Final Results
Chamberlin & Hill PLC
15 June 2006
CHAMBERLIN & HILL plc
PRELIMINARY ANNOUNCEMENT OF RESULTS 2006
Chamberlin & Hill plc announces its audited results for the year ended 31 March
2006:
Financial highlights
• Operating profit before exceptional items up 15.8% to £2.4m
• Underlying earnings per share up 18.6% to 21.5p
• Dividend maintained at 11.85p for the year
• Dividend cover on underlying earnings increased from 1.5 to 1.8 times
• Total equity strengthened by £1.6m to £13.5m
• Pension deficit reduced by £2.8m to £0.5m
Year to Year to
31 March 31 March
2006 2005
£000 £000
Turnover 41,435 41,970
Operating profit before exceptional items 2,398 2,071
Profit before taxation 2,368 2,192
Basic earnings per share 22.5p 20.9p
Underlying earnings per share 21.5p 18.1p
Dividends per share (paid and proposed) 11.85p 11.85p
Chamberlin & Hill plc
Tom Brown, Chairman 01922 721411
Barrie Williams, CEO
Chairman's Statement
I am pleased to report that on turnover broadly in line with the previous year
at £41.44m (2005: £41.97m) operating profit before exceptional items increased
15.8% to £2.40m (2005: £2.07m), and pre-tax profit before exceptional items was
up 19.2% at £2.26m (2005: £1.90m). As at the interim, the results are presented
under International Financial Reporting Standards ('IFRS') which have affected
both the content and presentation of these and the comparative 2005 figures.
Reconciliations to previously reported results were provided in the Interim
Report for the six months to 30 September 2005.
Fully diluted underlying earnings per share rose 18.6% to 21.5p (2005: 18.1p).
The Board is recommending an unchanged final dividend of 8.0p per share (11.85p
total for the year) payable on 28 July 2006 to shareholders on the register at
the close of business on 7 July 2006. Dividend cover has now been restored to
1.8 times, based on underlying earnings.
In the Interim Report we announced our intention to close the Bloxwich foundry.
This activity was undertaken speedily and effectively, and while it was
responsible for most of the exceptional restructuring costs reported of £0.93m
this was more than offset by an exceptional gain of £1.03m on the sale of the
site.
The Interim Report also stated that we were examining ways to mitigate the
deficit in our final salary pension scheme, and following the sale of the
Bloxwich site the group made a payment of £1.50m into the Chamberlin & Hill
Staff Pension Scheme. This, together with favourable investment returns,
reduced the Group's defined benefit pension scheme deficit to £0.49m (2005:
£3.32m) at the year end.
The Group's balance sheet remains very strong with net cash at the year end of
£0.59m (2005: net debt of £0.04m) after capital expenditure of £1.44m. The
equity attributable to shareholders at 31 March 2006 rose to £13.54m (2005:
£11.94m).
The Group's net operating margins rose to 5.8% compared to 4.9% previously. The
substantial increases in the prices of ferrous metals and metallurgical coke
endured in the previous year subsided somewhat, although large increases in the
prices paid for electricity and gas from last autumn again put margins under
pressure until fully recovered from customers.
Having completed the first part of our foundry integration programme with the
closure of Bloxwich and the relocation of its workload elsewhere in the Group,
we anticipate improved margins for grey iron castings in the year ahead. We
have now embarked on the redevelopment of our Scunthorpe foundry where we intend
to relocate the business currently in Leicester by 2008, and believe that the
merger of Russell Castings and Ductile Castings will provide further
opportunities for margin enhancement.
In our Engineering Division advances were made in redefining our market
opportunities, offshore sourcing and new product development, but the overall
result did not reflect the progress made in the Foundry Division. Since the year
end a reorganisation has been implemented in Fred Duncombe, aimed at better
exploiting that company's opportunities.
