Interim Results
Macfarlane Group PLC
11 September 2007
11 September 2007
MACFARLANE GROUP'S INTERIM RESULTS TO 30 JUNE 2007
Group profit before taxation from continuing operations
for the six months of £0.5m
Sales growth of 12% from continuing operations
Increasing focus being brought to Group activities
Net debt of £9.5m at June 2007, Group expects to be strongly
cash positive in second half of 2007
Dividend intentions maintained
Archie Hunter, Chairman of Macfarlane Group PLC today said:-
'I am pleased to be able to report continuing improvement in Macfarlane Group's
trading performance in the six months to 30 June 2007 and significant progress
in bringing increased focus to the activities of the Group.
In the six months to 30 June 2007, pre-tax profit from the Group's continuing
operations was £0.5 million compared with a loss of £0.4 million for the six
months to 30 June 2006 on sales up 12% from £51.2 million to £57.4 million.
Our Packaging Distribution business is now benefiting from the investments made
last year in the management team and in new business development resources. The
outcome is an operating profit for the half year of £0.3 million against a loss
of £0.5 million a year ago on sales 15% ahead of the same period in 2006. Our
market-leading position creates clear potential for profitable growth in this
business both organically and by acquisition. The operating profit from all of
our Manufacturing Operations was £0.4 million, a similar level to the previous
year.
The Board has concluded that the Group's interests would be best served by the
concentration of management's attention on those business activities where we
have developed good market positions and growth potential. Accordingly
discussions with prospective purchasers for certain non-strategic activities
within Manufacturing Operations are being pursued. As a result, these activities
require to be categorised as discontinued operations in this statement with
comparative figures amended accordingly. Given the commercial sensitivities of
these discussions, the Board believes that it would not be in the Group's
interests to say anything further at this time. Further announcements will be
made when appropriate.
The discontinued operations referred to above are expected to give rise to an
impairment loss of £1.8 million for which provision has been made, however they
will have a considerable positive cash impact. This, together with anticipated
net cash generation from trading activities in the six months to 31 December
2007 indicates that the Group will largely eliminate bank borrowings by the end
of the year. The Board is actively seeking acquisitions to complement its
strategic activities.
As previously indicated, an interim dividend of 1p per share will be paid on
Thursday 25 October 2007 to those shareholders on the register at 28 September
2007.
It has been an active six months and the Board is satisfied that progress is
being made. The second half of 2007 has maintained the momentum of the first
half with trading in July and August in line with our expectations. There are
considerable opportunities to be pursued and in each of our business activities
we are undertaking initiatives aimed at delivering sustained profitable growth.'
Further information: Archie S. Hunter Chairman 0141 333 9666
Peter D. Atkinson Chief Executive 0141 333 9666
John Love Finance Director 0141 333 9666
Trading performance
Packaging Distribution
Macfarlane's Packaging Distribution business is the leading UK distributor of a
comprehensive range of packaging consumable products. In a highly fragmented
market, Macfarlane is the market leader with a 10% market share. The business
operates through Regional Distribution Centres (RDCs) supplying customers on a
local, regional and national basis. The business enables customers to package
their products cost effectively by providing them with a comprehensive product
range, single source supply, just in time delivery and tailored stock management
programmes.
In the first half of 2007, Packaging Distribution recorded an operating profit
of £0.3m, compared to a loss of £0.5m in the same period in 2006. Our objective
in the remainder of the year is to strengthen our position in the UK market
through organic growth and targeted acquisitions.
In the first half of 2007 sales are 15% ahead of the same period in 2006.
Organic growth is 10% ahead of 2006 with the benefits of the investments in our
RDC managers and the New Business Development team beginning to be demonstrated.
Packaging2u.co.uk, our web-based packaging business, is continuing to make good
progress.
In the second half of 2006 we acquired Bloomfield Supplies. The business traded
successfully in the first half of 2007 and its performance is in line with our
expectations. During the second half of 2007 we will fully integrate the
Bloomfield business into the Macfarlane RDC network.
We currently have nine of our RDCs performing at acceptable levels of return.
Four RDCs are demonstrating levels of improvement in line with our expectations
and the three underperforming RDCs are progressing and will be major
beneficiaries of the integration of the Bloomfield business, which will enable
them to exit the year in profit.
The pricing environment remains volatile, however despite this pressure, our
gross margin in the first half of 2007 at 30.5% showed an encouraging
improvement on the 29.9% recorded in the same period in 2006. Gross margin
improvement continues to be a key area of management focus.
