Interim Results
10 December 2009
API GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2009
* Sales £40.3m, down 20% on last year (25% lower at constant
exchange rates).
* Operating loss before exceptional items £1.0m, compared to £2.0m
profit for the same period last year.
* First half loss before tax on continuing operations £3.3m, after
charging £1.7m financing costs and £0.7m exceptional costs.
* £3.0m benefit from cost saving measures.
* In comparison with the preceding six months, sales declined by 5%
and operating losses almost halved (from £1.9m).
* Group returned to profit at the operating level in the second
quarter.
* Reversal of £3.5m tax provision relating to sale of land in
China.
* Net cash flow from operating activities remained positive at
£0.4m.
* Net debt at £16.1m increased by £1.4m in the six month period,
primarily in China.
* New 3.5 year banking facility concluded with Barclays.
Commenting, API's Chief Executive Andrew Turner said:
"In view of the harsh trading environment faced by the Group, the
reduction in half year losses compared to the preceding six months
highlights the continuing benefit of our efforts to reduce costs.
The return to profit as volumes recovered in the second quarter is an
encouraging sign.
While the general economic outlook remains uncertain, the increase in
sales and business development activity in recent months provides
some evidence that confidence within our customer base is returning."
Enquiries :
API Group plc Numis Securities
Andrew Turner, Chief Executive Nick Westlake, Nomad
Chris Smith, Finance Director James Serjeant, Corporate Broking
01625 650334 020 7260 1000
REPORT ON INTERIM RESULTS
FOR THE SIX MONTH PERIOD ENDED 30 SEPTEMBER 2009
Trading Performance
The Group's trading performance in the half year to 30 September 2009
showed signs of improvement compared to the previous six months
(ending 31 March 2009) as action to reduce costs went some way
towards mitigating the effects of the recessionary trading
environment. While the Group was loss-making for a second successive
half year period, losses at the operating level were almost halved
from the previous six months and the Group as a whole traded
profitably at the operating level in the second quarter.
Group sales for the six months ending 30 September 2009 were £40.3m,
20% lower than the same period last year (£50.5m) and 25% lower at
constant exchange rates. US sales were significantly affected by the
global economic slowdown (30% lower in local currency) while Asia
Pacific and Europe suffered declines of 25% and 20% respectively.
Compared to the previous half year, Group sales were 5% lower.
Within this, second quarter volumes were 9% higher than the first
quarter.
The Group continued with its measures to trim the cost base, with
year on year savings in the six month period amounting to £3.0m.
Results also benefited from favourable exchange rates and lower
average raw material prices.
The reported operating loss, before exceptional items, of £1.0m
compared to a loss in the previous six months of £1.9m and profit of
£2.0m at the interim stage last year. All regions experienced
year-on-year declines in profitability while reduced losses in Asia
Pacific and North America were primarily responsible for the
improvement over the previous six months.
Exceptional costs were £0.7m (2008: £4.1m gain), relating to
workforce rationalisation in Europe and residual relocation project
costs in China.
Net financing costs of £1.7m (2008: £1.3m) comprised interest expense
of £0.8m (2008: £0.9m), UK pension plan interest of £0.6m (2008:
£0.4m), and bank fee amortisation of £0.3m (2008: £0.3m). The prior
year benefited from a £0.3m gain on hedging instruments.
Net profit, after tax, was £0.2m, benefiting from the reversal of a
£3.5m tax provision made at 31 March 2009 in respect of the profit on
disposal of surplus land in China.
The pension deficit, calculated in accordance with IAS19, increased
to £11.1m compared to £7.1m at 31 March 2009. A 16% increase in the
value of scheme assets has been offset by a 21% increase in
liabilities as a result of lower assumptions on discount rates.
Review of Operations
Europe
External sales from European operations were 19% lower than the prior
year at £28.0m (20% lower at constant exchange rates) and 8% lower
than the prior six months. Operating profits, before exceptional
items at £1.2m were significantly down on £3.4m profit at the interim
stage last year but marginally ahead of the preceding six months
(profit of £1.1m).
Year-on-year, turnover in Foils declined by 12%, with growth in the
UK and especially Italy offset by weaker volumes in Germany, France
and security holographics. Laminates sales were 31% lower due to
reduced brand launch activity and packaging demand for premium
consumer products as well as the end of a major promotional project
in the tobacco sector.
Cost reduction measures initiated over the past 18 months contributed
£1.8m in the half year and ensured European operations remained
profitable, including a robust performance in the second quarter.
