Final Results

RNS Number : 5565N
Chamberlin PLC
19 May 2015
 

19 May 2015

AIM: CMH

 

CHAMBERLIN plc

("Chamberlin", the "Company" or the "Group")

 

FINAL RESULTS

for the year ended 31 March 2015

 

KEY POINTS

 

·      Significant improvement in performance on prior year - in line with market expectations and reflecting management team's business turnaround initiatives

 

·      Revenues up 5.9% to £40.8m (2014: £38.6m)

·      Underlying profit before tax* of £0.8m (2014: loss of £0.8m)   

Profit before tax on an IFRS basis of £0.1m (2014: loss of £2.1m)

 

·      Exceptional costs reduced to £0.4m (2014: £1.0m) - mainly related to turnaround measures

 

·      Underlying diluted profit per share* of 7.2p (2014: loss per share of 7.6p)

IFRS diluted profit per share of 0.2p (2014: loss per share of 20.2p)

 

·      Cash inflow from operations of £1.3m (2014: cash outflow of £1.5m)

 

·      Net debt at 31 March 2014 of £3.8m (2014: £3.6m) - debt facility of £8.1m

 

·      The Group is targeting continued growth in 2016 from the new contract wins announced in November 2014.  However the current weak Euro exchange rate creates a significant headwind.

 

*All underlying figures are stated before ineffective hedge costs, exceptional items, administration costs of the pension scheme and net financing costs on pension obligations, share based payment costs and associated tax impact of these items.

 

Chairman, Keith Butler-Wheelhouse, commented, 

 

"I am pleased to report a significant improvement in Chamberlin's performance which has led to a return to profitability.  The improvement can be principally attributed to actions taken by management to address the cost base, a strong performance from our Walsall foundry, which saw improved conditions in the turbocharger bearing housing market, and improved sales and profits from the engineering division.

 

The Group's performance in the second half and beyond will be supported by the new contract wins and continuing progress at the engineering division.  However, we are mindful of the current weak Euro exchange rate which creates a significant headwind for the current year. 

 

We remain committed to delivering further progress and will provide a further update on trading at the AGM."

 

Enquiries

Chamberlin plc (www.chamberlin.co.uk)

Kevin Nolan, Chief Executive

David Roberts, Finance Director


T: 01922 707100

 




Charles Stanley Securities                                                                                                         

(Nominated Adviser and Broker)

Russell Cook / Carl Holmes


T: 020 7149 6000




KTZ Communications

(Financial PR)

Katie Tzouliadis


T: 020 3178 6378

Chairman's Statement

 

Introduction

 

We are pleased to report a significant improvement in Chamberlin's results for the financial year. Revenues increased by 5.9% to £40.8m, and the Group has returned to profitability with a £1.6m turnaround, posting underlying profit before tax of £0.8m against a loss of £0.8m in the prior year.

 

The improvement in trading can be principally attributed to actions taken by management to address the cost base, a strong performance from our Walsall foundry, which saw improved conditions in the turbocharger bearing housing market, and improved sales and profits from the engineering division.

 

The management team focus remains on identifying measures to achieve further cost efficiencies and improve processes, and we are progressing these initiatives. At the same time, we are also working on business development and further refining our growth plans.  We secured two new major contract wins in the year, which we reported on 17th October and 18th November.

 

Results

 

Revenues for the year ended 31 March 2015 were up 5.9% to £40.8m (2014: £38.6m) and the Group generated an underlying profit before tax of £0.8m (2014: loss of £0.8m).

 

The diluted underlying profit per share was 7.2p (2014: loss per share of 7.6p).

 

On an IFRS basis, the profit before tax was £0.1m (2014: loss of £2.1m), and diluted statutory earnings per share was 0.2p (2014: loss per share of 20.2p).

 

The net debt position at 31st March 2015 showed an increase of £0.2m to £3.8m from the net debt position at 31st March 2014 of £3.6m. Over the period, the Group generated operating cash inflow of £1.3m (2014: cash outflow £1.5m).

