the half. However, actual sales
in the first five months were £4.4m.
The sale allows Avingtrans to focus fully on its two remaining core businesses
- Sigma and Metalcraft. Without this, we could not hope to achieve true
critical mass in the other divisions, or sustain the proactive investment
requirements to maximise shareholder returns over the longer term.
Outlook
With the transformation of the group progressing to plan in attractive
structural growth markets and durable customer relationships, we are confident
about the long term future of Avingtrans. Therefore, we look forward with
confidence to the second half and beyond.
Our focused strategy is now bearing fruit, producing significant new business
wins that support our short term results and provide visibility of longer term
earnings. Our exceptional customer base and resulting concentration on
differentiated product niches offers a degree of protection to cyclical
markets. We are well placed to benefit from any further consolidation in our
markets.
Sigma Components and Metalcraft are developing into clear market leaders in
their chosen niches, providing customers with consistent quality as part of a
world class journey and investors with the opportunity to participate in a
great British engineering story.
Roger McDowell Steve McQuillan Stephen King
Chairman Chief Executive Officer Chief Financial Officer
27 February 2013 27 February 2013 27 February 2013
Consolidated Income Statement (Unaudited)
for the six months ended 30 November 2012
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Revenue 16,948 14,247 32,153
Cost of sales (12,999) (10,812) (24,532)
Gross profit 3,949 3,435 7,621
Distribution costs (341) (285) (484)
Administrative expenses (3,131) (2,682) (5,880)
Share based payment expense (15) (15) (35)
Impairment of goodwill - - (850)
Acquisition costs (50) - -
Amortisation of intangibles from business (69) (69) (137)
combinations
Operating profit 343 384 235
Finance income - 2 2
Finance costs (143) (101) (229)
Profit before taxation 200 285 8
Taxation (Note 3) 57 (32) (22)
Profit/(loss) after tax from continuing 257 253 (14)
operations
Profit after tax from discontinued 6,279 430 949
operations
Profit for the financial period 6,536 683 935
Earnings/(loss) per share :
From continuing operations
- Basic 1.0p 1.0p 0.0p
- Diluted 1.0p 1.0p 0.0p
From continuing and discontinued operations
- Basic 25.1p 2.7p 3.6p
- Diluted 24.3p 2.6p 3.5p
Consolidated statement of comprehensive income (Unaudited)
for the six months ended 30 November 2012
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Profit for the period 6,536 683 935
Exchange differences on translation of (284) 92 (44)
foreign operations
Exchange differences realised on disposal (585) - -
(Note 7)
Total comprehensive income for the period 5,667 775 891
Consolidated cash flow statement (Unaudited)
for the six months ended 30 November 2012
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Operating activities
Cash flows from operating activities 302 414 2,161
Finance costs paid (180) (150) (329)
Income tax paid (366) (171) (258)
Net cash (outflow)/inflow from (244) 93 1,574
operating activities
Investing activities
Acquisition of subsidiaries (net of (1,889) - -
cash)
Disposal of subsidiaries (net of 12,429 - -
cash)
Finance income - 2 2
Purchase of intangible assets (263) (466) (759)
Purchase of property, plant and (1,370) (1,175) (2,759)
equipment
Proceeds from sale of property, - 1 43
plant and equipment
Net cash generated by/(used in) 8,907 (1,638) (3,473)
investing activities
Financing activities
Equity dividends paid - - (104)
Repayments of borrowings (268) (477) (481)
Repayments of obligations under (703) (339) (996)
finance leases
Borrowings raised 1,584 588 1,577
Net cash inflow/(outflow) from 612 (228) (4)
financing activities
Net increase/(decrease) in cash and 9,275 (1,773) (1,903)
cash equivalents
Cash and cash equivalents at (2,353) (564) (564)
beginning of period
Effect of foreign exchange rate (842) 110 (114)
changes
Cash and cash equivalents at end of 6,080 (2,227) (2,353)
period
Cashflows from operating activities (Unaudited)
for the six months ended 30 November 2012
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Profitbefore income taxfrom 200 285 8
continuing activities
Profit before income tax from 274 561 1,227
discontinued activities
Adjustments for:
Depreciation of property, plant and 617 594 1,248
equipment
Amortisation of intangible assets 341 247 497
Profit on disposal of property, plant - (1) (3)
and equipment
Finance income - (2) (2)
Finance expense 180 150 328
Share based payment charge 20 21 47
Impairment of available for sale - - 219
investment
Impairment of goodwill - - 850
Changes in working capital
(Increase)/decrease in inventories (1,018) (943) (1,285)
(Increase)/decrease in trade and (306) (1,063) (2,109)
other receivables
