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Andrews Sykes Group (ASY)

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Wednesday 30 September, 2015

Andrews Sykes Group

Half Yearly Report

RNS Number : 6263A
Andrews Sykes Group PLC
30 September 2015
 

Andrews Sykes Group plc

 

Interim financial statements 2015

 

 

Summary of results

for the six months ended 30 June 2015

 

 

(Unaudited)

 

6 months ended

 30 June 2015

6 months ended

 30 June 2014

 

£'000

£'000

 

 

 

Revenue from continuing operations

28,240

26,759

EBITDA* from continuing operations

7,293

6,495

Operating profit

4,973

4,349

Profit for the financial period

3,732

3,206

Basic earnings per share (pence)

8.83p

7.59p

Interim dividends declared per equity share (pence)

11.90p

11.90p

Prior year final dividend declared per equity share (pence)

11.90p

11.90p

Net funds

13,505

15,291

 

                

                

 

 

*       Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-recurring items.

 

 

 

For further information please contact:

 

Andrews Sykes Group plc

Paul Wood, Group Managing Director

Andrew Phillips, Chief Financial Officer

 

+44 (0) 1902 328700

 



Altium (Nominated adviser)

Paul Lines

Adam Sivner

+44 (0) 845 505 4343



Arden Partners plc (Broker)

Steve Douglas

+44 (0) 20 7614 5920

 

 

 

 

 

 

Chairman's Statement

 

Overview

The group produced a successful result for the first half of 2015, the winter months created some good opportunities for our heating and boiler hire products and this was further enhanced by continued stability within the construction sector. Overall, the group's revenue for the six months ended 30 June 2015 was £28.2 million, an increase of £1.5 million compared with the same period last year. As a consequence operating profit increased by £0.7 million from £4.3 million in the first half of 2014 to £5.0 million for the six months ended 30 June 2015.

The group continues to be profitable and cash generative. Cash generated from operations was £5.0 million (2014: £4.2 million) and although net funds decreased by £3.3 million from £16.8 million as at 31 December 2014 to £13.5 million as at 30 June 2015 this was after paying the 2014 final dividend of 11.90 pence per share, or £5.0 million in total, during the period.

Management continue to safeguard the operational structure of the business. Cash spent on new plant and equipment, primarily hire fleet assets, amounted to £1.7 million and a further £1.0 million from stock was also added to the hire fleet. We have continued our policy of pursuing organic growth within our market sectors and start up costs of the new businesses discussed in previous Strategic Reports continue to be expensed as incurred. A new depot in Lyon has been opened in the first half of 2015 and continuing investment in both our existing core businesses and the ongoing development of new operations and income streams will ensure that we remain in a strong position and will safeguard profitability into the future.

Operations review

Our main hire and sales business segment in the UK and Europe enjoyed some improved trading conditions during first half of 2015. The colder weather during the winter months provided good opportunity for our heating products, however our pumping activity decreased when compared to 2014, where the first few months recorded exceptional levels of rainfall with widespread flooding, this was not repeated in 2015. Demand for our air conditioning products was in line with previous years.

Following a disappointing result in 2014 our operations across the Benelux region have produced a strong recovery with significant growth on last year's performance. Our newly established businesses in France, Switzerland and Luxembourg continue to trade in line with our expectations.

Andrews Air Conditioning & Refrigeration, our UK air conditioning installation business, produced an operating profit that was £0.1 million ahead of the level achieved last year.

Khansaheb Sykes, our long established business based in the UAE, had a strong start to the year, with improvements in both Dubai and Abu Dhabi involving our traditional dewatering, sewage and general pump hire activities. The climate rental division that was started in 2012 also continues to make a positive contribution. Overall, the operating profit of Khansaheb Sykes was £0.5 million ahead of the same period last year.

Profit for the financial period and Earnings per Share

Profit before tax was £4.7 million (2014: £4.1 million) reflecting both the above £0.7 million increase in operating profit and an increase in net finance costs of £0.1 million compared with the same period in 2014. Net finance costs increased primarily due to an inter company foreign exchange loss of £0.4 million, compared with a loss of £0.3 million in 2014, due to the continued strengthening of Sterling compared mainly with the Euro during the period.