 

Dividend

 

No dividend is proposed for the period under review.

 

Staff

 

Our staff have contributed tremendous efforts over a very challenging year, and on behalf of the Board, I would like to thank everyone across the business for their hard work, which has helped to assist Chamberlin's continuing turnaround. 

 

Strategy & Outlook

 

The management team is pleased to have returned Chamberlin to profitability. As we reported at the half year, there is still work to be done and we are paying particular attention to the Scunthorpe and Leicester foundries. Demand across the Group has been subdued at the start of the new financial year, and we are mindful of the current weak Euro exchange rate which will create headwinds for the business.

 

The Group's performance in the second half and beyond will be supported by the new contract wins and continuing progress at the engineering division. 

 

We remain committed to delivering further progress and will provide a further update on trading at the AGM.  

 

 

 

 

Keith Butler-Wheelhouse

Chairman

18 May 2015

Chief Executive's Review

 

Group sales are up 5.9% compared to 2014, with sales from the Foundry activities up 4.7% and good growth in the Engineering businesses of 9.4%. 

 

Foundries

 

Foundry revenues increased by 4.7% year-on-year to £30.4m (2014: £29.1m). The total operating profit was £1.3m (2014: loss of £0.2m).

 

Our foundry at Walsall has significant expertise in small castings with complex internal geometry and typically below 3kg in weight. Its reputation in the development and production of castings with complex internal passages is well established and the complex geometry is achieved through the use of innovative core assembly techniques. Importantly, it is capable of producing these castings in mid-to-high volumes.  The automotive turbocharger segment is a major market for the Walsall foundry with modern designs requiring precise alignment of cooling and lubrication passages to meet the increased performance demanded by modern engines. Turbochargers accounted for 40.3% of the Foundry Division sales over the year (2014: 35.0%). Legislation remains a major driver of this market, with the requirement to reduce CO2 emissions promoting the introduction of smaller, turbocharged petrol engines. The legislation-driven shift in technology continues to be very evident as manufacturers seek to comply with the new CO2 emission standards.    

 

Our foundry in Leicester produces mid-size castings typically around 20kg, with moderately complex internal shapes although typically with demanding metallurgy requirements around temperature, strength and wear resistance.

 

Our foundry in Scunthorpe focuses on heavy castings weighing up to 6,000kg which have complex geometry and challenging metallurgy. These castings are used in applications where there is a requirement for high strength or high temperature performance. The foundry produces castings for large process compressors, industrial gas turbines and mining, quarrying and construction equipment.

 

Demand for both the Leicester and Scunthorpe foundries remained subdued and we have taken action to reduce the cost base at both foundries to ensure a lower breakeven point.

 

Engineering

 

Revenues from the engineering operations rose by 9.4% year-on-year to £10.4m (2013: £9.5m) and operating profits rose 47.0% to £1.0m (2014: £0.7m).  This Division now accounts for approximately 25% of Group revenues. 

 

Exidor

 

Exidor is the UK market leader in panic and emergency exit door hardware. The business has continued to consolidate its leading UK position in panic hardware and to improve its share of the door closer market, as well as to service the emerging need for physical security to protect high value retail infrastructure and critical national infrastructure. Exidor operates in a highly regulated market as its products are for life-critical applications and its customers place great value upon the assurance of genuinely British designed, manufactured and certified product.  A major focus has been to increase export sales and I am pleased to report that Exidor has achieved significant success, aided by a more strategic approach to export market selection and development.  We expect to see continuing growth in exports over the current year and beyond.

 

Petrel

 

Petrel Limited has a long established presence in lighting and control equipment for use in hazardous areas. It designs, develops and manufactures products for use in rigorous and demanding environments and has a reputation for high quality.  The business supplies customers across the UK and Europe as well as internationally.    