Margins on UK manufactured products also benefited from favourable
exchange rates.
North America
Reported US sales were 15% lower than the corresponding period last
year but 30% down at constant exchange rates. Compared to last year,
the US business experienced a significant impact from de-stocking and
reduced customer activity across all market sectors. However, with
demand bottoming out in February 2009, interim sales came in 1%
higher than the previous 6 months. Half year operating losses of
£0.3m compared to a profit of £0.4m for the same period last year and
£0.6m loss for the previous six months. The business returned to
profit in the second quarter.
Asia Pacific
Reported sales for Asia Pacific for the six months to September 2009
were 21% lower at £4.2m (2008: £5.4m). At constant exchange rates,
the region experienced a sales decline of 31%, primarily in China.
Regional sales were 3% lower compared to the second half of last year
with some recovery in China and a particularly strong performance in
Australia. Operating losses for the region were £1.2m compared to
£0.9m for the same period last year and a £1.8m loss for the previous
six months. Having halted the deterioration in results in China, the
new management team is focused on increasing sales and utilisation at
the newly built foil manufacturing facility in Shanghai.
Cash Flow and Borrowings
Net cash flow from operating activities, including exceptional items,
was £0.4m (2008: £4.6m). Working capital continued to be managed
tightly throughout the period and capital expenditure at £0.7m was
curtailed as a result of the weaker trading environment.
The Group's net borrowings increased by £1.4m compared to March
2009. Debt in China increased by £1.2m as a result of trading losses
and residual capital expenditure on the relocation project. Net debt
in the US and Europe was substantially unchanged over the six month
period.
At 30 September 2009, the Group's main lending arrangements in the UK
were due for renewal in July 2010. As a result, all borrowings under
these facilities are classified as due within one year. Subsequent
to the balance sheet date, in November 2009, the Group reached
agreement with its main lender, Barclays, to renew the committed
facilities to July 2013. As a result loans to the value of £10.9m
shown as current at 30 September 2009 are now non-current and due in
more than one year.
Pension deficit
The IAS 19 valuation of our UK and US defined benefit schemes has
resulted in a deficit of £11.1m, a £4.0m increase from the deficit of
£7.1m at 31 March 2009. The scheme assets have seen growth of 16%
since 31 March 2009, but the scheme liabilities have increased by
21%. This deterioration is principally due to the reduction in the
discount rate used to determine the value of the Scheme's
liabilities. The discount rate is derived from 'AA' corporate bond
yields which have fallen, reflecting the recovery in bond prices
since the financial turmoil of 2008.
Employees
The Board wishes to express its gratitude to the Group's employees
for their continued support during extremely challenging economic
times. The workforce's flexibility in accommodating measures to
contain and reduce costs is particularly appreciated.
Dividend
The Board is not recommending the payment of an interim dividend
(2008: none)
Outlook
While the general economic outlook remains uncertain, the increase in
sales and business development activity in recent months provides
some evidence that confidence within our customer base is returning.
The Group has made an encouraging start to the second half.
Management is focused on maximising growth opportunities as market
conditions improve and the business is well positioned to benefit
from its lower cost base as sales volumes recover.
GROUP INCOME
STATEMENT
for the six
months ended
30 September
2009
Unaudited Unaudited Audited
6 months to 30 6 months Year
September 2009 to 30 to
September 31 March
2008 2009
Note £'000 £'000 £'000
Continuing
operations
Revenue 1 40,331 50,454 93,451
Cost of sales (32,972) (39,219) (74,780)
Gross profit 7,359 11,235 18,671
Other (8,329) (9,201) (18,577)
operating
costs
Operating 1 (970) 2,034 94
(loss) /
profit before
exceptional
items
Exceptional 3 (690) 4,052 4,699
items
Operating (1,660) 6,086 4,793
(loss) /
profit from
continuing
operations
Finance 4 276 310
revenue -
Finance costs 4 (1,668) (1,610) (2,875)
(1,668) (1,334) (2,565)
(Loss) / (3,328) 4,752 2,228
profit on
continuing
activities
before
taxation
Tax credit / 5 3,558 (1,628) (4,314)
(expense)
Profit/ 230 3,124 (2,086)
(loss) from
continuing
operations
Discontinued
operations
Loss from 6 (293) (1,298)
discontinued -
operations
Profit / 230 2,831 (3,384)
(loss) for