Our priorities for the Distribution business in the second half of 2007 are to:
•Accelerate the current strong sales momentum, particularly through the
New Business Development and National Account teams;
•Successfully integrate Bloomfield Supplies into the Macfarlane RDC
network;
•Continue to ensure effective recovery of supplier price increases to
protect our gross margin;
•Maintain the level of performance improvement in the underperforming
RDCs;
•Ensure the Packaging2u.co.uk business accelerates its current momentum;
and
•Enhance current organic growth with targeted acquisitions.
Trading performance
Manufacturing Operations
Macfarlane operates a range of manufacturing businesses, producing self adhesive
and re-sealable labels, plastic injection moulded closures and dispensers,
bespoke composite transit packaging and foam based packaging and protective
components.
Macfarlane Labels operates from two plants, Kilmarnock and Dublin, supplying
design and production of high quality self-adhesive and re-sealable labels for
consumer packs.
In the first half of 2007 Labels sales were broadly in line with the same period
in 2006 and showed signs of stabilisation following the 11% reduction in 2006.
During the first half sales improved in self-adhesive labels and a slowed
slightly in re-sealable labels. However with our first US customer now
operational we expect re-sealable label sales to strengthen in the second half
of the year.
The cost savings implemented in the second half of 2006 are enabling the
business to operate with a lower cost base and the profitability of the Labels
business in the first half of 2007 was ahead of the same period in 2006.
Macfarlane Plastics operates from Wicklow in Ireland designing and producing
injection-moulded closures and dispensers primarily used in the packaging of
powdered consumer products. The Plastics business experienced sales in the first
half of 2007 around the same level as 2006. However weaker margins resulted in
first half profits being slightly down on the equivalent period in 2006.
We operate Packaging Manufacturing operations from two UK sites - Grantham and
Westbury, both of which manufacture custom-designed packaging solutions for
customers looking for cost-effective methods of protecting higher-value products
in storage and transit.
Sales in our UK Packaging Manufacturing operations were ahead of the same period
in 2006 with good growth in sales to Macfarlane Distribution and new business.
However pressure on raw material pricing and planned overhead investments
resulted in first half profits only slightly ahead of the same period in 2006.
Our US operations in California and Mexico focus on foam-based packaging
components primarily for use in the electronics, healthcare and fresh produce
sectors. First half sales in the US/Mexico were down on the same period in 2006
primarily due to unfavourable market conditions. In order to counteract the weak
demand, cost reduction programmes have been implemented including the increased
use of our low-cost manufacturing facility in Tijuana. Despite these actions the
US/Mexico business made a loss in the first half of 2007 compared with a small
profit in the equivalent period in 2006.
Our priorities for Manufacturing Operations in the second half of 2007 are to:
• Maintain our momentum in the strategic repositioning of the
self-adhesive labels business;
• Improve our penetration in the re-sealable labels market, particularly
in the USA;
• Penetrate new geographic markets in our Plastics business through the
leveraging of our strong relationships with global customers;
• Utilise the strong relationship with Macfarlane Distribution to
strengthen sales in UK Packaging Manufacture;
• Ensure the planned overhead investments in UK Packaging Manufacture
reflect in improved profitability; and
• Fully utilise the lower cost benefits of our new Tijuana manufacturing
facility to improve profitability in our US/Mexico foam business.
Future Outlook
The first half of 2007 has demonstrated an encouraging uplift in profit
performance primarily driven by our Packaging Distribution business. The
momentum we have created should strengthen in the second half of the year based
on the effective implementation of planned management actions.
Macfarlane Group is intent on giving greater focus to the Group's activities in
order to concentrate management resources on accelerating growth and financial
returns from the key businesses.
