Half Yearly Report

RNS Number : 9133F
Carclo plc
17 November 2015
 

Carclo plc

("Carclo" or "the group")

 

Half year results for the six months ended 30 September 2015

 

Increased profitability and continued investment in growth

 

Carclo plc today announces a very good first half performance in its manufacturing divisions, with the group as a whole trading in line with the board's expectations.

 

Financial Highlights

 

 

 

 

 

 

Six months ended

30 September

 2015

Six months ended

30 September

2014

 

 

£000

£000

Revenue

 

 

 

Technical Plastics

 

31,468

29,995

LED Technologies

 

21,172

14,340

Precision Engineering

 

3,063

2,719

CIT Technology

 

1,483

1,742

Total

 

57,186

48,796

 

 

 

 

Operating profit before exceptional items

 

 

Technical Plastics

 

2,523

2,263

LED Technologies

 

2,763

1,679

Precision Engineering

 

632

723

CIT Technology

 

2

(1,028)

Unallocated

 

(1,237)

(1,067)

Total

 

4,683

2,570

 

 

 

 

 

 

 

 

Exceptional items

 

17

(23,499)

 

 

 

 

Operating profit / (loss)

 

4,700

(20,929)

 

 

 

 

Underlying profit before tax

 

4,076

2,265

 

 

 

 

Profit / (loss) before tax

 

4,093

(21,234)

 

 

 

 

Basic earnings per share

 

4.5p

(31.7p)

 

Underlying earnings per share

 

 

 

4.4p

 

2.5p

Net debt

 

27,276

22,428

 

 

 

 

         

 

·       Group revenue increased by 17.2% to £57.2 million (2014 - £48.8 million)

 

·       Operating profit before exceptional items increased by 82.2% to £4.7 million (2014 - £2.6 million), despite the adverse effects of the weaker Euro, with underlying operating margin increasing 290 basis points to 8.2% (2014 - 5.3%)

 

·       Underlying earnings per share increased by 76% to 4.4p (2014 - 2.5p)

 

·       Increased profitability driven by strong performances from the Technical Plastics and LED Technologies divisions

 

·       Interim dividend increased to 0.90p per share

 

·       As anticipated net debt has risen to £27.3 million at the half year (2014 - £22.4 million), due to our continued investment in the group's manufacturing capacity, although this is expected to reduce slightly by financial year end

 

·       The group's balance sheet remains strong and its financing is secure

 

 

Operational Highlights

 

·       In Technical Plastics, our new state of the art facility in Taicang, China is complete and we are finalising the plans for an expansion of our Bangalore, India facility that will double its capacity overall

 

·       In LED Technologies, Wipac has continued to win business from new and existing luxury and supercar lighting customers and it has added a brand new customer group to its portfolio. The division is well placed to deliver good growth this financial year and beyond despite the anticipated delay in our flagship VW luxury car lighting programme due to the announcement that it will be an all-electric vehicle

 

·       At Carclo Diagnostic Solutions we have made good progress in line with our development timeline and have commenced an external healthcare practitioner review to provide additional feedback

 

Commenting on the results, Michael Derbyshire, Chairman said -

 

"The group's two main manufacturing divisions have produced excellent results in the first half of the year showing substantial progress over the comparative period last year.

 

Our strategy to expand the scale and quality of our manufacturing footprint at our existing sites has borne fruit in increased turnover, profitability and improving margins within Technical Plastics and further planned expansions underpin the strong growth prospects for this division.

 

We have continued the investment in the manufacturing capabilities at our Wipac facility and have achieved further programme wins, including from a new targeted customer group, significantly increasing the overall profitability of the division.

 

We have continued to make good technical progress with Carclo Diagnostic Solutions.

 

The board confirms that the group is trading in line with its expectations for the full year and expects the group to have a slightly stronger second half."

 

 

Enquiries

 

 

Carclo plc                                                                                           020 7067 0700 (today)

Chris Malley, Chief Executive                                                               01924 268040 (thereafter)

Robert Brooksbank, Finance Director                                                    

 

Weber Shandwick Financial                                                                 020 7067 0700

Nick Oborne / Tom Jenkins

 

 

A presentation for analysts will be held at 9.00 a.m. on 17 November 2015 at the offices of Weber Shandwick Financial, 2 Waterhouse Square, 140 Holborn, London EC1N 2AE.

 

Notes to editors

 


About Carclo

 

Carclo plc is a public company whose shares are quoted on the London Stock Exchange.

 

Carclo's strategy is to develop and expand its key manufacturing assets where there remain significant further opportunities to drive value. To enhance profit margins the group has been investing in new technologies.

Approximately three fifths of revenues are currently derived from the supply of fine tolerance, injection moulded plastic components, mainly for medical products. The balance of revenue is derived mainly from the design and supply of specialised injection moulded LED based lighting systems to the low volume premium automotive industry.

 

Forward looking statements

 

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events to differ materially from any expected future events or results referred to in these forward looking statements.


 

Group Interim Results

 

Overview                                                                              

 

Overall, Carclo has traded strongly in the first half of the financial year, with good revenue and profit progression in both Technical Plastics and LED Technologies delivering a performance in line with the board's expectations.

 

Group revenues increased by 17.2% to £57.2 million (2014 - £48.8 million). Despite the adverse effects of the weaker Euro, group underlying operating profits of £4.7 million were significantly higher than in the comparative period last year (2014 - £2.6 million). This was driven by excellent performances in Technical Plastics and LED Technologies, with Precision Engineering broadly consistent with the comparative period last year and the CIT business delivering a break even result.

 

Unallocated costs are a little higher than the previous year and there has been an IAS 19 finance charge on the pension deficit of £0.2 million (in 2014 there was a nominal credit). Underlying profit before tax increased to £4.1 million (2014 - £2.3 million).

 

Underlying earnings per share for the six months to 30 September 2015 were 4.4p, an increase of 76.0% on the prior year (2014 - 2.5p). The group generated a profit before tax in the six months to 30 September 2015 of £4.1 million (2014 - loss of £21.2 million due to the CIT write down). Consequently, basic earnings per ordinary share increased to 4.5p (2014 - (31.7p)).

 

As is normal, the group expects a slightly stronger second half due to the phasing of tooling programmes and the usual seasonality of the businesses.