 

More recently, Petrel Limited established a portfolio of LED products, which provides customers with solutions that have the additional benefits of longer life, lower maintenance and reduced energy consumption. Being solid state components, LEDs are also less prone to damage and external shock making them ideal for use in harsh environments. The business is continuing to develop its LED offering as well as its portable light fittings range to ensure that customers benefit from ongoing advances in technology.

 

During 2015 11.6% of sales (2014: 1.7%) were from portable lighting and LED.  Further growth opportunities are expected to come from both product offerings. 

 

 

Outlook

 

We are encouraged by the significant improvement in the performance of the Group, which largely reflects both the stabilisation in revenues and the realigned cost base. There is scope to improve efficiencies and we remain highly focused on cost controls as we seek to develop growth initiatives.  Although we are encouraged by the progress that we have made to date, in the current year this will be partially offset by the impact of the weak Euro exchange rate, which is currently providing a headwind to the business.

 

 

Kevin Nolan

Chief Executive

18 May 2015

Finance Review

 

Overview

Sales increased by 5.9% during the year to £40.8m (2014: £38.6m) and gross profit margin increased significantly from 15.9% in 2014 to 20.1% in 2015.  

 

Underlying profit before tax is £0.8m (2014: loss of £0.8m). Diluted underlying earnings per share was 7.2p (2014: loss per share of 7.6p).

 

The IFRS results show operating profit of £0.4m (2014: loss of £1.9m), profit before tax of £0.1m (2014: loss of £2.1m) and statutory earnings per share of 0.2p (2014: loss per share 20.2p).

 

Exceptional items

Exceptional items in the year reduced significantly to £0.4m (2014: £1.0m), with the realignment of the cost base accounting for £0.3m of this figure. As a result the headcount of the Group has been reduced by 3.5% from 413 to 399. The environmental clean-up cost of £0.1m is not expected to recur.

 

Tax

The Group's underlying tax charge for the year was £0.2m (2014: credit of £0.2m) with an underlying effective rate of 27% (2014: 26%). The IFRS total tax charge for the year was £0.1m (2014: credit of £0.5m), an effective tax rate of 79% (2014: 24%). 

 

Cash generation and financing

Operating cash inflow was £1.3m (2014: outflow of £1.5m).

 

Capital expenditure for the year increased to £1.4m (2014: £1.0m). This was in line with depreciation and amortisation of £1.3m (2014: £1.4m).

 

Our overdraft and net borrowings at 31 March 2015 increased to £3.8m (2014: £3.6m). The Group debt facility has three elements: £7.0m invoice discounting facility, £0.5m overdraft, and a £0.6m loan repayable over three years. The Group is now trading with a comfortable level of headroom within these facilities and with covenants set at levels appropriate for the Group and this revised debt structure.

 

Foreign exchange

It is the Group's policy to minimise risk to exchange rate movements affecting sales and purchases by economically hedging or netting currency exposures at the time of commitment, or when there is a high probability of future commitment, using currency instruments (primarily forward exchange contracts). A proportion of forecast exposures are hedged depending on the level of confidence and hedging is topped up following regular reviews. On this basis up to 50% of the Group's annual exposures are likely to be hedged at any point in time and the Group's net transactional exposure to different currencies varies from time to time.

 

Approximately 33% of the Group's revenues are denominated in Euros. During the year to 31 March 2015 the average exchange rate used to translate into GBP sterling was 1.24.

 

Pension

The Group's defined benefit pension scheme was closed to future accrual in 2007. Following the last triennial valuation, as at 1 April 2013, contributions were set at £0.3m per year for the period under review increasing by 3% per year thereafter based on a deficit recovery period of 14 years. 

 

The pension expense for the defined benefit scheme was £0.2m in 2015 (2014: £0.3m), and is shown in non-underlying.  The Group cash contribution during the year was £0.3m (2014: £0.4m).

 

The Group operates a defined contribution pension scheme for its current employees.  The cost of £0.3m (2014: £0.3m) is included within underlying operating performance.