Barrie Williams will stand down as Chief Executive following the Annual General
Meeting on 28 July, in preparation for his retirement in September. Barrie
joined Chamberlin & Hill in 1965, becoming a Director in 1976 and Chief
Executive in 1995. During this period he has made an outstanding contribution to
the Group, and on behalf of the Board I would like to record our sincere thanks
to him and to wish him a long and happy retirement. I should also like to thank
him personally for the support he has given me since I became Chairman.
As we announced on 20 March 2006, I am delighted to welcome Tim Hair to the
Board as Chief Executive Designate and look forward to working with him to build
further on the sound business left by Barrie.
Current activity levels at our Walsall Foundry are much improved and elsewhere
markets appear to be running at or around predicted levels. Current trading is
in line with our expectations. If this situation is maintained we anticipate
another year of progress and will continue to seek new and relevant
opportunities to further enhance earnings.
Tom Brown
Chairman
15 June 2006
Chief Executive's Review
At this time last year I commented that the focus for the year ahead was to
improve our margins. It is pleasing now to report that some progress was made
in the year with the return on sales improving from 4.9% to 5.8% on turnover
broadly in line with the previous year. The scope of the improvement was held
back for two reasons. Firstly the large rise in energy costs where we were
particularly affected by increases in gas and electricity prices. Increased
costs always have a time lag before recovery, and affect margins accordingly.
The second element was that we saw a reduction in demand during the winter
months. This has now largely recovered, and we will be seeking to make further
progress with margins in the year ahead.
To achieve this we continue to invest in process improvement, to increase
productivity and energy efficiency, and in new product development and
environmental improvement. In the year just ended capital expenditure was
£1.44m. Our success in improving our efficiencies can be seen in the sales per
head ratio, which has improved by some 45% in a 10 year period.
Foundries
Bloxwich Foundry ceased production at the end of January, and the sale of the
site was completed in March. From 1 April 2006, the Light Castings Division is
now based in Walsall trading as Chamberlin & Hill Castings Limited, the business
and assets having been hived down from Chamberlin & Hill plc on 31 March 2006.
The transfer of the grey iron parts from Bloxwich to Walsall was achieved
speedily and efficiently as was the commissioning of the 2013 Disamatic moulding
machine. For the Light Division in the year turnover fell by 9% while the
return on sales improved by 1.5% despite the inevitable disruption involved in
the transfer of plant and equipment.
Following the rationalisation to one site we look forward to further improvement
in net margins in the year ahead. Current levels of activity in the automotive
sector have recovered from the dip seen earlier in the year. We continue to see
growth opportunities in our market for turbocharger castings for diesel engines,
particularly for those associated with improved emission levels. Opportunities
taken following the recent closure of competitors have led to increased output
levels over recent weeks. Given reasonable stability in material and energy
prices we expect Walsall to continue to perform well in the year ahead.
In preparation for consolidation of the Heavy Castings Division onto one site in
Scunthorpe, Russell Castings acquired the business and assets of Ductile
Castings and its name was changed to Russell Ductile Castings Limited from 1
April 2006. Turnover in 2005/06 was broadly in line with the previous year,
while the return on sales improved by 1.5%. The hand-mould section was
transferred from Leicester to Scunthorpe at the year end. Activity levels,
which fell back during the winter months, are slowly improving as a major sales
campaign to raise turnover in the division begins to bear fruit. As in the
Light Castings Division, the volatility of raw materials and energy costs
remains the greatest threat to performance.
During the year plans have been developed and property acquired to extend the
Scunthorpe site in order to complete the integration of the business from
Leicester in 2008. Foundry investment will therefore be largely concentrated at
Scunthorpe in the next two years. In the year to 31 March 2007 we will be
investing in the site infrastructure and services, and the construction of a new
melting facility.
Engineering
Production value fell slightly in our engineering businesses to £7.8m (2005:
£8.0m) and the return on sales fell back some 1.6%, the reduction being
consistent both in our lighting business, PFP Electrical Products, and at Fred
Duncombe ('FD'). Price competition and lower gross margins at PFP and higher
fixed costs at FD were responsible, the latter as a result of increasing our
sales personnel. In both businesses we are developing off-shore sourcing of
both parts and products in order to remain a low cost supplier to our markets.