 

Operating review

 

Technical Plastics

 

Technical Plastics reported revenues of £31.5 million (2014 - £30.0 million), an increase of 4.9% on the same period last year. Operating profits, before rationalisation costs, increased by 11.5% to £2.5 million (2014 - £2.3 million).

 

Our strategy of expanding our existing sites and increasing our asset utilisation is showing the improved returns that we have been anticipating. Our underlying operating profit margin increased from 7.5% to 8.0% and a further margin increase is anticipated in the second half of the year as we drive to our target of 10%.

 

Our major new facility at Taicang, China is now complete and pre-production is underway for our multi-year programme for medical component manufacture by an existing, US-based customer. We will complete the relocation of our production assets from Shanghai to Taicang prior to the end of our financial year. Feedback from prospective customers of our Taicang business has been excellent and we remain confident that the Chinese healthcare market will be a major growth driver for our business.

 

Customer demand from both existing and new international clients is underpinning our decision to expand the manufacturing facility at Bangalore, India. We are currently finalising the plans for the expansion which will take place on land we already own, adjacent the current manufacturing unit, and which we expect to be operational during the next financial year.

 

The expanded facility at Latrobe, USA is operating fully now and supporting a mostly medical customer base and we anticipate efficiencies increasing through H2 as new programmes bed down. A new lease has been signed to further increase the manufacturing and warehousing footprint in Brno, Czech Republic as we continue to see opportunities in this region.

 

LED Technologies

 

The group's LED Technologies division consists of the LED Optics business and the Wipac LED based supercar lighting business.

 

Performance in the division during the first half was substantially stronger than in the comparative period last year with turnover increasing significantly by 47.6% to £21.2 million (2014 - £14.3 million) and underlying operating profit increasing by 64.6% to £2.8 million (2014 - £1.7 million). This was driven by a high level of design and development work being performed in the supercar lighting division as a number of projects approach the manufacturing stage. We anticipate that this work will continue to underpin our production revenues over the next few years. In addition we have also secured a flagship vehicle programme for a new major customer and we see significant potential over the next few years to develop this relationship.

 

The investment in the manufacturing capabilities of Wipac's Buckingham site has continued to enable our key customers to be well supported.

 

As reported in our half year trading update on 15 October 2015, the VW Group has announced that its flagship luxury vehicle which was due for launch in 2017 will now be launched as an all-electric vehicle. The full ramifications of this decision on the lighting design have not yet been confirmed but it is expected that this announcement will impact on the timing of anticipated related revenues due to the likely change in vehicle styling. All of our other vehicle lighting programmes are for specialist marques and none of these vehicles are currently subject to any reported, or speculated, concerns around emissions performance. The majority of forecast revenues for the current year and following year are expected to be generated outside of the VW Group and none of our forecast revenue from the VW Group is generated from the higher volume vehicle brands save for the delayed programme.

 

Our LED Optics business remains successful with good first half trading, particularly in the area of custom optics. This business also incorporates the smaller Wipac aftermarket retail businesses and warehousing and added additional warehousing space in Aylesbury in the period. We are now seeing strong growth in LED street lighting optics clusters and have introduced a new product range which we believe will drive further growth in the business.

 

Precision Engineering

 

The aerospace business had a more challenging period in the first half, with sales of £3.1 million (2014 - £2.7 million) and operating profits of £0.6 million (2014 - £0.7 million). This is mainly due to weaker demand impacting the higher margin spares segment order book during the summer.

 

Pleasingly however, order intake increased in the latter part of the period and we have a strong order book as we enter the second half. This business continues to produce strong margins and excellent cash generation.

 

CIT Technology ("CIT")

 

As previously discussed the group agreed a deal to license CIT's fine line technology to UniPixel Displays Inc. ("UniPixel"). The deal means that CIT will receive per annum payments of the greater of US$1.65 million or 1.67% of annual net product sales with an initial non-refundable cash prepayment of US$4.67 million received by CIT at completion earlier in the financial year.

 

This transaction was reflected in the carrying value of the investment in CIT held in the group's books at 31 March 2015. The accounting treatment requires the US$4.67 million prepayment of royalties to be reflected as income with an equivalent impairment of the investment.

 

In addition CIT had entered into a short-term coated film supply agreement with UniPixel with a latest expiry date of 31 October 2015. We can confirm that supply of coated film took place through to October but that it has now ceased and all contractual supply and support obligations ended at that time.

 

The effect of the above has, as expected, resulted in a breakeven position for CIT during this period.

 

Carclo Diagnostic Solutions ("CDS")

 

Carclo Diagnostic Solutions has continued to meet its development timelines. During the period we have been able to generate strong technical data on the performance of our Micropoc platform and this will be shown to potential collaborators at forthcoming medical conferences. We have now commissioned a healthcare practitioner review of the Micropoc platforms and intended applications as part of the board's wider strategy to continually evaluate the strength of the opportunity given our continued investment in this and our other businesses.

 

Financial position

 

As expected, net debt has risen since the year-end to £27.3 million (2014 - £22.4 million) due to the ongoing capital expenditure investment programme and a planned increase in working capital to build stock prior to our factory relocation from Shanghai to Taicang and support the growth in our Wipac luxury and supercar lighting business. The group's balance sheet remains strong and its financing is well within its two main banking covenant limits. The group generated cash from operations of £2.5 million (2014 - £0.2 million) with working capital increasing by £6.4 million (2014 - £4.6 million) due mainly to increased sub-contract tooling balances and higher inventory holdings due to the greater level of activity.

 

Capital expenditure in the six months to 30 September 2015 was £3.2 million (2014 - £3.2 million). This reflected the completion of the major facility expansion at our Technical Plastics facility in Taicang, China and the continued investment in manufacturing capabilities and capacity at Wipac to support the large influx of new technical high end automotive lighting programmes. Investment in new technologies continued with £0.8 million (2014 - £0.4 million) invested in development at CDS.

 

The pension scheme is currently undergoing the March 2015 triennial valuation and it is expected that this process will complete shortly. Since the start of the current financial year, the corporate bond yield, which is used to discount the group pension scheme liabilities, has increased but equity markets have weakened and this, alongside the adoption of more prudent mortality assumptions, has resulted in a pension deficit of £18.7 million as at 30 September 2015 compared to a deficit of £12.1 million at 31 March 2015 under IAS19 "Employee Benefits".

 

 

 

The board has declared an interim dividend of 0.90 pence per ordinary share (2014 - 0.85 pence). The dividend will be paid on 5 April 2016 to shareholders on the register on 4 March 2016. The shares will trade ex-dividend from 3 March 2016.