 

The IAS 19 deficit at 31 March 2015 was £4.5m (2014: £3.5m). The increase principally reflects the decrease in the discount rate used to calculate scheme liabilities, as a consequence of a rise in bond yields over the last year partially offset by outperformance of assets against expected levels.

 

David Roberts 18 May 2015



Consolidated Income Statement

for the year ended 31 March 2015

 



Year ended 31 March 2015


Year ended 31 March 2014


Note

Underlying

  +  Non-underlying

Total


Underlying

   +   Non-

underlying

Total



£000

£000

£000


£000

£000

£000










Revenue

3.

40,835

-

40,835


38,562

-

38,562

Cost of sales


(32,612)

-

(32,612)


(32,413)

-

(32,413)

Gross profit


8,223

-

8,223


6,149

-

6,149










Other operating expenses

7.

(7,236)

(583)

(7,819)


(6,905)

(1,142)

(8,047)

Operating profit/ (loss)


987

(583)

404


(756)

(1,142)

(1,898)










Finance costs

4.

(184)

(144)

(328)


(62)

(156)

(218)










Profit/ (loss) before tax


803

(727)

76


(818)

(1,298)

(2,116)










Tax (expense)/ credit


(213)

153

(60)


214

298

512

Profit /(loss) for the year from continuing operations attributable to equity holders of the parent Company


590

(574)

16


 (604)

 (1,000)

 (1,604)










Earnings per share









Basic

6.



0.2p




(20.2)p

Basic underlying

6.

7.4p




(7.6)p



Diluted

6.



0.2p




(20.2)p

Diluted underlying

6.

7.2p




(7.6)p



                                                                                                                               

+ Non-underlying items represent exceptional items as disclosed in note 7, administration costs of the pension scheme and net financing costs on pension obligations, share based payment costs and associated tax impact of these items.

 

 

  

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2015

 



2015


2014



£000


£000






Profit/ (loss) for the year


16


(1,604)

Other comprehensive income










Reclassification for cash flow hedge included sales


193


162

Movements in fair value on cash flow hedges taken to other comprehensive income


(162)


199

Deferred tax on movement in cash flow hedges


(6)


(79)

Net other comprehensive income to be reclassified to profit or loss in subsequent periods


25


282






Re-measurement (losses)/ gains on pension assets and liabilities


(1,150)


338

Deferred/ current tax on re-measurement losses/ (gains) on pension scheme


242


(78)

Movement on deferred tax on re-measurement losses relating to rate change


-


(104)

Net other comprehensive (expense)/ income not to be reclassified to profit or loss in subsequent periods


 

(908)


 

156






Other comprehensive (expense)/ income for the period net of tax


(883)


438






Total comprehensive expense for the period attributable to equity holders of the parent Company


(867)


(1,166)






 

 



Consolidated Balance Sheet

at 31 March 2015

 



2015


2014



£000


£000

Non-current assets





  Property, plant and equipment


7,900


7,907

  Intangible assets


452


456

  Deferred tax assets


1,382


1,196



9,734


9,559






Current assets





  Inventories


4,006


3,734

  Trade and other receivables


7,809


7,508

  Current tax


1


38



11,816


11,280






Total assets


21,550


20,839






Current liabilities





  Financial liabilities


3,392


3,041

  Trade and other payables


6,801


6,641

  Provisions


-


26



10,193


9,708






Non current liabilities





  Financial liabilities


400


600

  Deferred tax


104


98

  Provisions


200


-

  Defined benefit pension scheme deficit


4,544


3,493



5,248


4,191






Total Liabilities


15,441


13,899






Capital and reserves





  Called up share capital


1,990


1,990

  Share premium account


1,269


1,269

  Capital redemption reserve


109


109

  Hedging reserve


155


130

  Retained earnings


2,586


3,442

Total equity


6,109


6,940











Total equity and liabilities


21,550


20,839






 



Consolidated Cash Flow Statement

for the year ended 31 March 2015

 



2015


2014



£000


£000

Operating activities










Profit/ (loss)  for the year before tax


76


(2,116)