We are looking this year for increased sales from new products and improved
margin. Our priority is to ensure that we respond quickly to changing customer
needs to maintain our market positions.
The Future
The past year has seen good progress with our programme of foundry
rationalisation. Our aim now is to develop our foundry in Scunthorpe into a
modern and efficient facility that will meet the market needs for heavy iron
castings for years to come. We also look for the benefit of the work already
completed at Walsall to show through.
In engineering we will seek to make more rapid progress in the reduction of our
cost base and to increase sales from our new product ranges.
As always, our people remain our most important asset. We will endeavour to
continue developing their skills, recruiting where necessary to strengthen our
excellent team. In this regard I welcome our new Chief Executive Designate, Tim
Hair, who will take over from me following the Annual General Meeting in July.
I am quite sure that Tim will take the company forward for all its stakeholders.
After 41 years with the company and 12 years as Chief Executive, I would like to
record my sincere thanks to my board colleagues and all our employees, past and
present, who have given so much support both to Chamberlin & Hill and to me
personally. I look forward with pleasure to seeing further progress in the
years to come.
Barrie Williams
Chief Executive
Consolidated Income Statement
for the year ended 31 March 2006
2006 2005
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
£000 £000 £000 £000 £000 £000
Revenue 41,435 - 41,435 41,970 - 41,970
Cost of sales (33,515) - (33,515) (34,831) - (34,831)
Gross profit 7,920 - 7,920 7,139 - 7,139
Other operating (5,522) 104 (5,418) (5,068) 292 (4,776)
expenses
Operating profit 2,398 104 2,502 2,071 292 2,363
from continuing
operations
Finance revenue 1 - 1 10 - 10
Finance costs (135) - (135) (181) - (181)
Profit from continuing 2,264 104 2,368 1,900 292 2,192
operations before tax
Tax expense (679) (31) (710) (570) (88) (658)
Profit for the year 1,585 73 1,658 1,330 204 1,534
from continuing
operations
Earnings per share
basic 22.5p 20.9p
underlying 21.5p 18.1p
diluted 22.4p 20.9p
diluted 21.5p 18.1p
underlying
Consolidated Statement of Recognised Income and Expense
for the year ended 31 March 2006
2006 2005
£000 £000
Actuarial gains/(losses) on pension assets and 1,141 (312)
liabilities
Deferred tax on actuarial gains/(losses) (342) 94
Net income/(expense) recognised directly in equity 799 (218)
Profit for the year 1,658 1,534
Total recognised income and expense for the year
attributable to equity holders of the parent company 2,457 1,316
Parent Company Statement of Recognised Income and Expense
in the year ended 31 March 2006
2006 2005
£000 £000
Actual gains/(losses) on pension assets and liabilities 1,141 (312)
Deferred tax on actuarial gains/(losses) (342) 94
Net income/(expense) recognised directly in equity 799 (218)
Profit for the year 42 (126)
Total recognised income and expense for the year
attributable to equity holders of the parent company 841 (344)
Consolidated Balance Sheet
at 31 March 2006
31 March 31 March
2006 2005
£000 £000
Non-current assets
Property, plant and equipment 8,206 8,990
Intangible assets 483 253
Deferred tax assets 497 1,047
9,186 10,290
Current assets
Inventories 5,308 5,055
Trade and other receivables 7,942 9,325
Cash and cash equivalents 593 1
13,843 14,381
Total assets 23,029 24,671
Capital and reserves
Called up share capital 1,840 1,840
Share premium account 743 743
Capital redemption reserve 109 109
Retained earnings 10,850 9,246
Total equity 13,542 11,938
Current liabilities
Financial liabilities - 43
Trade and other payables 7,501 7,550
Income taxes payable 237 638
7,738 8,231
Non current liabilities
Deferred tax 1,262 1,182
Defined benefit pension scheme 487 3,320
deficit
1,749 4,502
Total equity and liabilities 23,029 24,671
Barrie Williams )
) Directors
Simon Duckworth )
The accounts were approved by the Board of Directors on 15 June 2006
Parent Company Balance Sheet
at 31 March 2006
31 March 31 March
2006 2005
£000 £000
Non current assets
Property, plant and equipment 1,085 4,642
Intangible assets 10 19
Investments 7,159 7,159
Deferred tax assets 447 997
8,701 12,817
Current assets
Inventories - 1,319
Trade and other receivables 5,076 5,951
Cash and cash equivalents - 1
5,076 7,271
Total assets 13,777 20,088
Capital and reserves
Called up share capital 1,840 1,840
Share premium account 743 743
Capital redemption reserve 109 109