 

 

Risks and uncertainties

 

In the annual report to shareholders in June 2015 we provided a detailed review of the risks faced by the group and how these risks are managed. We continue to face, and proactively manage, the risks and uncertainties in our business and there has been no significant change in the risks faced by the group.

 

 

Notice of adoption of Financial Reporting Standard ("FRS") 101 - Reduced Disclosure Framework

 

The group's consolidated financial statements will be prepared in accordance with European Union endorsed International Financial Reporting Standards ("IFRSs").

 

In the preparation of the financial statements of its parent company Carclo plc for the period ended 31 March 2016, the group has elected to adopt Financial Reporting Standard 101 ("FRS 101") 'Reduced Disclosure Framework'. FRS 101 allows qualifying entities to adopt IFRSs but with a reduction in the required level of disclosures.

 

Carclo plc is obliged to give shareholders the opportunity to object to the adoption of FRS 101 and the disclosure exemptions therein.

 

Any shareholders wishing to object to the adoption of FRS 101 for the preparation of Carclo plc's parent company accounts, should contact the Company Secretary, Richard Ottaway, in writing by no later than 31 December 2015.

 

Outlook

 

The group's two main manufacturing divisions have produced excellent results in the first half of the year with both Technical Plastics and LED Technologies showing substantial progress over the comparative period last year.

 

Our strategy to expand the scale and quality of our manufacturing footprint at our existing sites has borne fruit in increased turnover, profitability and improving margins within Technical Plastics and further planned expansions underpin the strong growth prospects for this division.

 

We have continued the investment in the manufacturing capabilities at our Wipac facility and have achieved further programme wins, including from a new targeted customer group, significantly increasing the overall profitability of the division.

 

We have continued to make good technical progress with Carclo Diagnostic Solutions.

 

The board confirms that the group is trading in line with its expectations for the full year and expects the group to have a slightly stronger second half.

 

 

Condensed consolidated income statement 

 

 

 

Six months ended

30 September

 2015

unaudited

Six months ended

30 September 2014

 unaudited

 

Year ended    31 March

2015

audited

 

 

 

 

 

 

 

 

Notes

£000

 

£000

 

£000

 

Revenue

 

4

 

57,186

 

 

48,796

 

 

107,503

Underlying operating profit

 

 

 

 

 

 

 

Operating profit before exceptional items

 

4,683

 

2,570

 

7,789

     - rationalisation costs

5

 77

 

 (2,236)

 

(3,351)

     - litigation costs

5

(60)

 

-

 

(111)

     - impairment of CIT Technology

5

-

 

(21,263)

 

(25,371)

     - impairment of Platform Diagnostics

5

-

 

-

 

(2,835)

 

 

 

 

 

 

 

After exceptional items

 

4,700

 

(20,929)

 

(23,879)

 

 

 

 

 

 

 

Operating profit/(loss)

4

4,700

 

(20,929)

 

(23,879)

 

 

 

 

 

 

 

Finance revenue

6

13

 

27

 

64

Finance expense

6

(620)

 

(332)

 

(730)

 

 

 

 

 

 

 

Profit/(loss) before tax

 

4,093

 

(21,234)

 

(24,545)

 

 

 

 

 

 

 

Income tax (expense)/credit

7

(1,146)

 

251

 

1,772

 

 

 

 

 

 

 

Profit/(loss) after tax

2,947

 

(20,983)

 

(22,773)

 

 

 

 

 

 

 

Attributable to -

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

2,957

 

(20,966)

 

(21,942)

Non-controlling interests

 

(10)

 

(17)

 

(831)

 

 

2,947

 

(20,983)

 

(22,773)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per ordinary share

8

 

 

 

 

 

   Basic

 

4.5 p

 

(31.7) p

 

(33.2) p

   Diluted

 

4.5 p

 

(31.7) p

 

(33.2) p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                 

 

 

Condensed consolidated statement of comprehensive income

 

 

Six months ended

30 September

2015

unaudited

Six months ended

30 September

2014

unaudited

 

Year ended

31 March

2015

audited

 

£000

 

£000

 

£000

 

 

 

 

 

 

Profit/(loss) for the period

2,947

 

(20,983)

 

(22,773)

 

 

 

 

 

 

Other comprehensive income -

 

 

 

 

 

 

Items that will not be reclassified to the income statement

 

 

 

 

 

 

 

 

 

 

 

Remeasurement losses on defined benefit scheme

(6,413)

 

(12,093)

 

(13,443)

Deferred tax arising

1,535

 

2,418

 

2,689

 

 

 

 

 

 

Total items that will not be reclassified to the income statement

(4,878)

 

(9,675)

 

(10,754)

 

 

 

 

 

 

Items that are or may in the future be classified to the income statement

 

 

 

 

 

 

 

Foreign exchange translation differences

(1,007)

 

124

 

1,501

 

 

 

 

 

 

Total items that are or may in future be classified to the income statement

(1,007)

 

124

 

1,501

 

 

 

 

 

 

Other comprehensive income, net of income tax

(5,885)

 

(9,551)

 

(9,253)

 

 

 

 

 

 

Total comprehensive income for the period

(2,938)

 

(30,534)

 

(32,026)

 

 

 

 

 

 

Attributable to -

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

(2,928)

 

(30,517)

 

(31,195)

Non-controlling interests

(10)

 

(17)

 

(831)

 

(2,938)

 

(30,534)

 

(32,026)

 

 

 

 

 

 

 

             

 

Condensed consolidated statement of financial position

 

 

 

30 September

2015

unaudited

 

 

30September

2014

unaudited

 

 

31 March

2015

audited

 

Notes

             £000

 

   £000

 

          £000

Assets

 

Intangible assets

10

23,599

 

30,026

 

26,000

Property, plant and equipment

11

32,968

 

29,522

 

31,721

Investments

 

7

 

7

 

7

Deferred tax assets

 

9,219

 

7,065

 

8,337

 

 

 

 

 

 

 

Total non current assets

 

65,793

 

66,620

 

66,065

 

 

 

 

 

 

 

Inventories

 

15,305

 

13,397

 

13,440

Trade and other receivables

 

33,535

 

21,901

 

24,367

Cash and cash deposits

                      

11,111

 

8,779

 

10,855

Non current assets classified as held for sale

12

700

 

1,175

 

700

 