Despite the increase in profits before tax, the tax charge remained virtually unchanged at £0.9 million for the six months ended 30 June 2015. This is due to a decrease in the group's effective tax rate from 22.7% for the six months ended 30 June 2014 to 20.2% in the current period which is mainly attributable to (i) a 1.25% reduction in the UK annualised effective tax rate and (ii) an increase in the mix of profits earned in low tax regions overseas. A reconciliation of the theoretical corporation tax charge based on the accounts profit multiplied by the UK annualised corporation tax rate of 20.25% and the actual tax charge is given in note 4 of these interim accounts.

Profit after tax was £3.7 million (2014: £3.2 million) and consequently the basic earnings per share increased by 1.24 pence, or 16.3%, from 7.59 pence for the first half of 2014 to 8.83 pence for the period under review. There were no share buy-backs in the period. 

Dividends

The final dividend of 11.90 pence per ordinary share for the year ended 31 December 2014 was approved by members at the AGM held on 16 June 2015. Accordingly on 19 June 2015 the company made a total dividend payment of £5,029,000 which was paid to shareholders on the register as at 29 May 2015.

The board continues to adopt the policy of returning value to shareholders whenever possible. The group remains profitable, cash generative and financially strong. Accordingly the board has decided to declare an interim dividend for 2015 of 11.90 pence per share which in total amounts to £5,029,000. This will be paid on 4 November 2015 to shareholders on the register as at 9 October 2015. The shares will go ex-dividend on 8 October 2015.

Preparation of the year end accounts

Following a change in the financial reporting framework applicable to all UK groups with effect from the start of the current year, the parent company accounts of Andrews Sykes Group plc will be prepared in accordance with this new framework this year. There are no changes to the preparation of the group's consolidated financial statements. Further details of the new framework are set out in note 11 of these interim accounts.

Outlook

Trading in the third quarter to date has been positive. Europe experienced a period of hot weather during the early part of July which stimulated a high demand for air conditioning products. Although this was short lived in the UK, our operations across mainland Europe enjoyed a hot summer with prolonged periods of above average temperatures. Activity in the Middle East has remained consistent through the summer period, with trading levels ahead of last year in both Sharjah and Abu Dhabi.

The board remains cautiously optimistic that the group will return an improved performance for the full year. 

 

 

 

 

JG Murray

Chairman

 

 


29 September 2015

 

 



Consolidated income statement

for the 6 months ended 30 June 2015 (unaudited)

 

 

6 months ended

30 June

2015

£'000

 

6 months ended

30 June 2014

£'000

 

         12 months

                ended

     31 December

                  2014

                 £'000

Continuing operations

 

 

 

 

 

 

 

 

 

 

 

Revenue

28,240

 

26,759

 

56,400

Cost of sales

(12,602)

 

 (12,116)

 

(24,101) 

 

 

 

          

 

 

Gross profit

15,638

 

14,643

 

32,299

 

 

 

          

 

 

Distribution costs

(5,343)

 

(5,061)

 

(10,410)

Administrative expenses

(5,322)

 

(5,233)

 

(10,578)

 

 

 

          

 

 

Operating profit

4,973

 

           4,349

 

11,311

 

 

 

 

 

 

EBITDA*

Depreciation and impairment losses

Profit on the sale of plant and equipment

7,293

(2,531)

211

 

 6,495

(2,301)

155

 

15,569

(4,563)

305

Operating profit

4,973

 

4,349

 

11,311

 

 

 

          

 

 

 

 

 

             

 

 

Income from trade investments

-

 

-

 

517

Finance income

145

 

178

 

342

Finance costs

(84)

 

(93)

 

(192)

Intercompany foreign exchange gains and losses

(355)

 

(286)

 

(222)

Profit before taxation

4,679

 

           4,148

 

11,756

 

 

 

 

 

 

Taxation

(947)

 

            (942)

 

(2,445)

 

 

 

 

 

 

Profit for the financial period

3,732

 

           3,206

 

9,311

 

 

 

 

 

 

There were no discontinued operations in either of the above periods

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations

 

 

 

 

 

 

 

 

 

 

Basic and diluted (pence)

8.83p

 

7.59p

 

22.03p

 

 

 

 

 

 

Dividends paid for the period per equity share (pence)

-

 

-

 

11.90p

 

 

 

 

 

 

Proposed dividend for the period per equity share (pence)

11.90p

 

11.90p

 

11.90p

 

 

*  Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-

   recurring items.