Retained earnings 6,832 6,844
Total equity 9,524 9,536
Current liabilities
Financial liabilities 1,290 2,026
Trade and other payables 119 2,959
Amounts due to subsidiary companies 1,477 1,264
Income taxes payable - 1
2,886 6,250
Non-current liabilities
Amounts due to subsidiary companies 66 66
Deferred tax 814 916
Defined benefit pension scheme 487 3,320
deficit
1,367 4,302
13,777 20,088
Barrie Williams )
) Directors
Simon Duckworth )
The accounts were approved by the Board of Directors on 15 June 2006
Consolidated Cash Flow Statement
for the year ended 31 March 2006
Year ended Year ended
31 March 31 March
2006 2005
Operating activities £000 £000
Operating profit 2,502 2,363
Adjustments for:
Amortisation of software 27 31
Depreciation of property, plant and 1,526 1,623
equipment
Recognition of negative goodwill - (617)
Amortisation of Russell Castings rent - 200
free period
Profit on disposal of property, plant (1,040) (1)
and equipment
Pension element of finance costs (71) (111)
Share based payments 19 5
Special pension contribution (1,500) -
Other pension contributions in excess of (192) (43)
Income Statement charge
Operating cash flow before movements in working capital 1,271 3,450
(Increase)/Decrease in inventories (253) (674)
(Increase)/Decrease in receivables 1,383 (950)
Increase/(Decrease) in payables (49) 1,117
Cash generated from operations 2,352 2,943
UK Corporation Tax paid (823) (278)
Net cash flow from operating activities 1,529 2,665
Investing activities
Acquisition of business and assets of - (1,117)
Russell Castings
Cash acquired on acquisition of Russell - 1
Castings
Interest received 1 10
Purchase of property, plant and (1,415) (1,211)
equipment
Purchase of software (28) (37)
Development expenditure capitalised (229) -
Disposal of plant and equipment 1,713 76
Net cash flow from investing activities 42 (2,278)
Financing activities
Interest paid (64) (70)
Equity dividends paid (872) (871)
Issue of shares (including premium) - 30
Net cash flow from financing activities (936) (911)
Net increase/(decrease) in cash and cash equivalents 635 (524)
Cash and cash equivalents at the start of the year (42) 482
Cash and cash equivalents at the end of the year 593 (42)
Cash and cash equivalents comprise:
Cash and cash equivalents 593 1
Financial liabilities - (43)
593 (42)
Parent Company Cash Flow Statement
for the year ended 31 March 2006
Year ended Year ended
31 March 31 March
2006 2005
Operating activities £000 £000
Operating profit 194 (12)
Adjustments for
Depreciation of property, plant and 852 801
equipment
Amortisation of software 11 4
Profit on disposal of property, plant (1029) -
and equipment
Pension element of finance costs (71) (111)
Share based payments 19 5
Special pension contribution (1,500) -
Other pension contributions in excess (192) (43)
of Income
Statement charge
Operating cash flow before movements in working capital (1,716) 644
(Increase)/Decrease in inventories 333 (281)
(Increase)/Decrease in receivables 2,498 (1,613)
Increase/(Decrease) in payables 352 885
Cash generated from operations 1,467 (365)
UK Corporation Tax paid (1) (44)
Net cash flow from operating activities 1,466 (409)
Investing activities
Interest received 1 10
Purchase of property, plant and (383) (484)
equipment
Purchase of software (19) (19)
Development expenditure capitalised (130) -
Disposal of plant and equipment 1,678 49
Disposal of foundry business to (942) -
subsidiary
Net cash flow from investing activities 205 (444)
Financing activities
Interest paid (64) (70)
Equity dividends paid (872) (871)
Issue of shares (including premium) - 30
Net cash flow from financing activities (936) (911)
Net increase/(decrease) in cash and cash equivalents 735 (1,764)
Cash and cash equivalents at the start of the year (2,025) (261)
Cash and cash equivalents at the end of the year (1,290) (2,025)
Cash and cash equivalents comprise:
Cash and cash equivalents - 1
Financial liabilities (1,290) (2,026)
(1,290 (2,025)
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1 Authorisation of financial statements and statement of compliance with IFRS
The Group's and Company's financial statements of Chamberlin & Hill plc (the
'Company') for the year ended 31 March 2006 were authorised for issue by the
board of the directors on 15 June 2006 and the balance sheets were signed on the
board's behalf by Barrie Williams and Simon Duckworth. The Company is a public
limited company incorporated and domiciled in England & Wales. The Company's
ordinary shares are traded on the London Stock Exchange.