 

 

 

 

 

 

Total current assets

 

60,651

 

45,252

 

49,362

 

 

 

 

 

 

 

Total assets

 

126,444

 

111,872

 

115,427

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Interest bearing loans and borrowings

 

29,523

 

-

 

29,660

Deferred tax liabilities

 

4,768

 

5,598

 

4,768

Retirement benefit obligations

13

18,737

 

11,849

 

12,131

 

 

 

 

 

 

Total non current liabilities

53,028

 

17,447

 

46,559

 

 

 

 

 

 

Trade and other payables

23,799

 

17,672

 

17,219

Current tax liabilities

2,553

 

2,423

 

2,380

Provisions                                                                                                             

1,389

 

755

 

2,203

Interest bearing loans and borrowings

8,864

 

31,207

 

5,713

 

 

 

 

 

 

Total current liabilities

36,605

 

52,057

 

27,515

 

 

 

 

 

 

Total liabilities

89,633

 

69,504

 

74,074

 

 

 

 

 

 

Net assets

36,811

 

42,368

 

41,353

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

    Ordinary share capital issued

18

3,311

 

3,309

 

3,310

    Share premium

 

18

 

21,388

 

    Other reserves

 

2,254

 

3,584

 

2,254

    Translation reserve

 

2,260

 

1,890

 

3,267

   Retained earnings

 

28,978

 

11,383

 

32,522

 

 

 

 

 

 

 

Total equity attributable to equity holders of the parent

36,821

 

41,554

 

41,353

Non-controlling interests

(10)

 

814

 

Total equity

             36,811

 

           42,368

 

           41,353

 

 

 

 

 

 

                     

 


 

Condensed consolidated statement of changes in equity

 

Attributable to equity holders of the company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

Share

Share

Translation

Other

Retained

 

controlling

Total

 

 

capital

premium

reserve

reserves

earnings

Total

interests

Equity

 

£000

£000

£000

£000

£000

£000

£000

£000

 

Current half year period - unaudited

 

 

 

 

 

 

 

 

 

 

Balance at 1 April 2015

3,310

-

3,267

2,254

32,522

41,353

-

41,353

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

2,957

2,957

(10)

2,947

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income -

 

 

 

 

 

 

 

 

 

Foreign exchange translation differences

-

-

(1,007)

-

-

(1,007)

-

(1,007)

 

Remeasurement losses on defined benefit scheme

-

-

-

-

(6,413)

(6,413)

-

(6,413)

 

Taxation on items above

-

-

-

-

1,535

1,535

-

1,535

 

Transactions with owners recorded directly in equity -

 

 

 

 

 

 

 

 

 

Share based payments

-

-

-

-

198

198

-

198

 

Dividends to shareholders

-

-

-

-

(1,821)

(1,821)

-

(1,821)

Exercise of share options

1

18

-

-

-

19

-

19

 

Balance at 30 September 2015

3,311

18

2,260

2,254

28.978

36,821

(10)

36,811

 

 

 

 

 

 

 

 

 

 

 

Prior half year period - unaudited

 

 

 

 

 

 

 

 

 

Balance at 1 April 2014

3,303

21,291

1,766

3,584

43,781

73,725

831

74,556

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

(20,966)

(20,966)

(17)

(20,983)

 

 

 

 

 

 

 

 

 

 

Other comprehensive income -

 

 

 

 

 

 

 

 

 

Foreign exchange translation differences

-

-

124

-

-

124

-

124

 

Remeasurement losses on defined benefit scheme

-

-

-

-

(12,093)

(12,093)

-

(12,093)

 

Taxation on items above

-

-

-

-

2,418

2,418

-

2,418

 

Transactions with owners recorded directly in equity -

 

 

 

 

 

 

 

 

 

Share based payments

-

-

-

-

(5)

(5)

-

(5)

 

Dividends to shareholders

-

-

-

-

(1,752)

(1,752)

-

(1,752)

 

Exercise of share options

6

97

-

-

-

103

-

103

Balance at 30 September 2014

3,309

21,388

1,890

3,584

11,383

41,554

814

42,368

 

 

 

 

 

 

 

 

 

 

 

Prior year period - audited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 April 2014

3,303

21,291

1,766

3,584

43,781

73,725

831

74,556

 

 

 

 

 

 

 

 

 

-

 

Loss for the period

-

-

-

-

(21,942)

(21,942)

(831)

(21,773)

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income -

 

 

 

 

 

 

 

 

 

Foreign exchange translation differences

-

-

1,501

-

-

1,501

-

1,501

 

Remeasurement losses on defined benefit scheme

-

-

-

-

(13,443)

(13,443)

-

 

Taxation on items above

-

-

-

-

2,689

2,689

-

2,689

 

Transactions with owners recorded directly in equity -

 

 

 

 

 

 

 

 

 

Share based payments

-

-

-

-

330

330

-

330

 

Dividends to shareholders

-

-

-

-

(1,752)

(1,752)

-

(1,752)

Exercise of share options

7

97

-

-

-

104

-

104

Capital reduction

-

(21,388)

-

(1,330)

22,718

-

-

-

 

Taxation on items recorded directly in equity

-

-

-

-

141

141

-

141

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 March 2015

3,310

-

3,267

2,254

35,522

41,353

-

41,353

 

                                             

 

Condensed consolidated statement of cash flows

 

 

Six months ended

30 September

2015

unaudited

Six months ended

30 September

2014

unaudited

 

Year ended

31 March

2015

audited

 

Notes

£000

£000

 

£000

           

 

Cash generated from operations

14

2,499

 

162

 

3,549

 

 

 

 

 

 

Interest paid

(377)

 

(288)

 

(650)

Tax paid

(321)

 

(373)

 

(712)

 

 

 

 

 

 

Net cash from operating activities

1,801

 

 

(499)

 

 

2,187

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Proceeds from sale of property, plant and equipment

21

 

37

 

43

Interest received

13

 

23

 

30

Acquisition of property, plant and equipment

 

(3,180)

 

(3,229)

 

(6,543)

Acquisition of intangible assets - computer software

(52)

 

(96)

 

(96)

Development expenditure

(768)

 

(840)

 

(1,346)

 

 

 

 

 

 

Net cash from investing activities

(3,966)

 

(4,105)

 

(7,912)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from exercise of share options

19

 

103

 

103

Drawings on term loan facilities

 

4,500

 

21,674

Repayment of borrowings

 

-

 

(9,633)

Dividends paid

(563)

 

(561)

 

(1,752)

 

 

 

 

 

 

Net cash from financing activities

(544)

 

4,042

 

10,392

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

(2,709)

 

(562)

 

4,667

Cash and cash equivalents at beginning of period

5,142

 

(111)

 

(111)

Effect of exchange rate fluctuations on cash held

(186)

 

110

 

586

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

15

2,247

 

(563)

 

5,142

 

 

 

 

 

 

 

Notes on the accounts

 

 

1.         Basis of preparation

 

Except as outlined below, the condensed consolidated half year report for Carclo plc ("Carclo" or "the group") for the six months ended 30 September 2015 has been prepared on the basis of the accounting policies set out in the audited accounts for the year ended 31 March 2015 and in accordance with the Disclosure and Transparency Rules of the UK Financial Conduct Authority and the requirements of IAS 34 "Interim Financial Reporting" as adopted by the EU.