 

 

Consolidated balance sheet

as at 30 June 2015 (unaudited)

 

 

 

 

30 June 2015

 

30 June 2014

 

31 December 2014

 

 

 

         £'000

 

        £'000

 

         £'000

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

 

 

16,187

 

       15,524

 

16,388

Lease prepayments

 

 

51

 

              52

 

51

Trade investments

 

 

164

 

            164

 

164

Deferred tax asset

 

 

495

 

            627

 

626

Retirement benefit pension surplus

 

 

1,695

 

         1,681

 

1,253

 

 

 

18,592

 

       18,048

 

18,482

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Stocks

 

 

5,002

 

         4,592

 

4,618

Trade and other receivables

 

 

15,031

 

       14,772

 

14,348

Overseas tax (denominated in Euros)

 

 

195

 

            547

 

133

Cash and cash equivalents

 

 

19,697

 

       22,559

 

24,077

 

 

 

39,925

 

       42,470

 

43,176

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

(10,716)

 

      (10,355)

 

(10,963)

Current tax liabilities

 

 

(1,149)

 

        (1,308)

 

(1,321)

Bank loans

 

 

(980)

 

           (980)

 

(980)

Obligations under finance leases

 

 

(101)

 

           (114)

 

(114)

Provisions

 

 

(2)

 

             (13)

 

(9)

 

 

 

(12,948)

 

       (12,770)

 

(13,387)

 

 

 

 

 

 

 

 

Net current assets

 

 

26,977

 

        29,700

 

29,789

 

 

 

 

 

 

 

 

Total assets less current liabilities

 

 

45,569

 

        47,748

 

48,271

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Bank loans

 

 

(4,985)

 

        (5,965)

 

(5,975)

Obligations under finance leases

 

 

(126)

 

           (209)

 

(162)

Provisions

 

 

-

 

              (2)

 

-

 

 

 

(5,111)

 

        (6,176)

 

(6,137)

 

 

 

 

 

 

 

 

Net assets

 

 

40,458

 

        41,572

 

42,134

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Called-up share capital

 

 

423

 

            423

 

423

Share premium

 

 

13

 

              13

 

13

Retained earnings

 

 

38,331

 

       38,828

 

39,295

Translation reserve

 

 

1,436

 

         2,053

 

2,148

Other reserves

 

 

245

 

            245

 

245

 

 

 

 

 

 

 

 

Surplus attributable to equity holders of the parent

40,448

 

        41,562

 

       42,124

 

 

 

 

 

 

 

 

Minority interest

 

 

10

 

              10

 

10

 

 

 

 

 

 

 

 

Total equity

 

 

40,458

 

        41,572

 

42,134

 



Consolidated cash flow statement

for the six months ended 30 June 2015 (unaudited)

 

 

6 months

               ended

     30 June

                  2015

 

          6 months

                ended

     30 June

                   2014

 

 

          12 months

                ended

     31 December
2014

 

                     £'000

 

                   £'000

 

                   £'000

Cash flows from operating activities

 

 

 

 

 

Cash generated from operations

4,996

 

                      4,205

 

13,222

Interest paid

(86)

 

                        (86)

 

(166)

Net UK corporation tax paid

(951)

 

                   (1,220)

 

(2,268)

Net withholding tax paid

-

 

                           -

 

(47)

Overseas tax paid

(190)

 

                      (291)

 

(120)

 

 

 

 

 

 

Net cash inflow from operating activities

3,769

 

                      2,608

 

10,621

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Dividends received from trade investments

-

 

                            -

 