INDEPENDENT REVIEW REPORT TO MACFARLANE GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007, which comprises the group income statement,
the group statement of recognised income and expense, the group reconciliation
of movements in equity, the group balance sheet, the group cash flow statement
and related notes 1 to 11. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review 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 formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Deloitte & Touche LLP
Chartered Accountants
Glasgow
United Kingdom
11 September 2007
MACFARLANE GROUP PLC
GROUP INCOME STATEMENT (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months to Six months to Year to
30 June 2007 30 June 2006 31 December
2006
Note £000 £000 £000
Continuing operations
Revenue 3 57,389 51,249 106,313
Cost of sales (38,978) (35,019) (72,522)
------- ------- -------
Gross profit 18,411 16,230 33,791
Distribution expenses (2,998) (2,742) (5,490)
Administrative expenses (14,674) (13,674) (26,294)
------- ------- -------
Operating profit/(loss) 3 739 (186) 2,007
Finance costs 4 (1,758) (1,816) (3,296)
Investment income 4 1,472 1,562 2,762
------- ------- -------
Profit/(loss) before tax 453 (440) 1,473
Tax 5 (187) (278) (315)
------- ------- -------
Profit/(loss) for the
period from continuing
operations 8 266 (718) 1,158
Discontinued operations 7
(Loss)/profit for the
period from discontinued
operations (1,989) 990 893
------- ------- -------
(Loss)/profit for the
period 8 (1,723) 272 2,051
======= ======= =======
Earnings/(loss) per
ordinary share of 25p 8
From continuing operations
Basic 0.24p (0.64p) 1.03p
======= ======= =======
Diluted 0.24p (0.63p) 1.02p
======= ======= =======
From continuing and
discontinued operations
Basic (1.53p) 0.24p 1.82p
======= ======= =======
Diluted (1.53p) 0.24p 1.81p
======= ======= =======
MACFARLANE GROUP PLC
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months to Six months to Year to 31
30 June 2007 30 June December 2006
2006
Note £000 £000 £000
Exchange
difference on
translation of
foreign operations (135) (390) (764)
Actuarial gains on
defined benefit
pension schemes 10 2,055 2,186 5,835
Tax on items
taken directly
to equity (842) (655) (1,751)
--------- --------- --------
Net income
recognised
directly in
equity 1,078 1,141 3,320
(Loss)/profit
for the period (1,723) 272 2,051
--------- --------- --------
Total
recognised
income and
expense for
the period (645) 1,413 5,371
========= ========= ========
MACFARLANE GROUP PLC
GROUP RECONCILIATION OF MOVEMENTS IN EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months to Six Months to Year to 31
30 June 30 June December 2006
2007 2006
Note £000 £000 £000
(Loss)/profit
for the period (1,723) 272 2,051
Dividends to
equity holders
in the period 6 (1,125) (1,125) (1,125)
Exchange
differences on
translation of
foreign
operations (135) (390) (764)
Actuarial
gains on
pension
schemes 10 2,055 2,186 5,835
Taxation on
items taken
direct to
equity (842) (655) (1,751)
Credit in
respect of
share based
payments 59 - 140
-------- --------- --------
Movements in
equity in the
period (1,711) 288 4,386
Opening equity 29,825 25,439 25,439
-------- --------- --------
Closing equity 28,114 25,727 29,825
======== ========= ========
MACFARLANE GROUP PLC
GROUP BALANCE SHEET AT 30 JUNE 2007 (UNAUDITED)
As at As at As at 31
December
30 June 30 June 2006
2007 2006
£000 £000 £000
Non-current assets Note
Goodwill 18,646 17,195 18,973
Property, plant and equipment 9,303 13,360 13,112
Investment property 1,701 1,701 1,701
Other receivables 1,059 1,049 1,057
Deferred tax asset 11 3,610 5,806 4,560
-------- -------- --------
Total non-current assets 34,319 39,111 39,403
-------- -------- --------
Current assets
Inventories 8,261 9,016 9,811
Trade and other receivables 27,180 29,235 29,508
Cash and cash equivalents 890 942 2,195
-------- -------- --------
Total current assets 36,331 39,193 41,514
Non current assets classified as held
for sale 7 8,149 - -
-------- -------- --------
44,480 39,193 41,514
-------- -------- --------
-------- -------- --------
Total assets 78,799 78,304 80,917
======== ======== ========
Current liabilities
Trade and other payables 22,551 24,334 26,710
Tax liabilities 220 726 663
Obligations under finance leases 41 39 44
Bank overdrafts and loans 11,107 7,368 7,747
Liabilities directly associated with