(Decrease)/increase in trade and (8) 561 1,129
other payables
Other non cash changes 3 4 7
Cashflows from operating activities 302 414 2,161
Summarised consolidated balance sheet (Unaudited)
at 30 November 2012
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Non current assets
Goodwill 9,487 10,242 10,242
Other intangible assets 2,357 2,201 2,574
Property, plant and equipment 9,171 10,529 10,954
Investment property 600 600 600
Deferred tax 76 39 76
Investments - 219 -
21,691 23,830 23,596
Current assets
Inventories 7,006 8,756 9,003
Trade and other receivables 10,894 9,932 10,940
Current tax asset - 37 22
Cash and cash equivalents 10,509 2,168 1,849
28,409 20,893 21,814
Total assets 50,100 44,723 45,410
Current liabilities
Trade and other payables (8,947) (8,886) (9,389)
Obligations under finance leases (595) (912) (994)
Borrowings (5,149) (4,671) (4,726)
Current tax liabilities (504) (709) (906)
Total current liabilities (15,195) (15,178) (16,015)
Non-current liabilities
Borrowings (3,147) (3,001) (3,200)
Obligations under finance leases (1,336) (1,619) (1,376)
Deferred tax (1,043) (1,271) (1,127)
Total non-current liabilities (5,526) (5,891) (5,703)
Total liabilities (20,721) (21,069) (21,718)
Net assets 29,379 23,654 23,692
Equity
Share capital 1,302 1,302 1,302
Share premium account 9,787 9,787 9,787
Capital redemption reserve 814 814 814
Merger reserve 402 402 402
Translation reserve (402) 603 467
Other reserves 180 180 180
Investment in own shares (281) (281) (281)
Retained earnings 17,577 10,847 11,021
Equity attributable to owners of 29,379 23,654 23,692
the Company
Consolidated statement of changes in equity (Unaudited)
at 30 November 2012
Share Share Capital Merger Trans- Other Investment Retained Total
capital premium redemp- reserve lation reserves in own earnings
account account tion reserve shares
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 June 2011 1,274 9,534 814 402 511 180 - 10,143 22,858
Shares issued 28 253 - - - - - - 281
Investment in - - - - - - (281) - (281)
own shares
Share-based - - - - - - 21 21
payments
Transactions 28 253 - - - - (281) 21 21
with owners
Profit for the - - - - - - - 683 683
period
Other
comprehensive
income
Exchange rate - - - - 92 - - - 92
gain
Total - - - - 92 - - 683 775
comprehensive
income for the
year
At 30 Nov 2011 1,302 9,787 814 402 603 180 (281) 10,847 23,654
At 1 Dec 2011 1,302 9,787 814 402 603 180 (281) 10,847 23,654
Dividend paid - - - - - - - (104) (104)
Share-based - - - - - - - 26 26
payments
Transactions - - - - - - (78) (78)
with owners
Profit for the - - - - - - 252 252
period
Other
comprehensive
income
Exchange rate - - - - (136) - - (136)
loss
Total - - - - (136) - 252 116
comprehensive
income for the
year
At 31 May 2012 1,302 9,787 814 402 467 180 (281) 11,021 23,692
At 1 June 2012 1,302 9,787 814 402 467 180 (281) 11,021 23,692
Share-based - - - - - - - 20 20
payments
Transactions - - - - - - - 20 20
with owners
Profit for the - - - - - - - 6,536 6,536
period
Other
comprehensive
income
Realised on - - - - (585) - - - (585)
disposal of
subsidiaries
Exchange rate - - - - (284) - - - (284)
loss
Total - - - - (869) - - 6,536 5,667
comprehensive
income for the
year
At 30 Nov 2012 1,302 9,787 814 402 (402) 180 (281) 17,577 29,379
Notes to the half year statement
30 November 2012
1. Basis of preparation
The Group's interim results for the six month period ended 30 November 2012 are
prepared in accordance with the Group's accounting policies which are based on
the recognition and measurement principles of International Financial Reporting
Standards (`IFRS') as adopted by the EU and effective, or expected to be
adopted and effective, at 31 May 2013. As permitted, this interim report has
been prepared in accordance with the AIM rules and not in accordance with IAS34
`Interim financial reporting'.
These interim results do not constitute full statutory accounts within the
meaning of section 434 of the Companies Act 2006 and are unaudited. The
unaudited interim financial statements were approved by the Board of Directors
on 27 February 2013 and will shortly be available on the Group's website at
http://www.avingtrans.plc.uk/pages/reports.html.
The consolidated financial statements are prepared under the historical cost
convention as modified to include the revaluation of financial instruments. The
accounting policies used in the interim financial statements are consistent
with IFRS and those which will be adopted in the preparation of the Group's
annual report and financial statements for the year ended 31 May 2013. The
statutory accounts for the year ended 31 May 2012, which were prepared under
IFRS, have been filed with the Registrar of Companies. These statutory accounts
carried an unqualified Auditors' Report and did not contain a statement under
either Section 498(2) or (3) of the Companies Act 2006.