517

Sale of property, plant and equipment

335

 

                         252

 

511

Purchase of property, plant and equipment

(1,711)

 

                   (1,256)

 

(3,727)

Interest received

100

 

                         126

 

270

Net cash outflow from investing activities

(1,276)

 

                      (878)

 

(2,429)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Loan repayments

(1,000)

 

                   (1,000)

 

(1,000)

Finance lease capital repayments

(49)

 

                        (46)

 

(93)

Equity dividends paid

(5,029)

 

                   (5,029)

 

(10,058)

Net cash outflow from financing activities

(6,078)

 

                   (6,075)

 

(11,151)

 

 

 

 

 

 

Net decrease in cash and cash equivalents

(3,585)

 

 (4,345)

 

(2,959)

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the period

24,077

 

27,417

 

27,417

Effect of foreign exchange rate changes

(795)

 

(513)

 

(381)

 

 

 

 

 

 

Cash and cash equivalents at end of the period

19,697

 

22,559

 

24,077

 

 

 

 

 

 

 

 

Reconciliation of net cash flow to movement in net funds in the period

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

(3,585)

 

(4,345)

 

(2,959)

Net cash outflow from the decrease in debt

1,049

 

1,046

 

1,093

Non-cash movements in respect of costs of raising loan finance

 

(10)

 

 

 (10)

 

 

(20)

Decrease in net funds during the period

(2,546)

 

                 (3,309)

 

(1,886)

Opening net funds at the beginning of the period

16,846

 

                  19,113

 

19,113

Effect of foreign exchange rate changes

(795)

 

                    (513)

 

(381)

Closing net funds at the end of the period

13,505

 

                  15,291

 

16,846

 

 

 

 

 

 

 



Consolidated statement of comprehensive total income (CSOCTI)

for the six months ended 30 June 2015 (unaudited)

 

 

6 months

ended
30 June
2015

6 months

ended
30 June
2014

12 months

ended
31 December
2014

 

£'000

£'000

£'000

 

 

 

 

Profit for the financial period

3,732

3,206

9,311


             

             

             

Other comprehensive (charges) / income:

 

 

 

 

Items that may be reclassified to profit and loss:

 

 

 

Currency translation differences on foreign currency net investments

(712)

(406)

(312)


 

 

 

Items that will never be reclassified to profit and loss:

 

 

 

Remeasurement of defined benefit liabilities and assets

416

(41)

(802)

Related deferred tax

(83)

 8

160


             

             

             

Other comprehensive charges for the period net of tax

(379)

(439)

(954)


             

             

             

Total comprehensive income for the period

3,353

2,767

8,357

 

                

                

                

 

 

 



Notes to the consolidated interim financial statements

for the six months ended 30 June 2015

 

1              General information

Basis of preparation

These interim financial statements have been prepared in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Companies Act 2006.

The information for the 12 months ended 31 December 2014 does not constitute the group's statutory accounts for 2014 as defined in Section 434 of the Companies Act 2006. Statutory accounts for 2014 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These interim financial statements, which were approved by the Board of Directors on 29 September 2015, have not been audited or reviewed by the auditors.

The interim financial statement has been prepared using the historical cost basis of accounting except for:

(i)      properties held at the date of transition to IFRS which are stated at deemed cost;

(ii)     assets held for sale which are stated at the lower of fair value less anticipated disposal costs and carrying value; and

(iii)    derivative financial instruments (including embedded derivatives) which are valued at fair value.

Functional and presentational currency

The financial statements are presented in pounds Sterling because that is the functional currency of the primary economic environment in which the group operates.

2              Accounting policies

These interim financial statements have been prepared on a consistent basis and in accordance with the accounting policies set out in the group's Annual Report and Financial Statements 2014.