the period
(Loss) / (811) 1,920 (3,861)
profit
attributable
to equity
holders of
the parent
Profit 5 1,041 911 477
attributable
to minority
equity
interest
Profit / 230 2,831 (3,384)
(loss) for
the period
Earnings per
share (pence)
Basic (loss) 7 (1.2) 3.2 (3.7)
/ earnings
per share
from
continuing
operations
Diluted 7 (1.2) 3.1 (3.7)
(loss) /
earnings per
share from
continuing
operations
Basic (loss) 7 (1.2) 2.8 (5.5)
/ earnings
per share on
profit /
(loss) for
the period
Diluted 7 (1.2) 2.7 (5.5)
(loss) /
earnings per
share on
profit /
(loss) for
the period
GROUP STATEMENT OF COMPREHENSIVE
INCOME
for the six months ended 30
September 2009
Unaudited Unaudited Audited
6 months to 6 months to Year
30 30 to
September September 31 March
2009 2008 2009
£'000 £'000 £'000
Profit / (loss)
for the period 230 2,831 (3,384)
Exchange
differences on
retranslation
of foreign
operations (1,870) 1,916 5,973
Change in fair value
of effective cash
flow hedge (interest
rate swap) 120 (130) (360)
Actuarial gains
on defined
benefit pension
plans (3,968) 122 (3,925)
Movement in deferred
tax asset relating
to defined benefit
pension plans 1,111 (34) 1,099
Other
comprehensive
(loss) / income
for the period (4,607) 1,874 2,787
Total
comprehensive
(loss)/income
for the period,
net of tax (4,377) 4,705 (597)
Attributable
to:
Equity holders
of the parent (4,663) 2,915 (3,367)
Minority equity
interest 286 1,790 2,770
(4,377) 4,705 (597)
GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2009
Equity Foreign Total
share Share Other exchange Retained shareholders'
capital premium reserves reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1
April 2008 8,998 7,136 298 (188) 5,568 21,812
Total
recognised
income and
expense for
the period - - - 1,037 1,878 2,915
Share based
payments - - - - (26) (26)
Balance at
30 September
2008 8,998 7,136 298 849 7,420 24,701
Total
recognised
income and
expense for
the period - - - 2,643 (8,925) (6,282)
Buy back of
deferred
shares (8,297) - 8,297 - - -
Share based
payments - - - - (21) (21)
Balance at
31 March
2009 701 7,136 8,595 3,492 (1,526) 18,398
Total
recognised
income and
expense for
the period - - - (1,115) (3,548) (4,663)
Share based
payments - - - - 12 12
Balance at
30 September
2009 701 7,136 8,595 2,377 (5,062) 13,747
GROUP BALANCE SHEET
at 30 September 2009
Unaudited Unaudited Audited
30 September 2009 30 September 31
2008 March 2009
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and 33,969 32,990 38,342
equipment
Intangible assets - 5,188 6,480 5,188
goodwill
Trade and other 176 - 209
receivables
Deferred tax assets 3,419 1,807 2,318
42,752 41,277 46,057
Current assets
Trade and other 13,728 19,466 14,492
receivables
Inventories 11,008 11,687 12,699
Other financial assets - 57 -
- forward currency
hedging contracts
Cash and short-term 1,387 2,753 2,234
deposits
26,123 33,963 29,425
Total assets 68,875 75,240 75,482
Liabilities
Current liabilities
Trade and other 17,530 19,397 20,368
payables
Financial liabilities 9 17,721 5,026 5,747
Income tax payable 372 1,877 4,259
Provisions - 27 -
35,623 26,327 30,374
Non-current
liabilities
Financial liabilities 9 - 13,031 11,539
Deferred tax 256 256 256
liabilities
Provisions 57 65 61
Deficit on defined 10 11,133 3,184 7,081
benefit pension plans
11,446 16,536 18,937
Total liabilities 47,069 42,863 49,311
Net assets 21,806 32,377 26,171
Equity
Called up share 701 8,998 701
capital
Share premium 7,136 7,136 7,136
Other reserves 8,595 298 8,595
Foreign exchange 2,377 849 3,492
reserve
Retained earnings (5,062) 7,419 (1,526)
API Group 13,747 24,700 18,398
shareholders' equity
Minority interest 8,059 7,677 7,773
Total equity 21,806 32,377 26,171
GROUP CASH FLOW STATEMENT
for the six months ended 30 September 2009
Unaudited Unaudited Audited
6 months to 6 months to Year
30 30 to
September September 31 March
2009 2008 2009
Note £'000 £'000 £'000
Operating
activities
Group operating (1,660) 6,086 4,793
profit / (loss)
Adjustments to
reconcile group
operating profit /
(loss) to net cash
flow from operating
activities:
Depreciation of 1,975 1,850 3,905
property, plant and
equipment
Impairment of - - 1,292
goodwill
Loss / (profit) on 19 (4,083) (7,780)
disposal of
property, plant and
equipment
Movement in foreign 42 - -
exchange hedging
contracts
Share-based 12 (26) (47)
payments
Difference between (174) (458) (1,021)
pension
contributions paid
and amounts
recognised in the
income statement
Decrease in 1,157 713 1,310
inventories
Decrease in trade 285 268 5,224
and other
receivables
Increase / (1,280) 657 (731)
(decrease) in trade
and other payables
Movement in (4) (61) (92)
provisions
Cash generated from 372 4,946 6,853
operations
Income taxes 61 (377) (405)
recovered / (paid)