 

The financial information is unaudited, but has been reviewed by the auditors and their report to the company is set out below.

 

The half year report does not constitute financial statements and does not include all of the information and disclosures required for full annual statements. It should be read in conjunction with the annual report and financial statements for the year ended 31 March 2015 which is available either on request from the company's registered office, Springstone House, PO Box 88, 27 Dewsbury Road, Ossett, WF5 9WS, or can be downloaded from the corporate website - www.carclo-plc.com

 

The comparative figures for the financial year ended 31 March 2015 are not the company's statutory accounts for that financial year.  Those accounts have been reported on by the company's auditors and delivered to the Registrar of Companies.  The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under Section 498 (2) of the Companies Act 2006.

 

The half year report was approved by the board of directors on 17 November 2015 and is being sent to shareholders on 27 November 2015.  Copies are available from the company's registered office and can also be downloaded from the corporate website.

 

The group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). 

 

The group meets its day-to-day working capital requirements through its banking facilities. The group's business activities and financial position, the factors likely to affect its future development and performance, and its objectives and policies in managing financial risks to which it is exposed are disclosed in the group's 2015 Annual Report and Accounts. After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its condensed interim financial statements.

 

2.         Accounting policies

 

The accounting policies, methods of computation and presentation applied by the group in this condensed consolidated half year report are the same as those applied by the group in its annual report and financial statements for the year ended 31 March 2015.

 

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the group's accounting period beginning on or after 1 April 2015.  The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2015:

 

Defined Benefit Plans: Employee Contributions (Amendments to IAS 19).

 

Annual Improvements to IFRSs 2010 - 2012 Cycle

 

Annual Improvements to IFRSs 2011 - 2013 Cycle

 

The above standards are not expected to have a material impact on the Consolidated Financial Statements.

 

IFRS 15 - "Revenue From Contracts With Customers" has been published which will be mandatory for the group's accounting period beginning on or after 1 April 2018. The group is still considering the impact of this standard however it is anticipated the impact on the financial position and performance of the group will not be material. 

 

In addition, the IASB has indicated that it will issue a new standard on accounting for leases. Under the proposals, lessees would be required to recognise assets and liabilities arising from both operating and finance leases on the balance sheet. The IASB also plans to issue a new standard on insurance contracts. The group will consider the financial impacts of this new standard when finalised.

 

3.         Accounting estimates

 

The preparation of the half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. In preparing these half year financial statements, the significant judgements made by management in applying the group's accounting policies and the key source of estimation uncertainty were the same as those applied to the audited consolidated financial statements as at, and for the year ended, 31 March 2015.

 

 

4.         Segment reporting

 

The group is organised into four, separately managed, business segments - Technical Plastics, LED Technologies, Precision Engineering and CIT Technology.  These are the segments for which summarised management information is presented to the group's chief operating decision maker (comprising the main board and group executive committee).

 

The Technical Plastics segment supplies fine tolerance, injection moulded plastic components, which are used in medical, optical and electronics products.  This business operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

 

The LED Technologies segment develops innovative solutions in LED lighting, and is a leader in the development of high power LED lighting for luxury cars and supercars.

 

The Precision Engineering segment supplies systems to the manufacturing and aerospace industries.

 

The CIT Technology segment licenses its applied research into the digital printing of conductive metals onto plastic substrates.

 

The Unallocated segment also includes the group's development companies, Platform Diagnostics Limited and Carclo Diagnostic Solutions, until these companies start to achieve income streams for the group.

 

Transfer pricing between business segments is set on an arm's length basis. Segmental revenues and results include transfers between business segments. Those transfers are eliminated on consolidation.
 

 

The segment results for the six months ended 30 September 2015 were as follows -

 

 

Technical  Plastics

LED

Technologies

Precision Engineering

CIT Technology

Unallocated

Eliminations

Group total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Consolidated income statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

32,243

21,185

3,063

1,483

-

(788)

57,186

Less inter-segment revenue

(775)

(13)

-

-

-

788

-

 

 

 

 

 

 

 

 

Total external revenue

31,468

21,172

3,063

1,483

-

-

57,186

 

 

 

 

 

 

 

 

Expenses

(28,945)

(18,409)

(2,431)

(1,481)

(1,237)

-

(52,503)

 

 

 

 

 

 

 

 

Underlying operating profit

2,523

2,763

632

2

(1,237)

-

4,683

 

 

 

 

 

 

 

 

Exceptional costs

(98)

-

-

175

(60)

-

17

 

 

 

 

 

 

 

 

 Operating profit

2,425

2,763

632

177

(1,297)

-

4,700

 

 

 

 

 

 

 

 

Net finance expense

 

 

 

 

 

 

(607)

Income tax expense

 

 

 

 

 

 

(1,146)

 

 

 

 

 

 

 

 

Profit after tax

 

 

 

 

2,947

 

 

 

 

 

 

 

 

Consolidated statement of financial position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Segment assets

75,547

27,333

6,463

2,220

14,881

-

126,444

 Segment liabilities

(12,984)

(6,713)

(889)

(1,214)

(67,833)

-

(89,633)

 

 

 

 

 

 

 

 

Net assets

62,563

20,620

5,574

1,006

(52,952)

-

36,811

 

 

 

 

 

 

 

 

 

 

The segment results for the six months ended 30 September 2014 were as follows -

 

 

Technical  Plastics

LED

Technologies

Precision Engineering

CIT Technology

Unallocated

Eliminations

Group total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Consolidated income statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