3              Revenue

An analysis of the group's revenue is as follows:

 

6 months

ended

30 June

2015

£'000

 

6 months

ended

30 June

2014

£'000

 

12 months

ended

31 December

 2014

£'000

Continuing operations

 

 

 

 

 

Hire

22,996

 

21,501

 

45,688

Sales

3,186

 

3,232

 

6,764

Installations

2,058

 

2,026

 

3,948


 

 

 

 

 

Group consolidated revenue from the sale of goods and provision

of services

 

28,240

 

 

26,759

 

 

56,400

The geographical analysis of the group's revenue by origination is:

 

6 months

ended

 30 June

     2015

 

6 months

ended

30 June

2014

 

12 months

ended

31 December

 2014

 

                  £'000

 

£'000

 

£'000

 

 

 

 

 

 

United Kingdom

19,239

 

19,814

 

40,987

Rest of Europe

3,989

 

3,703

 

7,947

Middle East and Africa

5,012

 

3,242

 

7,466


 

 

 

 

 


28,240

 

26,759

 

56,400

4              Taxation

 

6 months

ended

 30 June

     2015

 

6 months

ended

30 June

2014

 

12 months

ended

31 December

 2014

 

                  £'000

 

£'000

 

£'000

Current tax

 

 

 

 

 

UK corporation tax at 20.25% (30 June 2014 and 31 December 2014:  21.5%)

 

779

 

                      

929

 

 

2,111

Adjustments in respect of prior periods

-

 

                          -

 

(119)


779

 

                       929

  

1,992

Overseas tax

120

 

                         14

 

261

Adjustments to overseas tax in respect of prior periods

-

 

                           -

 

(7)

Withholding tax

-

 

                           -

 

47

Total current tax charge

899

 

                       943

 

2,293


 

 

 

 

 

Deferred tax

 

 

 

 

 

Deferred tax on the origination and reversal of temporary differences

48

 

                         (1)

 

91

Adjustments in respect of prior periods

-

 

                           -

 

61

Total deferred tax charge

48

 

                         (1)

 

152


 

 

 

 

 

Total tax charge for the financial period attributable to

continuing operations

 

947

 

 

                       942

 

 

2,445

 

 

The tax charge for the financial period can be reconciled to the profit before tax per the income statement multiplied by the effective standard annualised corporation tax rate in the UK of 20.25% (30 June 2014 and 31 December 2014: 21.5%) as follows:

 

6 months

ended

30 June

2015

 

6 months

 ended

30 June

2014

 

12 months

ended

31 December

 2014

 

£'000

 

£'000

 

                 £'000

 

 

 

 

 

 

Profit before taxation from continuing and total operations

4,679

 

                4,148

 

11,756


 

 

 

 

 

Tax at the UK effective annualised corporation tax rate of 20.25%

  (30 June 2014 and 31 December 2014: 21.5%)

 

947

 

                     

892

 

 

2,528

Effects of:

 

 

 

 

 

Expenses not deductible for tax purposes

58

 

                      53

 

78

Movement in overseas trading losses

122

 

                    106

 

207

Effect of different tax rates of subsidiaries operating abroad

(180)

 

                  (109)

 

(232)

Withholding tax

-

 

                         -

 

47

Non-taxable income from other participating interests

-

 

 -

 

(111)

Effect of change in rate of corporation tax

-

 

-

 

(7)

Adjustments to tax charge in respect of previous periods

-

 

                          -

 

(65)

Total tax charge for the financial period

947

 

                   942

 

2,445

 

 

 

 

 

 

The total effective tax charge for the financial period represents the best estimate of the weighted average annual effective tax rate expected for the full financial year applying tax rates that have been substantively enacted by the balance sheet date.  Accordingly UK corporation tax has been provided at 20.25%; the reduction to 20% for the tax year ending 31 March 2016 having been substantially enacted on 2 July 2013.  UK deferred tax has been provided at 20% being the rate substantially enacted at the balance sheet date at which the timing differences are expected to reverse. 

5              Earnings per share

Basic earnings per share

The basic figures have been calculated by reference to the weighted average number of ordinary shares in issue and the earnings as set out below.  There are no discontinued operations in any period.