Net cash flow from 433 4,569 6,448
operating
activities
Investing
activities
Interest received - - 35
Purchase of (696) (2,311) (4,110)
property, plant and
equipment
Sale of property, 24 3,320 8,706
plant and equipment
Payment of legal costs (281) (232) (1,171)
in respect of
discontinued operations
Net cash flow from (953) 777 3,460
investing
activities
Financing
activities
Interest paid (849) (1,772) (2,512)
Dividends paid to (434) - (620)
minority interests
New borrowings 1,124 - 1,693
Repayment of (768) (2,297) (9,594)
borrowings
Net cash flow from (927) (4,069) (11,033)
financing
activities
Increase / (1,447) 1,277 (1,125)
(decrease) in cash
and cash
equivalents
Effect of exchange (93) 112 261
rates on cash and
cash equivalents
Cash and cash 151 1,015 1,015
equivalents at the
beginning of the
period
Cash and cash 8 (1,389) 2,404 151
equivalents at the
end of the period
NOTES TO THE INTERIM
FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Corporate information
The consolidated interim financial statements of API Group plc for
the six months ended 30 September 2009 were authorised for issue in
accordance with a resolution of the directors on 9 December 2009.
API Group plc is a public limited company incorporated and domiciled
in England and Wales. The Company's shares are traded on the
Alternative Investment Market of the London Stock Exchange.
The principal activities of the Group are the manufacture and
distribution of specialty foils and laminated materials.
Basis of preparation
The interim consolidated financial statements of the Group for the
six months ended 30 September 2009 have been prepared in accordance
with IAS 34 Interim Financial Reporting.
These interim consolidated financial statements are unaudited. They
do not constitute statutory accounts as defined in section 240 of
the Companies Act 1985 and therefore do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's latest
annual financial statements as at 31 March 2009 which were prepared
in accordance with International Financial Reporting Standards as
adopted by the EU. The audited annual financial statements for the
year ended 31 March 2009, which represent the statutory accounts for
that period, and on which the auditors gave an unqualified opinion,
have been filed with the Registrar of Companies.
The Directors consider that after making appropriate enquiries that
there is reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future and therefore continue to adopt the going concern basis in
preparing these financial statements.
Significant accounting
policies
The accounting policies adopted in the preparation of the interim
consolidated financial statements are consistent with those followed
in the preparation of the Group's annual financial statements for
the year ended 31 March 2009, except for the adoption of new
Standards and Interpretations as of 1 January 2009 noted below.
IAS 1 Revised Presentation of
Financial Statements
The revised Standard separates owner and non-owner changes in
equity. The Statement of Changes in Equity includes only details of
transactions with owners, with non-owner changes in equity shown as
a single line. In addition, the Standard introduces the Statement
of Comprehensive Income. It presents all items of recognised income
and expense, either in one statement, or as two linked statements.
The Group has elected to present two statements.
IFRS 8 Operating Segments
This Standard requires disclosure of information about the Group's
operating segments and replaces the requirement to determine primary
and secondary reporting segments of the Group. Adoption of this
Standard does not have any effect on the financial position or
performance of the Group. The Group has determined that the
operating segments are the same as primary segments previously
identified under IAS 14 Segmental Reporting. Summary segmental
information is presented in Note 2.
Improvements to IFRS
In May 2008 the IASB issued an omnibus of amendments to its
Standards, primarily with a view to removing inconsistencies and
clarifying wording. There are separate transitional provisions for
each Standard. The adoption of the relevant amendments to these
Standards does not have any effect on the accounting policies,
financial position or performance with the Group.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued)
2. SEGMENTAL
INFORMATION
For management purposes, the Group is organised into three distinct
independently managed geographic segments, Europe, North America and
Asia Pacific. The following table presents revenue and profit
information for these segments. Segment performance is evaluated on
earnings before central costs, exceptional items and financing costs.