Adjustments to reconcile profit for the year to net cash inflow/ (outflow) from operating activities:





Net finance costs excluding pensions


184


62

Depreciation of property, plant and equipment


1,180


1,259

Amortisation of software


105


82

Amortisation and impairment of development costs


8


86

Profit on disposal of property, plant and equipment


(6)


(29)

Loss on disposal of intangibles


11


-

Share based payments


30


9

Difference between pension contributions paid and amounts recognised in the Consolidated Income Statement


(99)


(82)

Increase in inventories


(272)


(403)

(Increase)/ decrease in receivables


(268)


627

Increase/ (decrease) in payables


160


(992)

Increase in provisions


174


-

       Cash inflow/ (outflow) from operations


1,283


(1,497)

       Income taxes received


37


-

Net cash (outflow)/ inflow from operating activities


1,320


(1,497)











Investing activities





Purchase of property, plant and equipment


(1,261)


(1,018)

Purchase of software


(120)


(4)

Disposal of plant and equipment


94


80

Net cash outflow from investing activities


(1,287)


(942)

Financing activities





Interest paid


(184)


(62)

Dividends paid


-


(159)

Repayment of asset loans


(200)


800

Net invoice finance draw down


217


2,684






Net cash (outflow)/ inflow from financing activities


(167)


3,263






Net (decrease)/ increase in cash and cash equivalents


(134)


824






Cash and cash equivalents at the start of the year


(157)


(981)






Cash and cash equivalents at the end of the year


(291)


(157)






Cash and cash equivalents comprise:





Bank overdraft


(291)


(157)



(291)


(157)






 



Consolidated statement of changes in equity

 


Share capital

Capital redemption reserve

Share premium

Hedging reserve

Retained earnings

Attributable to equity holders of the parent


£000

£000

£000

£000

£000

£000








Balance at 31 March 2013

1,990

109

1,269

(152)

5,077

8,293








Loss for the year 

-

-

-

-

(1,604)

(1,604)

Other comprehensive income for the year net of tax

-

-

-

282

156

438

Total comprehensive income

-

-

-

282

(1,448)

(1,166)








Dividends paid

-

-

-

-

(159)

(159)

Share based payments

-

-

-

-

9

9

Deferred tax on employee share options

-

-

-

-

(37)

(37)

Total of transactions with shareholders

-

-

-

-

(187)

(187)








Balance as at 1 April 2014

1,990

109

1,269

130

3,442

6,940








Profit for the year 

-

-

-

-

16

16

Other comprehensive income for the year net of tax

-

-

-

25

(908)

(883)

Total comprehensive income

-

-

-

25

(892)

(867)








Share based payments

-

-

-

-

30

30

Deferred tax on employee share options

-

-

-

-

6

6

Total of transactions with shareholders

-

-

-

-

36

36















Balance at 31 March 2015

1,990

109

1,269

155

2,586

6,109








 

 

Share premium account

The share premium account balance includes the proceeds that were above the nominal value from issuance of the Company's equity share capital comprising 25p shares.

 

Capital redemption reserve

The capital redemption reserve has arisen on the cancellation of previously issued shares and represents the nominal value of those shares cancelled.

 

Retained earnings

Retained earnings include the accumulated profits and losses arising from the Consolidated Income Statement and certain items from the Statement of Comprehensive Income attributable to equity shareholders, less distributions to shareholders.

 

Hedging reserve

The hedging reserve records the effective portion of the net change in the fair value of the cash flow hedging instruments related to hedged transactions that have not yet occurred.

 



 

 

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 for the year ended 31 March 2015 were authorised for issue by the board of directors on 18 May 2015 and the balance sheets were signed on the board's behalf by Kevin Nolan and David Roberts.  The Company is a public limited Company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the AIM market of 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 2006.