 

 

6 months ended 30 June 2015

 

Continuing

earnings

Number of

Shares


£'000

 


 

 

Basic earnings/weighted average number of shares

3,732

42,262,082

 

 

 

Basic earnings per ordinary share (pence)

8.83p

 

 

 

 

 

 

6 months ended 30 June 2014

 

Continuing

earnings

Number of

shares


£'000

 


 

 

Basic earnings/weighted average number of shares

3,206

42,262,082

 

 

 

Basic earnings per ordinary share (pence)

  7.59p

 

 

 

 

 

 

     12 months ended 31 December 2014

 

Continuing

earnings

Number of

shares


£'000

 


 

 

Basic earnings/weighted average number of shares

9,311

42,262,082

 

 

 

Basic earnings per ordinary share (pence)

22.03p

 

Diluted earnings per share

There were no dilutive instruments outstanding at 30 June 2015 or either of the comparative periods and, therefore, there is no difference in the basic and diluted earnings per share for any of these periods.  There were no discontinued operations in any period.

6              Dividend payments

Dividends declared and paid on ordinary one pence shares during the 6 months ended 30 June 2015 were as follows:

 

Paid in the 6 months ended 30 June 2015

 

Pence per share

Total dividend
paid


 

£'000


 

 

Final dividend for the year ended 31 December 2014 paid to members on the register on 29 May 2015 on 19 June 2015

 

11.90p

 

5,029

 

 

 

The above dividend was charged against reserves during the 6 months ended 30 June 2015.

On 29 September 2015 the directors declared an interim dividend of 11.90 pence per ordinary share which in total amounts to £5,029,000.  This will be paid on 4 November 2015 to shareholders on the register on 9 October 2015 and will be charged against reserves in the second half of 2015.

Dividends declared and paid on ordinary one pence shares during the 6 months ended 30 June 2014 were as follows:

 

Paid in the 6 months ended 30 June 2014

 

Pence per share

Total dividend
declared


 

£'000


 

 

Final dividend for the year ended 31 December 2013 paid to members on the register on 30 May 2014 on 19 June 2014 

 

11.90p

 

5,029

 

 

 

The above dividend was charged against reserves during the 6 months ended 30 June 2014.

Dividends declared and paid on ordinary one pence shares during the 12 month period ended 31 December 2014 were as follows:

 

Paid in the 12 months ended

31 December 2014

 

Pence per share

Total dividend
paid


 

£'000


 

 

Final dividend for the year ended 31 December 2013 paid to members on the register on 30 May 2014 on 19 June 2014 

 

  11.90p

 

5,029

Interim dividend declared on 25 September 2014 and paid to shareholders on the register as at 7 November 2014 on 2 December 2014

 

11.90p

 

5,029

 

23.80p

10,058

The above dividends were charged against reserves during the 12 months ended 31 December 2014.

7              Retirement benefit obligations - Defined benefit pension scheme

The group closed the UK group defined benefit pension scheme to future accrual as at 29 December 2002. The assets of the defined benefit pension scheme continue to be held in a separate trustee administered fund.

As at 30 June 2015 the group had a net defined benefit pension scheme surplus, calculated in accordance with IAS 19 (revised) using the assumptions as set out below, of £1,695,000 (30 June 2014: £1,681,000;  31 December 2014: £1,253,000). The asset has been recognised in the financial statements as the directors are satisfied that it is recoverable in accordance with IFRIC 14.

Following the triennial recalculation of the funding deficit as at 31 December 2013 a revised schedule of contributions and recovery plan was agreed with the pension scheme trustees in June 2014.  In accordance with this schedule of contributions, which is effective from 1 January 2014, the group made additional contributions in 2014 totalling £905,000 to remove the funding deficit calculated as at 31 December 2013 and this has now been eliminated. Accordingly, until the next funding valuation is agreed with the pension scheme trustees, the group does not expect to make any further contributions to the pension scheme, other than a contribution towards the expenses that has been capped at £120,000 per annum.

Assumptions used to calculate the scheme surplus

A qualified independent actuary has updated the results of the December 2013 full actuarial valuation (30 June 2014: December 2010 full actuarial valuation) to calculate the surplus as disclosed below.