Unaudited Unaudited Audited
6 months to 6 months to Year
30 30 to
September September 31 March
2009 2008 2009
£'000 £'000 £'000
Continuing Continuing Continuing
Total revenue by
region
Europe 28,031 36,092 65,437
North America 9,752 11,502 21,855
Asia Pacific 4,227 5,372 9,399
42,010 52,966 96,691
Inter-segmental
sales
Europe 1,103 1,349 1,646
North America 213 495 852
Asia Pacific 363 668 742
1,679 2,512 3,240
External sales by
region
Europe 26,928 34,743 63,791
North America 9,539 11,007 21,003
Asia Pacific 3,864 4,704 8,657
40,331 50,454 93,451
Profit / (loss)
from operations
Europe 1,177 3,402 4,525
North America (278) 352 (276)
Asia Pacific (1,203) (859) (2,612)
Segment (loss) /
profit (304) 2,895 1,637
Central costs (666) (861) (1,543)
Total (loss) / profit
from operations before
exceptional items (970) 2,034 94
Exceptional items (690) 4,052 4,699
Operating (loss) /
profit from continuing
operations (1,660) 6,086 4,793
Net finance costs (1,668) (1,334) (2,565)
(Loss) / profit before
tax from continuing
operations (3,328) 4,752 2,228
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued)
3. EXCEPTIONAL
ITEMS
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to 30 to
September September 31 March
2009 2008 2009
£'000 £'000 £'000
Exceptional items charged against
operating (loss) / profit comprise
Relocation of (267) 4,133 6,537
China factory
Impairment of - - (1,292)
goodwill
Restructuring of
operating (423) (81) (546)
businesses
(690) 4,052 4,699
Exceptional items are material items which derive from events or
transactions that fall within the ordinary activities of the Group
and which need to be disclosed by virtue of their size or incidence.
Relocation of
China factory
The charge in respect of the current year comprises residual
reorganisation costs relating to the factory relocation project. The
comparative figures relate to the net revenue impact of the project
to relocate to a new factory location in Shanghai. The net gain for
the year to 31 March 2009 was the result of a gain of £7,827,000 on
the land sale net of relocation and restructuring costs of £1,290,000
associated with the move.
Impairment of
goodwill
In the year to 31 March 2009, goodwill arising in the China business
was impaired.
Restructuring of
operating
businesses
This relates largely to redundancy and other costs associated with
business restructuring, primarily within the UK businesses.
4. FINANCE REVENUE AND FINANCE
COSTS
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to 30 to
September September 31 March
2009 2008 2009
£'000 £'000 £'000
Finance revenue
Interest
receivable on
bank and other
short term
deposits - - 35
Gains arising on
forward foreign
currency
contracts - 31 30
Gain on interest
rate swap - 245 245
- 276 310
Finance costs
Interest payable
on bank loans and
overdrafts (1,093) (1,208) (2,011)
Other interest
payable - - (138)
Finance cost in
respect of
defined benefit
pension plans (575) (402) (726)
(1,668) (1,610) (2,875)
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued)
5. TAXATION
Unaudited Unaudited Audited
6 months 6 months Year
to to 30 to
30 September 31 March
September 2008 2009
2009
£'000 £'000 £'000
Current income
tax
UK Corporation
tax (prior-year) 46 - -
Overseas tax -
current year
charge (53) (1,508) (3,442)
- reversal of
prior-year tax
charge 3,520 - 136
Total current
income tax credit
/ (charge) 3,513 (1,508) (3,306)
Deferred tax
Origination and
reversal of
temporary
differences 45 (120) (1,008)
Total deferred
tax 45 (120) (1,008)
Total credit /
(charge) in the
income statement 3,558 (1,628) (4,314)
The reversal of prior-year overseas tax charge relates to China. In
the year to 31 March 2009, a provision of Rmb 38m was made for a
specific land tax in respect of the profit on sale of surplus
property in Shanghai after the relocation of operations to a new
site. During the 6 months to 30 September 2009, documentation has
been received from the Chinese authorities which indicates that no
specific land taxation is expected to be payable in respect of this
transaction. Accordingly, the provision has been released.
The profit attributable to minority interest of £1,041,000 includes
an amount of £1,725,000 which relates to the reversal of the
prior-year tax charge as detailed above.