 

The financial information set out in this announcement does not constitute the statutory accounts of the Group for the years to 31 March 2015 or 31 March 2014 but is derived from the 2015 Annual Report and Accounts.  The Annual Report and Accounts for 2014 have been delivered to the Registrar of Companies and the Group Annual Report and Accounts for 2015 will be delivered to the Registrar of Companies in due course. The auditors, Grant Thornton UK LLP, have reported on the accounts for the year 31 March 2015 and have given an unqualified report which does not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006 nor an emphasis of matter paragraph. 

 

 

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 408 of the Companies Act 2006 not to publish its individual income statement and related notes.

 

Basis of consolidation

The consolidated financial statements comprise the financial statements of Chamberlin 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.

 

Accounting policies

The preliminary announcement has been prepared on the same basis as the financial statements for the year ended 31 March 2014.

 

 

 

 

3.             SEGMENTAL ANALYSIS

 

For management purposes, the Group is organised into two operating divisions: Foundries and Engineering.

 

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 their customers.

 

The Engineering segment provides manufactured and imported products to distributors and end-users operating in the safety and security markets.  The products fall into the categories of door hardware, hazardous area lighting and control gear.

 

The Group's geographical segments are determined by the location of the Group's customers. 

 

(i)            By operating segment


Segmental revenue

Segmental operating profit

Year ended

2015

2014

2015

2014


£000

£000

£000

£000

Foundries

30,432

29,056

1,259

(244)

Engineering

10,403

9,506

988

672






Segmental Results

40,835

38,562

2,247

428






Reconciliation of reported segmental operating profit





Segment operating profit



2,247

428

Shared costs (excluding share based payment charge)



(1,260)

(1,184)

Exceptional and non-underlying costs



(583)

(1,142)

Net finance costs



(328)

(218)

Profit before tax



76

(2,116)






Segmental assets










Foundries



15,221

15,453

Engineering



5,617

4,927

Segmental net assets



20,838

20,380






Segmental liabilities










Foundries



(4,844)

(5,342)

Engineering



(2,157)

(1,325)

Segmental net assets



(7,001)

(6,667)











Unallocated net liabilities



(7,728)

(6,773)






Total net assets



(6,109)

6,940

 

  

 

 

 

Capital expenditure, depreciation and amortisation





 

Capital additions

Foundries

Engineering

Total



2015

2014

2015

2014

2015

2014


£000

£000

£000

£000

£000

£000

Property, plant and   equipment

937

853

324

165

1,261

1,018

Software

80

3

40

1

120

4








Depreciation and Amortisation














Property, plant and equipment

(941)

(989)

(239)

(270)

(1,180)

(1,259)

Software

(83)

(67)

(22)

(15)

(105)

(82)

Development costs

-

(69)

(8)

(17)

(8)

(86)

 

 

(ii)           By geographical segment


2015

2014

Revenue by location of customer

£000

£000




United Kingdom

24,992

25,450

Germany

6,997

6,482

Rest of Europe

6,592

4,257

Other countries

2,254

2,373


40,835

38,562

 

 

4.             FINANCE COSTS AND FINANCE REVENUE


2015

2014


£000

£000

Finance costs



Bank overdraft interest payable

(184)

(62)

Finance cost of pensions

(144)

(156)


(328)

(218)

 

 

5.             DIVIDENDS PAID AND PROPOSED


2015

2014


£000

£000

Paid equity dividends on ordinary shares



 2014 final dividend of nil p (2013: 2.00p) per share

-

159

 2015 interim dividend of nil p (2014: nil p) per share

-

-


-

159

Proposed final dividend subject to shareholder approval



  2015 final dividend of nil p (2014: nil p) per share

-

-

 

  

 

6.             EARNINGS/ (LOSS) PER SHARE

 

The calculation of earnings/ (loss) 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/ (loss) per share, adjustment has been made for the dilutive effect of outstanding share options.  Underlying earnings/ (loss) per share, which excludes non-underlying items, as analysed below, has also been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group. Exceptional costs are detailed in note 7.