The major assumptions used to determine the present value of the scheme's defined benefit obligation were:

 

 

30 June

2015

30 June

2014

31 December

2014

Rate of increase in pensionable salaries

Rate of increase in pensions in payment

Discount rate applied to scheme liabilities

Inflation assumption - RPI

Inflation assumption - CPI

Percentage of members taking maximum tax free lump sum on retirement

N/A

3.10%

3.60%

3.20%

2.20%

                     

90%

N/A

3.30%

4.20%

3.40%

2.40%

 

100%

N/A

3.00%

3.40%

3.10%

2.10%

 

90%

 

From 1 January 2011, the government amended the basis for statutory increases to deferred pensions and pensions in payment.  Such increases are now based on inflation measured by the Consumer Price Index (CPI) rather than the Retail Price Index (RPI).  Having reviewed the scheme rules and considered the impact of the change on this pension scheme, the directors consider that future increases to (i) all deferred pensions and (ii) Guaranteed Minimum Pensions accrued between 6 April 1988 and 5 April 1997 and currently in payment will be based on CPI rather than RPI.  Accordingly, this assumption was adopted as at 31 December 2010 and subsequently.

Assumptions regarding future mortality experience are set based on advice in accordance with published statistics.  The mortality table used at 30 June 2015 is 110% S1NA CMI2014 (30 June 2014:  110% S1NA CMI2013;  31 December 2014:  110% S1NA CMI2014) with a 1% per annum long term improvement for both males and females (30 June 2014: 1% males, 0.5% females; 31 December 2014: 1% males, 1% females).

The assumed average life expectancy in years of a pensioner retiring at the age of 65 given by the above tables is as follows:

 

 

30 June

2015

30 June

2014

31 December

2014

 

 

 

 

Male, current age 45

Female, current age 45

22.5 years

25.2 years

22.7 years

24.0 years

22.5 years

25.2 years

 

 

Valuations

 

The fair value of the scheme's assets, which are not intended to be realised in the short term and may be subject to significant change before they are realised, and the present value of the scheme's liabilities, which are derived from cash flow projections over long periods and are inherently uncertain, were as follows:


30 June

2015

£'000


30 June

2014

£'000


31 December

2014

£'000







Total fair value of plan assets

38,385


36,786


38,864

Present value of defined benefit funded obligation calculated in
 accordance with stated assumptions

 

(36,690)


 

(35,105)


 

(37,611)

Surplus in the scheme calculated in accordance with stated
 assumptions recognised in the balance sheet

 

1,695


 

1,681


 

1,253

The movement in the fair value of the scheme's assets during the period was as follows: 

 

 30 June

 2015

  £'000

 

30 June

 2014

  £'000

 

31 December

 2014

£'000


 

 

 

 

 

Fair value of plan assets at the start of the period

38,864

 

      35,707

 

35,707

Expected return on pension scheme assets

649

 

775

 

1,559

Actual return less expected return on pension scheme assets

(359)

 

              545

 

2,275

Employer contributions - normal 

60

 

540

 

905

Benefits paid   

(774)

 

 (727)

 

(1,455)

Administration expenses charged in the income statement

(55)

 

 (54)

 

(127)

 

 

 

 

 

 

Fair value of plan assets at the end of the period

38,385

 

36,786

 

38,864

 

 

 

 

 

 

The movement in the present value of the defined benefit obligation during the period was as follows:

 

30 June

2015

 

30 June

2014

 

31 December 2014

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Present value of defined benefit funded at the beginning of the period

(37,611)

 

(34,503)

 

(34,503)

Interest on defined benefit obligation

(628)

 

 (743)

 

(1,486)

Actuarial gain/(loss) recognised in the CSOCTI calculated in

accordance with stated assumptions

 

775

 

 

(586)

 

 

(3,077)

Benefits paid

774

 

727

 

1,455


 

 

 

 

 

Closing present value of defined benefit funded obligation calculated

in accordance with stated assumptions

 

(36,690)

 

 

 (35,105)

 

 

(37,611)

 

 

 

 

 

 

Amounts recognised in the income statement

The amounts credited / (charged) in the income statement were:

 

 

            30 June

                 2015

 