assets classified as held for sale 7 3,551 - -
-------- -------- --------
Total current liabilities 37,470 32,467 35,164
-------- -------- --------
Net current assets 7,010 6,726 6,350
-------- -------- --------
Non-current liabilities
Retirement benefit obligations 10 13,180 20,035 15,873
Obligations under finance leases 35 75 55
-------- -------- --------
Total non-current liabilities 13,215 20,110 15,928
-------- -------- --------
-------- -------- --------
Total liabilities 50,685 52,577 51,092
======== ======== ========
-------- -------- --------
Net assets 28,114 25,727 29,825
======== ======== ========
Equity
Share capital 28,755 28,755 28,755
Revaluation reserve 167 167 167
Own shares held by employee share trust (1,406) (1,406) (1,406)
Translation reserve Continuing
activities (149) (425) (800)
Discontinued activities (787) - -
Retained earnings 1,534 (1,364) 3,109
-------- -------- --------
Total equity 28,114 25,727 29,825
======== ======== ========
MACFARLANE GROUP PLC
GROUP CASH FLOW STATEMENT (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months to Six months to Year to 31
30 June 30 June December
Note 2007 2006 2006
£000 £000 £000
Net cash
(outflow)/infl
ow from
operating
activities 9 (2,518) (2,291) 160
-------- -------- --------
Investing activities
Interest
received 11 - 9
Disposal of
subsidiary
undertaking 7 - 2,174 2,102
Acquisition of
subsidiary
undertaking - - (1,262)
Proceeds on
disposal of
property,
plant and
equipment 29 1,522 1,472
Purchases of
property,
plant and
equipment (288) (417) (604)
-------- -------- --------
-------- -------- --------
Net cash (used
in)/from
investing
activities (248) 3,279 1,717
-------- -------- --------
Financing activities
Dividends paid (1,125) (1,125) (1,125)
Repayments of
obligations
under finance
leases (23) (253) (268)
Increase/(decr
ease) in bank
overdrafts 3,370 (462) (83)
-------- -------- --------
-------- -------- --------
Net cash used
in financing
activities 2,222 (1,840) (1,476)
-------- -------- --------
Net decrease
in cash and
cash
equivalents (544) (852) 401
Cash and cash
equivalents at
beginning of
period 2,195 1,794 1,794
-------- -------- --------
======== ======== ========
Cash and cash
equivalents at
end of period 1,651 942 2,195
======== ======== ========
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
1. General information
The information for the year ended 31 December 2006 does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985, but has
been extracted from the Group's statutory accounts which have been filed with
the Registrar of Companies. The auditors' report on these statutory accounts was
unqualified pursuant to Section 235 of the Companies Act 1985 and did not
contain a statement under sub-section 237 of that Act.
2. Basis of preparation
These interim financial statements for the six months ended 30 June 2007 have
been prepared on the basis of the accounting policies set out in the Group's
2006 statutory accounts and which were approved by the Board of Directors on 11
September 2007. The Group has not applied IAS 34 'Interim Financial Reporting'
which is not mandatory for UK groups in the preparation of these interim
financial statements. The financial statements have been prepared in accordance
with the recognition and measurement criteria of IFRS and the disclosure
requirements of the Listing Rules. The interim financial statements are
unaudited but have been formally reviewed by the auditors and their report to
the Company is set out on page 4.
The interim report will be sent to shareholders on 17 September 2007 and be
available to members of the public at the Company's Registered Office, 21 Newton
Place, Glasgow G3 7PY from 19 September 2007.
3. Segmental information
The Group's activities are centred around two principal activities, with those
Manufacturing Operations being classified as discontinued in the current and
prior years disclosed separately.
(i) Packaging Distribution
The distribution of packaging materials from a network of 16 Regional
Distribution Centres in the UK.
(ii) Manufacturing Operations
The manufacture and supply of self-adhesive and re-sealable labels and
plastic-injection moulded products to a variety of FMCG customers in the UK and
Europe and the manufacture, assembly and supply of timber, corrugated and foam
based packaging materials in the UK and US/Mexico.