31,005

14,347

2,719

1,742

-

(1,017)

48,796

Less inter-segment revenue

(1,010)

(7)

-

-

-

1,017

-

 

 

 

 

 

 

 

 

Total external revenue

29,995

14,340

2,719

1,742

-

-

48,796

 

 

 

 

 

 

 

 

Expenses

(27,732)

(12,661)

(1,996)

(2,770)

(1,067)

-

(46,226)

 

 

 

 

 

 

 

 

Underlying operating profit

2,263

1,679

723

(1,028)

(1,067)

-

2,570

 

 

 

 

 

 

 

 

Impairment costs

-

-

-

(21,263)

-

-

(21,263)

Reorganisation costs

(2,236)

-

-

-

-

-

(2,236)

 

 

 

 

 

 

 

 

 Operating loss

27

1,679

723

(22,291)

(1,067)

-

(20,929)

 

 

 

 

 

 

 

 

Net finance expense

 

 

 

 

 

 

(305)

Income tax credit

 

 

 

 

 

 

251

 

 

 

 

 

 

 

 

  Loss after tax

 

 

 

 

 

 

(20,983)

 

 

 

 

 

 

 

 

Consolidated statement of financial position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Segment assets

66,632

18,903

6,446

6,514

13,377

-

111,872

   Segment liabilities

(12,714)

(3,996)

(863)

(3,120)

(48,811)

-

(69,504)

 

 

 

 

 

 

 

 

   Net assets

53,918

14,907

5,583

3,394

(35,434)

-

42,368

 

 

 

 

 

 

 

 

 

 

The segment results for the year ended 31 March 2015 were as follows -

 

 

 

Technical  Plastics

LED

Technologies

Precision Engineering

CIT Technology

Unallocated

Eliminations

Group total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Consolidated income statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

65,947

34,074

6,304

2,850

(1,672)

107,503

Less inter-segment revenue

(1,651)

(21)

1,672

 

 

 

 

 

 

 

 

Total external revenue

64,296

34,053

6,304

2,850

107,503

 

 

 

 

 

 

 

 

Expenses

(58,945)

(29,610)

(4,732)

(4,272)

(2,155)

(99,714)

 

 

 

 

 

 

 

 

Underlying operating profit

5,351

4,443

1,572

(1,422)

(2,155)

7,789

 

 

 

 

 

 

 

 

Impairment costs

-

-

(25,371)

(2,835)

(28,206)

Rationalisation costs

(3,351)

-

(3,351)

Litigation costs

-

-

(111)

(111)

 

 

 

 

 

 

 

 

   Operating loss

2,000

4,443

1,572

(26,793)

(5,101)

(23,879)

 

 

 

 

 

 

 

 

   Net finance expense

 

 

 

 

 

 

(666)

   Income tax credit

 

 

 

 

 

 

1,772

 

 

 

 

 

 

 

 

   Loss after tax

 

 

 

 

 

 

(22,773)

 

 

 

 

 

 

 

 

Consolidated statement of financial position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Segment assets

72,325

22,328

6,464

5,701

8,609

-

115,427

   Segment liabilities

(13,008)

(5,147)

(1,175)

(2,318)

(52,426)

-

(74,074)

 

 

 

 

 

 

 

 

   Net assets

59,317

17,181

5,289

3,383

(43,817)

-

41,353

 

 

5.          Exceptional costs

 

 

Six months ended

30 September

2015

Six months ended

30 September

2014

Year ended

31 March

2015

 

            £000

 

   £000

 

         £000

 

 

 

 

 

 

Litigation costs

(60)

 

 

(111)

Rationalisation costs

77

 

(2,236)

 

(3,351)

Impairment review of CIT Technology

 

(21,263)

 

(25,371)

Impairment review of Platform Diagnostics

 

 

(2,835)

Total

17

 

(23,499)

 

(31,668)

 

 

 

 

 

 

             

All rationalisation costs relate to the group's UK operations.

 

Following an impairment review of CIT Technology an impairment of £2.968 million to its intangible assets has been recognised during the six months ended 30 September 2015. In addition income of £2.968 million has been recognised in respect of an agreement to license CIT Technology's fine line technology to UniPixel Inc. for an initial five year period. CIT has also granted a royalty free Intellectual Property License for UniPixel to use CIT's know-how for metal mesh touch screen technology.

 

6.         Net finance expense

 

 

Six months ended

30 September

2015

Six months ended

30 September

2014

Year ended

31 March

2015

 

            £000

 

   £000

 

         £000

 

 

 

 

 

 

Finance revenue

13

 

22

 

30

Finance expense

(427)

 

(332)

 

(730)

Net interest on the net defined benefit obligations

(193)

 

5

 

34

 

 

 

 

 

 

 

(607)

 

(305)

 

(666)

             

 

 

7.         Income tax expense

 

 

Six months ended

30 September

2015

Six months ended

30 September

2014

Year ended

31 March

2015

 

            £000

 

   £000

 

         £000

 

 

 

 

 

 

The charge / (credit) recognised in the condensed consolidated income statement comprises -

 

 

 

 

 

 

 

 

Tax expense arising on ordinary activities

1,142

 

612

 

             1,916

Deferred tax charge / (credit) arising on exceptional items

22

 

(863)

 

(2,928)

Current tax credit arising on exceptional items

(18)

 

 

(760)

 

 

 

 

 

 

Total income tax charge / (credit) recognised in the condensed consolidated income statement

1,146

 

(251)

 

(1,772)

             

 

The half year accounts include a tax charge of 28.0% of profit before tax (2014 - 27.0%) based on the estimated average effective income tax rate on ordinary activities for the full year. The group's effective tax rate on ordinary activities is at a higher level than the underlying UK tax rate of 20.0% (2014 - 21.0%) as the group is earning a higher proportion of its profits in higher tax jurisdictions.

 

During the six months ended 30 September 2015 a £1.535 million credit was recognised in other comprehensive income in respect of deferred tax arising on remeasurement losses on the defined benefit obligations.

 

Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013. In the Budget on 8 July 2015, the Chancellor announced additional planned reductions to 18% by 2020. This will reduce the company's future current tax charge accordingly. The deferred tax asset at 30 September 2015 has been calculated based on the rate of 20% substantively enacted at the balance sheet date.

 

 

8.         Earnings per share

 

The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent divided by the weighted average number of ordinary shares outstanding during the period.