 


2015

2014


£000

£000

Earnings/ (loss) for basic earnings per share

16

(1,604)

Exceptional costs

417

1,002

Net financing costs and service cost on pension obligations

280

287

Share based payment charge

30

9

Taxation effect of the above

(153)

(298)

Earnings/ (loss) for underlying earnings per share

590

(604)








2015

2014


Number

'000

Number

'000

Weighted average number of ordinary shares

7,958

7,958

Adjustment to reflect shares under options

212

-

Weighted average number of ordinary shares - fully diluted

8,170

7,958




As at 31 March 2014 there is no adjustment for the 211,005 shares under option as they are required to be excluded from the weighted average number of shares for diluted (loss) per share as they are anti-dilutive for the period then ended.

 

7.             EXCEPTIONAL COSTS AND NON-UNDERLYING


2015

2014


£000

£000




Prior CEO leaving costs

-

307

Group reorganisation

314

695

Environmental clean up

103

-

Exceptional costs

417

1,002




Share based payment charge

30

9

Defined benefit pension scheme administration costs

136

131

Non-underlying other operating expenses

583

1,142

Finance cost of pensions

144

156

Taxation



 - tax effect of exceptional and non-underlying costs

(153)

(298)


574

1,000

 

 

Prior CEO leaving costs relate to contractual payments made to the former CEO, Tim Hair, and costs associated with the recruitment of the current CEO, Kevin Nolan

 

During 2014 and continuing into 2015 the Group rationalised its Foundry operations into one division, enabling the elimination of duplication roles and implementation of best practice. Group reorganisation costs, including redundancy and recruitment, relate to this rationalisation.

 

Environmental cleanup costs relate to exceptional costs incurred in the clean-up of the Scunthorpe site.

 

8.             FINANCIAL LIABILITIES

 


2015

2014


£000

£000

Current liabilities



Bank overdraft

291

157

Current instalments due on asset finance loans

200

200

Invoice finance facility

2,901

2,684


3,392

3,041

Non-current liabilities



Instalments due on asset finance loans

400

600

Total financial liabilities

3,792

3,641

 

The overdraft is held with HSBC Bank plc as part of the Group facility of £500,000, is secured on all assets of the business, is repayable on demand and is renewable in March 2016. Interest is payable at 2.0% (2014: 2.0%) over base rate.

 

Asset finance loans are secured against various items of plant and machinery across the Group. These loans are repayable by monthly instalments for a period of three years to March 2018. Interest is payable at 3.25% over base rate. £200,000 is repayable within year 1-2 and a further £200,000 repayable in years 2-5.

 

Invoice finance balances are secured against the trade receivables of the Group, is repayable on demand and is renewable in March 2016. Interest is payable at 2.3% over base rate. The maximum facility as at 31 March 2015 is £6.0m, this was increased to £7.0m in April 2015. Management have assessed the treatment of the financing arrangements and have determined it is appropriate to recognise trade receivables and invoice finance liabilities separately.

 

9.             PENSIONS ARRANGEMENTS

 

During the year, the Group operated funded defined benefit and defined contribution pension schemes for the majority of its employees, these being established under trusts with the assets held separately from those of the Group.  The pension operating cost for the Group defined benefit scheme for 2015 was £136,000 (2014: £131,000) plus £144,000 of financing cost (2014: £156,000).

 

The other schemes within the Group are defined contribution schemes and the pension cost represents contributions payable. The total cost of defined contributions schemes was £312,000 (2014: £259,000).  The notes below relate to the defined benefit scheme. 

 

The actuarial liabilities have been calculated using the Projected Unit method.  The major assumptions used by the actuary were (in nominal terms):-


31 March

2015

31 March

2014

31 March

2013





Salary increases

n/a

n/a

n/a

Pension increases (post 1997)

2.9%

3.2%

3.2%

Discount rate

3.2%

4.3%

4.2%

Inflation assumption - RPI

2.9%

3.2%

3.3%

Inflation assumption - CPI

1.8%

2.2%

2.2%

 

 

The post retirement mortality assumptions allow for expected increases in longevity. The current disclosures relate to assumptions based on longevity in years following retirement as of the balance sheet date, with future pensions relating to an employee retiring in 2032.