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
3. Segmental information (continued)
Packaging Distribution Six months to Six Months to Year to 31
------------------------ 30 June 30 June 2006 December 2006
2007
---
£000 £000 £000
Revenue 44,329 38,491 80,853
Cost of sales (30,793) (26,984) (56,650)
-------- --------- --------
Gross profit 13,536 11,507 24,203
Net operating
expenses (13,268) (11,982) (23,767)
-------- --------- --------
Operating
profit/(loss) 268 (475) 436
======== ========= ========
Manufacturing Operations Six months to Six Months to Year to 31
-------------------------- 30 June 30 June 2006 December 2006
2007
---
£000 £000 £000
Revenue 13,060 12,758 25,460
Cost of sales (8,185) (8,035) (15,872)
-------- --------- --------
Gross profit 4,875 4,723 9,588
Net operating
expenses (4,404) (4,434) (8,017)
-------- --------- --------
Operating
profit 471 289 1,571
======== ========= ========
Trading results Six months to Six Months to Year to 31
30 June 30 June 2006 December 2006
2007
Group segment £000 £000 £000
Packaging
Distribution 44,329 38,491 80,853
Manufacturing
Operations 13,060 12,758 25,460
-------- --------- --------
Revenue cont
inuing
operations 57,389 51,249 106,313
======== ========= ========
Packaging
Distribution 268 (475) 436
Manufacturing
Operations 471 289 1,571
-------- --------- --------
Operating
profit/(loss)
continuing
operations 739 (186) 2,007
======== ========= ========
Net assets 30 June 30 June 2006 31 December
2006
2007
Group segment £000 £000 £000
Packaging
Distribution 16,729 11,784 16,425
Manufacturing
Operations 6,787 13,943 13,400
-------- --------- --------
Continuing
operations 23,516 25,727 29,825
Discontinued
operations 4,598 - -
-------- --------- --------
Net assets 28,114 25,727 29,825
======== ========= ========
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
4. Finance costs Six months to Six Months to Year to 31
30 June 30 June 2006 December 2006
2007
£000 £000 £000
Interest on
bank loans and
overdrafts (206) (305) (292)
Interest on
obligations
under finance
leases (4) (8) (12)
Interest cost
of pension
scheme
liabilities (1,548) (1,503) (2,992)
-------- --------- ---------
-------- --------- ---------
Total finance
costs (1,758) (1,816) (3,296)
-------- --------- ---------
Expected
return on
pension scheme
assets 1,453 1,364 2,631
Investment
income 19 198 131
-------- --------- ---------
Total
investment
income 1,472 1,562 2,762
-------- --------- ---------
-------- --------- ---------
Net finance
costs (286) (254) (534)
5. Tax Six months to Six Months to Year to 31
30 June 30 June December 2006
2007 2006
£000 £000 £000
Current tax
UK corporation
tax - - (57)
Overseas
taxation (21) (51) (86)
Prior year 65 - 186
-------- --------- --------
Current tax 44 (51) 43
Deferred tax (231) (227) (358)
-------- --------- --------
Total (187) (278) (315)
======== ========= ========
Corporation tax has been provided for the period to 30 June 2007, reflecting the
expected tax rate for the full year on overseas earnings. The deferred tax
charge of £231,000 relates to the pension deficit and includes a charge in
respect of the reduction in the long-term rate of corporation tax from 30% to
28% with effect from 31 March 2008. No tax has been provided on the UK results,
reflecting the expected tax rate for the full year.
6. Dividends Six months to Six Months to Year to 31
30 June 30 June December 2006
2007 2006
£000 £000 £000
Amounts recognised as distributions
to equity holders in the period
Final dividend
in respect of
the year ended
31 December
2006 (1.00p
per
share) (2006
Interim 1.00p
per share) 1,125 1,125 1,125
======== ========= ========
Dividends are not payable on shares held in the employee share trust.
The interim dividend payable on 25 October 2007 was declared on 11 September
2007 and has therefore not been included as a liability in these financial
statements.