 

The calculation of diluted earnings per share is based on profit attributable to equity holders of the parent divided by the weighted average number of ordinary shares outstanding during the period (adjusted for dilutive options).

 

The following details the profit and average number of shares used in calculating the basic and diluted earnings per share -

 

Six months ended

Six months ended

 

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Profit / (loss) after tax from continuing operations

2,947

 

(20,983)

 

(22,773)

 

 

 

 

 

 

Loss attributable to non-controlling interests

10

 

17

 

831

 

 

 

 

 

 

Profit / (loss) after tax, attributable to equity holders of the parent

2,957

 

(20,966)

 

(21,942)

 

 

 

 

 

 

Six months ended

Six months ended

 

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

Shares

 

Shares

 

Shares

 

 

 

 

 

 

Weighted average number of ordinary shares in issue in the period

66,202,185

 

66,121,147

 

66,153,517

 

 

 

 

 

 

Effect of share options in issue

34,751

 

53,100

 

30,921

 

 

 

 

 

 

Weighted average number of ordinary shares (diluted) in the period

66,236,936

 

66,174,247

 

66,184,438

 

In addition to the above, the company also calculates an earnings per share based on underlying profit as the board believe this to be a better yardstick against which to judge the progress of the group. Underlying profit is defined as profit before impairments, rationalisation costs, one-off retirement benefit effects, exceptional bad debts, business closure costs, litigation costs and the impact of property and business disposals, net of attributable taxes.

 

The following table reconciles the group's profit to underlying profit used in the numerator in calculating underlying earnings per share -

 

 

Six months ended

Six months ended

 

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Profit / (loss) after tax, attributable to equity holders of the parent

2,957

 

(20,966)

 

(21,942)

 

 

 

 

 

 

Rationalisation costs, net of tax

(62)

 

1,940

 

3,100

 

 

 

 

 

 

Litigation costs, net of tax

48

 

-

 

111

 

 

 

 

 

 

Impairment review of CIT Technology, net of tax

-

 

20,696

 

21,933

 

 

 

 

 

 

Impairment review of Platform Diagnostics, net of tax

-

 

-

 

2,035

 

 

 

 

 

 

Underlying profit attributable to equity holders of the parent

2,943

 

1,670

 

5,237

 

 

The following table summarises the earnings per share figures based on the above data -

 

Six months ended

Six months ended

 

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

Pence

 

Pence

 

Pence

 

 

 

 

 

 

Basic

4.5

 

(31.7)

 

(33.2)

 

 

 

 

 

 

Diluted

4.5

 

(31.7)

 

(33.2)

 

 

 

 

 

 

Underlying earnings per share - basic

4.4

 

2.5

 

7.9

 

 

 

 

 

 

Underlying earnings per share - diluted

4.4

 

2.5

 

7.9

 

 

9.         Dividends paid and proposed

 

 Ordinary dividends per 5 pence share paid in the period comprised -

 

Six months ended

Six months ended

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Final dividend for 2013/14 (1.80 pence per share)

-

 

1,192

 

1,189

Interim dividend for 2014/15 (0.85 pence per share)

563

 

-

 

563

Final dividend for 2014/15 (1.90 pence per share)

1,258

 

-

 

-

 

 

 

 

 

 

 

1,821

 

1,192

 

1,752

 

The directors are proposing an interim dividend of 0.90 pence per ordinary share for the half year ended 30 September 2015. The dividend payment totalling £0.596 million will be paid on 5 April 2016 to shareholders on the share register at close of business on 4 March 2016. The proposed interim dividend has not been provided in the half year accounts.

 

10.       Intangible assets

 

The movements in the carrying value of intangible assets are summarised as follows -

 

Six months ended

Six months ended

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Net book value at the start of the period

26,000

 

45,994

 

45,994

 

 

 

 

 

 

Additions

821

 

936

 

1,441

Impairment arising on review of CIT Technology

(2,968)

 

(15,941)

 

(17,825)

Impairment arising on review of Platform Diagnostics

 

 

(2,835)

Amortisation

(79)

 

(715)

 

(799)

Effect of movements in foreign exchange

(175)

 

(248)

 

24

 

 

 

 

 

 

Net book value at the end of the period

23,599

 

30,026

 

26,000

 

Included within intangible assets is goodwill of £18.9 million (2014 - £19.3 million). The carrying value of goodwill is subject to annual impairment tests by reviewing detailed projections of the recoverable amounts from the underlying cash generating units. At 31 March 2015, the carrying value of goodwill was supported by such value in use calculations.  There has been no indication of subsequent impairment in the current financial year.

 

 

11.       Property, plant and equipment

 

The movements in the carrying value of property, plant and equipment are summarised as follows -

 

Six months ended

Six months ended

Year ended

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Net book value at the start of the period

31,721

 

35,657

 

35,657

 

 

 

 

 

 

Additions

3,400

 

3,265

 

6,336

Depreciation

(1,765)

 

(1,974)

 

(3,613)

Disposals

(6)

 

(6)

 

(484)

Impairment arising on Harthill closure

 

(989)

 

(888)

Impairment arising on review of CIT Technology

 

(5,322)

 

(5,584)

Transfer of Harthill property to non current assets held for sale

 

(1,175)

 

(700)

Effect of movements in foreign exchange

(382)

 

66

 

997

 

 

 

 

 

 

Net book value at the end of the period

32,968

 

29,522

 

31,721

 

 

12.      Non current assets classified as held for sale

 

As at

As at

As at

30 September

30 September

 

31 March

 

2015

 

2014

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Surplus land and buildings

700

 

1,175

 

700

 

 

 

 

 

 

Net book value at the end of the period

700

 

1,175

 

700

 

At the period end surplus property with a written down value of £0.700 million (2014 - £1.175 million) has been reclassified as being held for sale. This relates to the properties at the recently closed Harthill site.

 

These properties are being actively marketed with an expectation that they will be sold within the next year.

 

 

13.       Retirement benefit obligations

At 31 March 2015, the group had a retirement benefit liability, as calculated under the provisions of IAS 19  "Employee Benefits", of £12.131 million. Since the start of the current financial year, equity markets have weakened which has resulted in the scheme's assets decreasing in value by £13.504 million to £175.488 million. However, an increase in the discount rate used to evaluate the scheme's liabilities, from 3.2% at the start of the period to 3.7% has contributed to the value of the liabilities decreasing by £6.898 million to £194.225 million. As a consequence the scheme, on an IAS 19 basis, has decreased from a £12.131 million liability at 31 March 2015 to a £18.737 million liability at 30 September 2015.