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The Company's financial
statements have been prepared in accordance with IFRS as adopted by the European
Union and as applied in accordance with the provisions of the Companies Act
1985. As permitted, the Group has also adopted early the amendments to
International Accounting Standard (IAS) 19 'Employee Benefits' published in
December 2004.
This is the first year in which the Group has prepared financial statements
under IFRS and the comparatives have been restated from UK Generally Accepted
Accounting Practice (UK GAAP) to comply with IFRS. The Group published notes
and reconciliations to explain the movements in the reported numbers from UK
GAAP to IFRS as part of its Interim Report 2005, published in December 2005.
The financial information set out in this announcement does not constitute the
statutory accounts of the Group for the years to 31 March 2006 or 31 March 2005
but is derived from the 2006 Annual Report and Accounts. The Annual Report and
Accounts for 2005, which were prepared under UK GAAP, have been delivered to the
Registrar of Companies and the Group Annual Report and Accounts for 2006,
prepared under IFRS, will be delivered to the Registrar of Companies in due
course. The auditors, Ernst & Young LLP, have reported on the accounts for the
year to 31 March 2006 and have given an unqualified report which does not
contain a statement under Section 237(2) or 237(3) of the Companies Act 1985.
The accounts for the year ended 31 March 2005 received an unqualified audit
report from the previous auditors, Heathcote & Coleman.
2 Summary of significant accounting policies
Basis of preparation
The consolidated financial statements are presented in sterling and all values
are rounded to the nearest thousand pounds (£000) except when otherwise
indicated. The Company has taken advantage of the exemption provided under
section 230 of the Companies Act 1985 not to publish its individual income
statement and related notes.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Chamberlin & Hill plc and its subsidiaries as at 31 March each year. The
financial statements of subsidiaries are prepared for the same reporting year as
the parent company, using consistent accounting policies. All inter-company
balances and transactions, including unrealised profits arising from intra-group
transactions, have been eliminated in full. Subsidiaries are consolidated from
the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
3. SEGMENTAL ANALYSIS
For management purposes, the Group is organised into two operating divisions;
Foundries and Engineering, which are the primary segments for reporting
purposes. The secondary segmental format is geographical.
The Foundries segment is a supplier of iron castings, in raw or machined form,
to a variety of industrial customers who incorporate the castings into their own
products or carry out further machining or assembly operations on the castings
before selling them on to such customers.
The Engineering segment provides manufactured and imported products to
distributors and end-users. The products fall into the categories of door
hardware, hazardous area lighting and control gear, cable management and general
ironmongery.
Transfer prices between business segments are set on an arms length basis in a
manner similar to transactions with third parties.
The Group's geographical segments are determined by the location of the Group's
customers. The Group's assets and costs incurred are all located within the
United Kingdom.