6. DISCONTINUED
OPERATIONS
The loss on disposal of discontinued operations in prior periods
related entirely to legal fees incurred in defending a claim for
breach of warranties in connection with a business disposal made by
the Group in 2005. The claim was settled in March 2009.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued)
7. EARNINGS PER
SHARE
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to 30 to
September September 31 March
2009 2008 2009
£'000 £'000 £'000
Net (loss) / profit
attributable to equity
holders of the parent (811) 2,213 (2,563)
company - continuing
operations
Loss attributable to
equity holders of the - (293) (1,298)
parent company -
discontinued operations
Net (loss) / profit
attributable to equity (811) 1,920 (3,861)
holders of the parent
company
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to 30 to
September September 31 March
2009 2008 2009
No No No
Basic weighted average 70,068,505 70,068,505 70,068,505
number of ordinary
shares
Dilutive effect of - 1,705,750 -
employee share
options
Diluted weighted 70,068,505 71,774,255 70,068,505
average number of
ordinary shares
The weighted average number of shares excludes the shares owned by
the API Group plc No.2 Employee Benefit Trust (58,221 ; 2008:
58,221).
As any dilution would have the effect of reducing the loss per share,
the diluted weighted average number of shares is equivalent to the
basic weighted average number of shares for the reported period and
for the full year to 31 March 2009.
Unaudited Unaudited Audited
6 months 6 months Year
to 30 to 30 to
September September 31 March
2009 2008 2009
Earnings per share pence pence pence
Continuing
operations
Basic earnings / (1.2) 3.2 (3.7)
(loss) per share
Diluted earnings / (1.2) 3.1 (3.7)
(loss) per share
Discontinued
operations
Basic earnings / - (0.4) (1.8)
(loss) per share
Diluted earnings / - (0.4) (1.8)
(loss) per share
Total
Basic earnings / (1.2) 2.8 (5.5)
(loss) per share
Diluted earnings / (1.2) 2.7 (5.5)
(loss) per share
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued)
8. CASH AND CASH
EQUIVALENTS
Unaudited Unaudited Audited
30 September 30 31
2009 September March
2008 2009
£'000 £'000 £'000
Cash and
short-term
deposits 1,387 2,753 2,234
Bank overdrafts (2,776) (349) (2,083)
(1,389) 2,404 151
9. FINANCIAL
LIABILITIES
Unaudited Unaudited Audited
30 September 30 31
2009 September March
2008 2009
£'000 £'000 £'000
Current
Bank overdrafts 2,776 349 2,083
Current
instalments on
bank loans 14,663 4,562 3,394
Forward currency
hedging contracts 42 44 -
Interest rate swap 240 71 270
17,721 5,026 5,747
Non-current
Non-current
instalments due on
bank loans - 12,972 11,449
Interest rate swap - 59 90
- 13,031 11,539
Following the renegotiation of the Group's main bank facilities in
November 2009, £10.9m of the reported current instalments of £14.7m
would now be classified as non-current.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (continued)
10. DEFINED BENEFIT PENSION PLAN DEFICIT
The Group operates two defined benefit schemes, the API Group Pension
and Life Assurance Scheme in the UK and the API Foils Inc North
American Pension Plan in the US. Both of these schemes are closed to
future accrual. The assets and liabilities of the defined benefit
schemes are:
Unaudited Unaudited Audited
30 September 30 31
2009 September March
2008 2009
£'000 £'000 £'000
United Kingdom
Fair value of
scheme assets 64,493 60,611 55,312
Present value of
scheme liabilities (74,786) (63,622) (61,630)
(10,293) (3,011) (6,318)
United States
Fair value of
scheme assets 1,564 1,627 1,447
Present value of
scheme liabilities (2,404) (1,800) (2,210)
(840) (173) (763)
Net pension
liability (11,133) (3,184) (7,081)
The movements in
the net pension
liability are as
follows:
Opening liability 7,081 3,482 3,482
Net cost recognised
in arriving at
operating profit - 263 228
Net cost recognised
in finance costs 575 402 726
Taken to Statement
of Comprehensive
Income 3,968 (122) 3,925
Contributions from
and scheme expenses
borne by employers (413) (859) (1,431)
Exchange
differences (78) 18 151
Closing liability 11,133 3,184 7,081
The main assumptions used in valuing the present value of the scheme
liabilities in the UK are as follows:
Rate of increases in
pensions in payment and
deferred pensions 2.75% 3.20% 2.60%
Inflation 2.95% 3.40% 2.80%
Discount rate 5.70% 6.80% 6.85%
---END OF MESSAGE---
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