2. Segmental analysis
Aerospace Energy and Unallocated Total
Medical Central
items
£'000 £'000 £'000 £'000
6 months ended 30
Nov 2012
Revenue 9,771 7,177 - 16,948
Operating profit/ 698 (25) (330) 343
(loss)
Year ended 31 May 2012
Revenue 17,071 15,082 - 32,153
Operating profit/ 1,684 (767) (682) 235
(loss)
6 months ended 30
Nov 2011
Revenue 7,820 6,427 - 14,247
Operating profit/ 804 (85) (335) 384
(loss)
3. Taxation
The taxation credit/(charge) is based upon the expected effective rate for the
year ended 31 May 2013.
4. Earnings per share
Basic earnings per share is based on the earnings attributable to ordinary
shareholders and the weighted average number of ordinary shares in issue during
the year.
For diluted earnings per share the weighted average number of ordinary shares
is adjusted to assume conversion of all dilutive potential ordinary shares,
being the CSOP and EMI share options.
6 months to 6 months to Year to
30 Nov 2012 30 Nov 2011 31 May 2012
No No No
Weighted average number of 26,030,577 25,580,029 25,925,592
shares - basic
Share Option adjustment 909,791 389,246 453,282
Weighted average number of 26,940,368 25,969,275 26,378,874
shares - diluted
£'000 £'000 £'000
Earnings/(loss) from continuing 257 253 (14)
operations
Share based payments 15 15 35
Impairment of goodwill - - 850
Acquisition costs 50 - -
Amortisation of intangibles 69 69 137
Adjusted earnings from 391 337 1,008
continuing operations
From continuing operations:
Basic earnings per share 1.0p 1.0p 0.0p
Diluted earnings per share 1.0p 1.0p 0.0p
Adjusted basic earnings per 1.5p 1.3p 3.9p
share
Adjusted diluted earnings per 1.5p 1.3p 3.9p
share
Earnings from discontinued 6,279 430 949
operations
Share based payments 5 6 12
Adjusted earnings from 6,284 436 961
discontinued operations
From discontinued operations:
Basic earnings per share 24.1p 1.7p 3.6p
Diluted earnings per share 23.3p 1.7p 3.5p
Adjusted basic earnings per 24.1p 1.7p 3.6p
share
Adjusted diluted earnings per 23.3p 1.7p 3.6p
share
Earnings attributable to 6,536 683 935
shareholders
Adjusted earnings attributable 6,675 773 1,969
to shareholders
Basic earnings per share 25.1p 2.7p 3.6p
Diluted earnings per share 24.3p 2.6p 3.5p
Adjusted basic earnings per 25.6p 3.0p 7.6p
share
Adjusted diluted earnings per 24.8p 3.0p 7.5p
share
The Directors believe that the above adjusted earnings per share calculation
from continuing operations is the most appropriate reflection of the Group
performance.
5. Discontinued operations
On 8 November 2012 the Company disposed of its Industrial Products Division,
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Revenue 4,424 5,997 11,839
Expenses (4,150) (5,436) (10,612)
Profit before taxation 274 561 1,227
Taxation (79) (131) (278)
Profit after tax from discontinued 195 430 949
operations
The Industrial Products Division contributed the following to the Groups
cashflows:
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2012 2011 2012
£'000 £'000 £'000
Operating cashflows 606 (58) 438
Investing activities (280) (398) (813)
Financing activities 68 54 (35)
6. Acquisition of subsidiary
On 23 November 2012 the group acquired 100 percent of the issued share capital
of AeroTech Tubes Limited, the provisional net assets at the date of
acquisition were as follows:
£'000
Property, plant and equipment 52
Inventories 240
Trade and other receivables 822
Deferred tax asset 1
Cash and cash equivalents 632
Trade and other payables (574)
Current tax liabilities (115)
Net Assets 1,058
Intangible assets acquired 145
Goodwill 1,318
Total consideration paid 2,521
Aerotech Tubes contributed £56,000 to group revenues and £4,000 to profit after
tax for the period between the date of acquisition and the balance sheet date.
Acquisition costs arising from this transaction of £50,000 have been included
in overheads before operating profit.
7. Disposal of subsidiary
On 8 November 2012 the Company disposed of its Industrial Products Division,
the net assets at the date of disposal were as follows:
£'000
Goodwill 1,224
Other intangible assets 284
Property, plant and equipment 2,584
Inventories 3,236
Trade and other receivables 1,160
Cash and cash equivalents 596
Trade and other payables (1,093)
Obligations under finance leases (912)
Borrowings (335)
Current tax liabilities (65)
Deferred tax (73)
Net Assets 6,606
Gain on disposal 6,084
Total consideration (net of costs of £ 12,690
695,000)
Less cash disposed of (261)
Net consideration received 12,429
Included in the above result is £585,000 of foreign exchange translation
reserves realised on disposal of the Industrial Products division.
Friday, 17th May 2024
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