 

  

 



2015

Years

2014

Years





Current pensioner at 65 -      male


21.3

21.3

-       female


23.6

23.6

Future pensioner at 65  -       male


22.3

22.3

-       female


24.8

24.7

 

The scheme was closed to future accrual with effect from 30th November 2007, after which the Company's regular contribution rate reduced to zero (previously the rate had been 9.1% of members' pensionable salaries).

 

During the year the triennial valuation as at 1 April 2014 was concluded. In return for maintaining the previous contribution arrangements and extending the deficit reduction period to 2028, the Company has given security over the Group's land and buildings to the pension scheme. With effect from 1 April 2015 deficit reduction contributions will increase to £20,633 per month (previously £20,032 per month), with a 3% annual increase thereafter.

 

The contributions expected to be paid during the year to 31 March 2016 are £248,000.

 

The scheme assets are stated at the market values at the respective balance sheet dates. The assets and liabilities of the scheme were:

 



2015

£000

2014

£000





Equities/ diversified growth fund


12,451

7,328

Gilts


-

3,040

Bonds


1,417

2,360

Insured pensioner assets


9

10

Cash


131

118

Market value of assets


14,008

12,856

Actuarial value of liability


(18,552)

(16,349)

Scheme deficit


(4,544)

(3,493)

Related deferred tax asset


909

699

Net pension liability


(3,635)

(2,794)





 

 

Net benefit expense recognised in profit and loss


2015

£000

2014

£000





Administration costs


(32)

(131)

Net interest expense


(144)

(156)



(176)

(287)





 

 

Re-measurement losses/ (gains) in other comprehensive income


2015

£000

2014

£000





Actuarial losses/ (gains) arising from changes in financial assumptions


2,196

(269)

Actuarial losses arising from changes in demographic assumptions


-

34

Experience adjustments


208

(407)

Return on assets (excluding interest income)


(1,254)

304



1,150

(338)





 

 

 

 



2015

£000

2014

£000





Actual return on plan assets


1,762

240





 

Movement in deficit during the year


2015

£000

2014

£000





Deficit in scheme at beginning of year


(3,493)

(3,913)

Employer contributions


275

369

Net benefit expense


(176)

(287)

Actuarial (loss)/ gain


(1,150)

338

Deficit in scheme at end of year


(4,544)

(3,493)





 

Movement in scheme assets


2015

£000

2014

£000





Fair value at beginning of year


12,856

13,137

Interest income on scheme assets


540

544

Return on assets (excluding interest income)


1,254

(304)

Employer contributions


275

369

Benefits paid


(885)

(759)

Administrative costs


(32)

(131)

Fair value at end of year


14,008

12,856





 

Movement in scheme liabilities


2015

£000

2014

£000





Benefit obligation at start of year


16,349

17,050

Interest cost


684

700

Actuarial losses/ (gains) arising from changes in financial assumptions


2,196

(269)

Actuarial losses arising from changes in demographic assumptions


-

34

Experience adjustments


208

(407)

Benefits paid


(885)

(759)

Benefit obligation at end of year


18,552

16,349





The weighted average duration of the pension scheme liabilities are 14.5 years (2014: 14.5 years).

 

A quantitative sensitivity analysis for significant assumptions as at 31 March 2015 is as shown below:

 

 

Present value of scheme liabilities when changing the following assumptions:



2015

£000





Discount rate increased by 1% p.a.



16,254

RPI and CPI increased by 1% p.a.



19,531

Mortality- members assumed to be their actual age as opposed to 1 year older



19,245





The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligations as a result of reasonable changes in key assumptions occurring at the end of the year.

 

 

 

10.          REPORT AND ACCOUNTS

 

Copies of the Annual Report will be available on the Group's website, www.chamberlin.co.uk and from the Group's head office at Chuckery Road, Walsall, West Midlands, WS1 2DU.

 


This information is provided by RNS
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