(i) By business segment
Foundries Engineering Total
Continuing operations 2006 2005 2006 2005 2006 2005
£000 £000 £000 £000 £000 £000
Revenue
Total sales 33,815 34,040 7,800 7,969 41,615 42,009
Inter-segment sales (180) (39) - - (180) (39)
Sales to third parties 33,635 34,001 7,800 7,969 41,435 41,970
Profit
Trading profit 2,328 1,821 552 694 2,880 2,515
Shared costs (482) (444)
Exceptional items 104 292
Operating profit 2,502 2,363
Net finance costs (134) (171)
Profit before tax 2,368 2,192
Tax expense (710) (658)
Profit for the year from continuing 1,658 1,534
operations
Net assets
Segmental assets 16,091 17,397 5,682 6,010 21,773 23,252
Segmental liabilities (6,428) (5,752) (1,149) (1798) (7,577) (7,395)
Segmental net assets 9,663 11,645 4,533 4,212 14,196 15,857
Unallocated net liabilities (654) (3,919)
Total net assets 13,542 11,938
Movements in fixed assets
Capital additions
Property, plant and equipment 1,134 1,039 281 172 1,415 1,211
Software 24 23 4 14 28 37
Development costs 130 - 99 - 229 -
Depreciation and
amortisation
Property, plant and (1,231) (1,311) (295) (312) (1,526) (1,623)
equipment
Software (17) (26) (10) (5) (27) (31)
Unallocated net liabilities comprise goodwill, cash/overdraft, taxation, pension
provisions, deferred tax balances, and head office fixed assets.
(ii) By geographical segment
2006 2005
Revenue by location of customer £000 £000
United Kingdom 32,730 35,052
Rest of Europe 6,818 5,469
Other countries 1,887 1,449
41,435 41,970
4. OTHER OPERATING EXPENSES 2006 2005
£000 £000
Distribution costs 1,430 1,290
Administration and selling expenses 4,092 3,778
Operating expenses before exceptional items 5,522 5,068
Exceptional items (note 12) (104) (292)
Operating expenses 5,418 4,776
5. STAFF NUMBERS AND COSTS 2006 2005
Number Number
The average number of people employed by the Group during the year was:
Management and administration 88 97
Production 447 476
Total employees 535 573
The aggregate employment costs of these employees including severance costs in
wages and salaries of £431,000 (2005: £325,000) were as follows:-
2006 2005
£000 £000
Wages and salaries 13,407 13,613
Social security costs 1,261 1,260
Other pension costs 444 417
15,112 15,290
Directors' emoluments summary 2006 2005
£000 £000
Directors' emoluments 520 531
Aggregate gains made by directors on exercise of options - -
Amounts receivable under long term incentive plans - -
Notional cost of options granted to directors 19 5
Number of directors accruing benefits under:
Defined benefit pension schemes 1 3
Defined contribution pension schemes 2 1
6. FINANCE COSTS AND FINANCE REVENUE
2006 2005
£000 £000
Finance costs
Finance cost of pensions (71) (111)
Bank overdraft interest payable (64) (70)
(135) (181)
Finance revenue
Bank interest receivable 1 10
Net finance costs (134) (171)
7. OPERATING PROFIT
2006 2005
This is stated after charging/(crediting): £000 £000
Profit on disposal of fixed assets (1,040) (1)
Amortisation of software 27 31
Depreciation of owned assets 1,526 1,623
Negative goodwill recognition - (617)
Exceptional severance payments and related costs 925 325
(note 12)
Auditors' remuneration as auditors (Company £38,000 83 40
(2005: £14,000))
Auditors' remuneration - other 6 61
Research and development expenditure 40 108
Rentals under operating leases:
Hire of plant and equipment 116 28
Other 296 96
Of the profit on disposal of fixed assets of £1,040,000 above, £1,029,000
relates to the sale of Bloxwich site following the termination of operations.
The £1,029,000 profit has been disclosed as part of the net exceptional gain on
the face of the income statement.
Severance payments and related costs in the year relate predominantly to
restructuring of foundry operations. The Bloxwich foundry operations were
terminated during the year and severance payments, provisions against asset
values and other costs were incurred.