 

 

14.       Cash generated from operations

 

 

Six months ended

Six months ended

 

Year ended

 

30 September

30 September

 

31 March

 

 

2015

 

2014

 

2015

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Operating profit / (loss)

 

4,700

 

(20,929)

 

(23,879)

 

 

 

 

 

 

 

Adjustments for -

 

 

 

 

 

 

Pension fund contributions in excess of service costs

 

 

 

(1,039)

Depreciation charge

 

1,765

 

1,974

 

3,613

Amortisation of intangible assets

 

79

 

715

 

799

Exceptional tangible fixed asset write down, arising on rationalisation of business

 

 

6,311

 

6,472

Exceptional impairment of intangible assets, arising on rationalisation of business

 

2,968

 

15,941

 

20,660

Provisions (released) / charged in respect of rationalisation

 

(814)

 

755

 

2,203

(Profit) / loss on disposal of other plant and equipment

 

(15)

 

(31)

 

465

Share based payment charge / (credit)

 

198

 

(5)

 

330

 

 

 

 

 

 

 

Operating cash flow before changes in working capital

 

8,881

 

4,731

 

9,624

 

 

 

 

 

 

 

Changes in working capital

 

 

 

 

 

 

 

 

 

 

(Increase) / decrease in inventories

 

(2,039)

 

(45)

 

246

Increase in trade and other receivables

 

(9,474)

 

(807)

 

(2,779)

Increase / (decrease) in trade and other payables

5,131

 

(3,717)

 

(3,542)

 

 

 

 

 

 

 

Cash generated from operations

 

2,499

 

162

 

3,549

               

 

Operating profit for the year includes the receipt of £2.968 million in respect of the royalty fee received from UniPixel Inc. in respect of CIT Technology as detailed in note 5.

 

15.       Cash and cash equivalents

 

 

 

As at

 

As at

 

As at

 

30 September

30 September

 

31 March

 

 

2015

 

2014

 

2015

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Cash and cash deposits

 

11,111

 

8,779

 

10,855

Bank overdrafts

 

(8,864)

 

(9,342)

 

(5,713)

 

 

 

 

 

 

 

 

 

2,247

 

(563)

 

5,142

               

 

 

16.       Net debt

 

The net movement in cash and cash equivalents can be reconciled to the change in net debt in the period as follows -

 

 

Six months ended

Six months ended

 

Year ended

 

30 September

30 September

 

31 March

 

 

2015

 

2014

 

2015

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

(2,709)

 

(562)

 

4,667

Net drawings of term loan borrowings

 

(4,500)

 

(12,041)

 

 

 

 

 

 

 

 

 

(2,709)

 

(5,062)

 

(7,374)

 

 

 

 

 

 

 

Effect of exchange rate fluctuations on net debt

 

(49)

 

314

 

536

 

 

 

 

 

 

 

 

 

(2,758)

 

(4,748)

 

(6,838)

 

 

 

 

 

 

 

Net debt at start of period

 

(24,518)

 

(17,680)

 

(17,680)

 

 

 

 

 

 

 

Net debt at end of period

 

(27,276)

 

(22,428)

 

(24,518)

               

 

 

17.       Financial instruments

 

                The fair values of financial assets and liabilities are not materially different from their carrying value.

 

                There are no material items as required to be disclosed under the fair value hierarchy.

 

 

18.       Ordinary share capital

 

Ordinary shares of 5 pence each -

 

 

 

Number of shares

 

£000

 

 

 

 

 

 

 

Issued and fully paid at 31 March 2014

 

66,054,142

 

3,303

Shares issued on exercise of share options

 

135,000

 

7

 

 

 

 

 

Issued and fully paid at 30 September 2014

 

66,189,142

 

3,310

 

 

 

 

 

Shares issued on exercise of share options

 

-

 

-

 

 

 

 

 

Issued and fully paid at 31 March 2015

 

66,189,142

 

3,310

 

 

 

 

 

Shares issued on exercise of share options

 

24,000

 

1

 

 

 

 

 

Issued and fully paid at 30 September 2015

 

66,213,142

 

3,311

 

 

 

 

 

 

 

               

In the six months ended 30 September 2015, options over 24,000 ordinary shares were exercised at an average exercise price of 80.0 pence per share. The shares are fully paid.

 

 

19.       Related parties

 

Identity of related parties

The group has a related party relationship with its subsidiaries, its directors and executive officers and the group pension schemes.

 

Transactions with key management personnel

Full details of directors' remuneration are disclosed in the group's annual report. In the six months ended 30 September 2015, the directors' remuneration amounted to £0.666 million (2014 - £0.340 million).

 

Group pension scheme

Carclo employs a third party professional firm to administer the group pension scheme. The associated investment costs are borne by the scheme in full. From 1 April 2007, it has been agreed with the trustees of the pension scheme that, under the terms of the recovery plan, Carclo would bear the scheme's administration costs whilst ever the scheme was in deficit, as calculated at the triennial valuation. Carclo incurred an administration cost of £0.377 million which has been charged against other operating expenses (2014 - £0.269 million).

 

 

21.      Post balance sheet events

 

In October 2015, the group injected £1.068 million in cash into the group pension scheme in accordance with the agreed funding plan.

 

 

22.      Seasonality

 

There are no specific seasonal factors which impact on the demand for products and services supplied by the group, other than for the timing of holidays and customer shutdowns. These tend to fall predominantly in the first half of Carclo's financial year and, as a result, revenues and profits are usually higher in the second half of the financial year compared to the first half.

 

 

22.       Responsibility statement

 

We confirm that to the best of our knowledge -

 

•        the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU;

 

•        the interim management report includes a fair review of the information required by -

 

(a)     DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b)     DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

By order of the Board

 

Chris Malley- chief executive

 

Robert Brooksbank - finance director

 

17 November 2015

 


 

Independent review report to Carclo plc

 

 

Introduction

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2015 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

 

Directors' responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. 

As disclosed in note 1 annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU

 

Our responsibility

 

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

 

Johnathan Pass

 

For and on behalf of

 

KPMG LLP

Chartered Accountants

One Sovereign Square

Sovereign Street

Leeds LS1 4DA

17 November 2015

 

 


This information is provided by RNS
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