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
7. Discontinued operations
The results for current and comparative periods are as follows:-
Six months to Six Months to Year to
30 June 30 June
2007 2006 31 December
2006
£000 £000 £000
Revenue 10,836 13,154 23,753
Cost of sales (7,183) (8,921) (15,977)
-------- --------- ---------
Gross profit 3,653 4,233 7,776
Net operating
expenses (3,742) (4,096) (7,537)
-------- --------- ---------
Operating
(loss)/profit (89) 137 239
Net interest paid (100) (115) (197)
Impairment loss on
remeasurement of
discontinued
operations (1,800) - -
Gain on disposal of
subsidiary
undertaking - 920 849
-------- --------- ---------
(Loss)/profit before
tax (1,989) 942 891
Tax - 48 2
-------- --------- ---------
Post-tax
(loss)/profit from
discontinued
operations (1,989) 990 893
======== ========= =========
Non-current assets held for sale
The major classes of assets and liabilities comprising the operations classified
as held for sale at 30 June 2007 are as follows:-
30 June
2007
£000
Property, plant and equipment 2,078
Inventories 1,148
Trade and other receivables 4,162
Cash and cash equivalents 761
--------
Total assets classified as held for sale 8,149
Total liabilities associated with assets classified as held for sale (3,551)
--------
Net assets classified as held for sale 4,598
========
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
7. Discontinued operations (continued)
In January 2006, the Group's Hungarian subsidiary was sold, with the resultant
gain on disposal being disclosed in the financial statements for 2006. The
amounts treated as disposed of in the comparative periods are as follows:-
Six Months to Year to
30 June
2006 31 December
2006
£000 £000
Cash consideration (net of attributable
expenses) 2,174 2,102
Deferred consideration 186 187
--------- ---------
Total consideration (net of attributable
expenses) 2,360 2,289
--------- ---------
Assets sold 1,925 1,925
Liabilities directly associated with assets
held for sold (485) (485)
--------- ---------
--------- ---------
1,440 1,440
--------- ---------
--------- ---------
Gain on disposal of subsidiary undertaking 920 849
========= =========
8. Earnings/(loss) per share Six months to Six Months to Year to
30 June 30 June
2007 2006 31 December
2006
Earnings £000 £000 £000
Earnings from
continuing and
discontinued
operations for the
purposes of earnings
per share being net
profit attributable
to equity holders of
the parent (1,723) 272 2,051
Add/(less):
Loss/(profit) for
the year from
discontinued
operations 1,989 (990) (893)
-------- -------- ---------
Earnings/(loss) from
continuing
operations for the
purposes of earnings
per share being net
profit/(loss)
attributable to
equity holders of
the parent 266 (718) 1,158
30 June 30 June 31 December
2006
2007 2006
Weighted average
number of ordinary
shares in issue '000 115,019 115,019 115,019
Own shares in
Employee Share
Ownership Trusts
'000 (2,491) (2,491) (2,491)
-------- -------- ---------
Weighted average
number of shares in
issue for the 112,528 112,528 112,528
Purposes of basic earnings per share
'000
Effect of dilutive
potential ordinary
shares due to share
options 192 970 601
-------- -------- ---------
======== ======== =========
Weighted average
number of shares in
issue for the 112,720 113,498 113,129
Purposes of diluted earnings per
share '000 ======== ======== =========
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
9. Notes to the cash flow statement Six months to Six Months to Year to 31
30 June 30 June December 2006
2007 2006
£000 £000 £000
Operating
profit/(loss)
Continuing
operations 739 (186) 2,007
Discontinued
operations (89) 137 239
-------- -------- ---------
Profit/(loss)
from
operations 650 (49) 2,246
Adjustments for:
Depreciation
of property,
plant and
equipment 1,048 1,521 2,136
Gain on
disposal of
property,
plant and
equipment (24) (2) (191)
-------- -------- ---------
Operating cash
flows before
movements in
working
capital 1,674 1,470 4,191
Decrease/(incr
ease) in
inventories 402 (213) (681)
(Increase)/dec
rease in
receivables (1,834) (913) 58
Decrease in
payables (1,338) (1,296) (999)
Adjustment for
pension scheme
funding (736) (736) (1,630)
-------- -------- ---------
Cash generated
by operations (1,832) (1,688) 939
Income taxes
paid (389) (123) (195)
Interest paid (297) (480) (584)
-------- -------- ---------
Net cash
(outflow)/infl
ow from
operating
activities (2,518) (2,291) 160
======== ======== =========
Cash outflows in respect of the discontinued operations for operating activities
amounted to £509,000 for 2007 (2006, Inflow of £83,000 in the six months to 30
June 2006 and an inflow of £1,277,000 for the year to 31 December 2006). Cash
outflows in respect of investing activities totalled £121,000 (2006, £65,000 in
the six months to 30 June 2006 and £440,000 for the year to 31 December 2006).
Six months to Six Months to Year to 31
30 June 30 June December 2006
2007 2006
Movement in
net debt £000 £000 £000
(Decrease)/inc
rease in cash
and cash
equivalents in
period (544) (852) 401
(Increase)/dec
rease in bank
overdrafts (3,370) 462 83
Cash flows
from debt and
lease
financing 23 253 268
-------- -------- ---------
Movement in
net debt in
the year (3,891) (137) 752
Opening net
debt (5,651) (6,403) (6,403)
-------- -------- ---------
Closing net
debt (9,542) (6,540) (5,651)
======== ======== =========
Net debt comprises:-
Cash and cash
equivalents 890 942 2,195
Cash and cash
equivalents in
business held
for resale 761 - -
Bank
overdrafts in
business held
for resale (10) - -
Bank
overdrafts and
loans (11,107) (7,368) (7,747)
Obligations
under finance
leases (76) (114) (99)
-------- -------- ---------
Closing net
debt (9,542) (6,540) (5,651)
======== ======== =========
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank and other short-term highly
liquid investments with maturity of three months or less.