8. TAX EXPENSE
2006 2005
£000 £000
Current tax:
UK Corporation tax at 30% (2005: 30%) based on taxable profit for the year 422 727
Prior year adjustment - (4)
422 723
Deferred Taxation:
Movement in the year 630 (159)
Less element of movement shown in the Statement of Recognised Income and Expense (342) 94
288 (65)
Tax expense reported in the consolidated income statement 710 658
Reconciliation of total tax charge
Profit on ordinary activities before tax 2,368 2,192
Corporation tax at standard rate of 30% (2005: 30%) on profit before tax 710 658
Adjusted by the effects of:
Expenses not deductible for tax purposes 11 16
Deduction in respect of special pension provision (150) -
Deduction in respect of other pension contributions (57) -
Deduction in respect of rollover of gain on property disposal (309) -
IBA adjustment re disposal of property 140 -
Other movements in temporary differences 77 (16)
Current tax charge 422 658
Deferred tax charge relating to temporary differences 288 -
Tax expense 710 658
9. DIVIDENDS PAID AND PROPOSED
2006 2005
£000 £000
Paid equity dividends on ordinary shares
2005 final dividend of 8.00p per share 589 587
2006 interim dividend of 3.85p per share 283 284
872 871
Proposed final dividend subject to shareholder approval
2006 final dividend of 8.00p per share (not recognised as a liability at 31
March 2006)
589 588
10. EARNINGS PER SHARE
The calculation of earnings per share is based on the profit attributable to
shareholders and the weighted average number of ordinary shares in issue. In
calculating the diluted earnings per share adjustment has been made for the
dilutive effect of outstanding share options. Underlying earnings per share,
which excludes operating exceptionals, as analysed below, has also been
disclosed as the Directors believe this allows a better assessment of the
underlying trading performance of the Group. Operating exceptionals comprise
severance payments and related costs associated with significant operational
restructuring.
2006 2005
£000 £000
Earnings for basic earnings per share 1,658 1,534
Negative goodwill recognition - (617)
Taxation effect of goodwill recognition - 185
Operating exceptionals (104) 325
Taxation effect of operating exceptionals 31 (97)
Earnings for underlying earnings per share 1,585 1,330
2006 2005
£000 £000
Weighted average number of ordinary shares 7,360 7,347
Adjustment to reflect shares under options 28 7
Weighed average number of ordinary shares - fully diluted 7,388 7,354
11. STATEMENT OF CHANGES IN EQUITY
Capital Attributable to
Share redemption Share Retained equity holders
capital reserve premium earnings of the parent
£000 £000 £000 £000 £000
Group
Balance at 1 April 2004 1,835 109 718 8,796 11,458
Total recognised income and expense
for the year to 31 March 2005 - - - 1,316 1,316
Dividends paid - - - (871) (871)
Recognition of share based payments - - - 5 5
Issue of shares 5 - 25 - 30
Balance at 1 April 2005 1,840 109 743 9,246 11,938
Total recognised income and expense
for the year to 31 March 2006 - - - 2,457 2,457
Dividends paid - - - (872) (872)
Recognition of share based payments - - - 19 19
Balance at 31 March 2006 1,840 109 743 10,850 13,542
12. EXCEPTIONAL ITEMS
2006 2005
£000 £000
Severance costs (425) (325)
Other closure costs (500) -
Profit on sale of Bloxwich property 1,029 -
Negative goodwill recognition - 617
104 292
Severance costs in 2006 relate predominantly to the termination of production at
the Bloxwich foundry and the resulting redundancies of employees not transferred
to alternative employment within the group.
Other closure costs relate to the disposal of certain stocks at below normal
selling price, and the writing down of fixed assets and remaining stocks to
their net realisable values at the year end.
The profit on sale of the Bloxwich site to Midland Properties (West Midlands)
Limited comprised:
£000
Proceeds of disposal 1,675
Net book value of property (635)
Sale costs (11)
1,029
This information is provided by RNS
The company news service from the London Stock Exchange
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