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
10. Retirement benefit obligations
The figures below have been based on the results of the triennial actuarial
valuation as at 1 May 2005, updated to 30 June 2007, 31 December 2006 and 30
June 2006. The assets in the scheme, the net liability position of the scheme as
calculated under IAS 19 and the principal assumptions were:
30 June 30 June 31 December
2007 2006 2006
£000 £000 £000
Fair value of assets 44,143 41,037 43,630
Present value of scheme liabilities (57,323) (61,072) (59,503)
-------- --------- --------
Pension scheme deficit (13,180) (20,035) (15,873)
Deferred tax asset 3,689 6,011 4,762
-------- --------- --------
Pension scheme deficit net of related
deferred (9,491) (14,024) (11,111)
tax asset ======== ========= ========
The scheme's liabilities were calculated on the following bases as required
under IAS 19:
Assumptions 30 June 2007 30 June 2006 31 December 2006
Discount rate 5.80% 5.25% 5.25%
Rate of increase in salaries 3.20% 3.00% 2.75%
Rate of increase in pensions in 3% or 5% 3% or 5% 3% or 5%
payment for fixed for fixed for fixed
increases increases increases
or 3.20% for or 2.75% for or 2.75% for
LPI LPI LPI
Inflation
assumption 3.20% 3.00% 2.75%
Life expectancy beyond normal
retirement date of 65
Male 19.5 19.5 19.5
Female 22.4 22.4 22.4
Six months to Six Months to Year to
30 June 30 June
2007 2006 31 December
2006
Movement in scheme
deficit in the
period £000 £000 £000
At start of period (15,873) (22,977) (22,977)
Current service cost (149) (221) (353)
Employer
contributions 798 1,116 1,925
Curtailment gains 84 - 58
Net finance costs (95) (139) (361)
Actuarial gain in
the period 2,055 2,186 5,835
-------- --------- ---------
At end of period (13,180) (20,035) (15,873)
======== ========= =========
MACFARLANE GROUP PLC
SIX MONTHS ENDED 30 JUNE 2007
NOTES TO THE GROUP ACCOUNTS (UNAUDITED)
10. Retirement benefit obligations Six months to Six Months to Year to
(continued) 30 June 30 June
2007 2006 31 December
2006
Movement in assets
during the period £000 £000 £000
Assets at start of
period 43,630 40,776 40,776
Expected return on
assets 1,453 1,364 2,631
Actual less expected
return on assets (563) (1,542) 203
Employer
contributions 798 1,116 1,925
Employee
contributions 98 110 248
Benefits paid (1,273) (787) (2,153)
-------- --------- ---------
Assets at end of
period 44,143 41,037 43,630
======== ========= =========
Six months to 30 June Six Months to 30 June Year to
2007 2006 31 December
2006
Movement in
liabilities during
the period £000 £000 £000
Liabilities at start
of period (59,503) (63,753) (63,753)
Service costs (149) (221) (353)
Interest costs (1,548) (1,503) (2,992)
Curtailment gain 84 - 58
Employee
contributions (98) (110) (248)
Actuarial gain on
liabilities in the
period 2,618 3,728 5,632
Benefits paid 1,273 787 2,153
-------- --------- ---------
Liabilities at end
of period (57,323) (61,072) (59,503)
======== ========= =========
11. Deferred tax asset 30 June 30 June 31 December
2006
2007 2006
£000 £000 £000
Deferred tax asset on pension scheme
deficit at start of period 4,762 6,893 6,893
Charge on actuarial movement in the
period applied through statement of
recognised income and expense (842) (655) (1,751)
Charge through income statement based
on payments made to reduce deficit in
the period (231) (227) (380)
-------- --------- ---------
Deferred tax asset on pension scheme
deficit (see note 10) 3,689 6,011 4,762
Deferred tax liabilities on timing
differences (79) (205) (202)
-------- --------- ---------
Net deferred tax asset 3,610 5,806 4,560
======== ========= =========
This information is provided by RNS
The company news service from the London Stock Exchange
Tuesday, 14th May 2024
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