           30 June

               2014

 

   31 December

               2014

 

                  £'000

 

               £'000

 

               £'000

 

 

 

 

 

 

Expected return on pension scheme assets

649

 

                  775

 

1,559

Interest on pension scheme liabilities

(628)

 

 (743)

 

(1,486)

Net pension interest credit included within finance income

21

 

32

 

73

Scheme administration expenses

(55)

 

 (54)

 

(127)

Net pension charge in the income statement

(34)

 

 (22)

 

(54)

 

 

 

 

 

 

Actuarial gains and losses recognised in the consolidated statement of comprehensive total income (CSOCTI)

The amounts credited / (charged) in the CSOCTI were:

 

 30 June

 2015

 

   30 June

  2014

 

31 December

 2014

 

                 £'000

 

          £'000

   

               £'000

 

 

 

 

 

 

Actual return less expected return on pension scheme assets

(359)

 

545

 

2,275

Experience gains and losses arising on plan obligation

123

 

 (3)

 

383

Changes in demographic and financial assumptions underlying the

present value of plan obligations

 

652

 

 

 (583)

 

(3,460)

Actuarial gain/(loss) calculated in accordance with stated assumptions

recognised in the CSOCTI

 

416

 

 

 (41)

 

 

(802)

 

 

 

 

 

 

8              Called up share capital

 

 30 June

 2015

 

30 June

 2014

 

31 December

 2014

 

                £'000

 

           £'000

 

             £'000

Issued and fully paid:

 

 

 

 

 

42,262,082 ordinary shares of one pence each (30 June 2014 and 31 December 2014: 42,262,082 ordinary shares of one pence each)

 

                   423

 

 

               423

 

 

                423

 

 

 

 

 

 

The company did not buy back any shares for cancellation during the 6 months ended 30 June 2015 or either of the comparative periods.  The company did not issue any shares in the period or either of the comparative periods.  No share options were granted, forfeited or expired during any of the periods and there were no share options outstanding at any period end.

The company has one class of ordinary shares which carry no right to fixed income.

9              Cash generated from operations

 

6 months

ended

30 June

2015

 

6 months

ended

30 June

2015

 

12 months

ended

31 December 2015

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Profit for the period attributable to equity shareholders

3,732

 

3,206

 

9,311

Adjustments for:

 

 

 

 

 

Taxation charge

947

 

942

 

2,445

Finance costs

84

 

93

 

192

Finance income

(145)

 

(178)

 

(342)

Inter-company foreign exchange gains and losses

355

 

286

 

222

Income from trade investments

-

 

-

 

(517)

Profit on the sale of property, plant and equipment

(211)

 

(155)

 

(305)

Depreciation

2,531

 

2,301

 

4,563


 

 

 

 

 

EBITDA*

7,293

 

6,495

 

15,569


 

 

 

 

 

Excess of normal pension contributions compared with service and

administration expenses

 

(5)

 

 

 

(486)

 

 

(778)

Workings capital movements:

 

 

 

 

 

Stocks

(1,389)

 

(1,764)

 

(2,527)

Trade and other receivables

(660)

 

(122)

 

284

Trade and other payables

(236)

 

88

 

686

Provisions

(7)

 

(6)

 

(12)


 

 

 

 

 

Cash generated from operations

4,996

 

4,205

 

13,222

 

 

 

 

 

 

* Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-recurring items.

10           Analysis of net funds

 

 30 June

 2015

 

30 June

 2014

 

31 December

 2014

 

£'000

 

                     £'000

 

               £'000

 

 

 

 

 

 

Cash and cash equivalents per cash flow statement

19,697

 

22,559

 

24,077


 

 

 

 

 

Bank loans

(5,965)

 

(6,945)

 

(6,955)

Obligations under finance leases

(227)

 

 (323)

 

(276)

Gross debt

(6,192)

 

 (7,268)

 

(7,231)

Net funds

13,505

 

15,291

 

16,846

 

11     Adoption of Financial Reporting Standards (FRS) 101 and 102 - Reduced disclosure framework for parent and UK subsidiary company accounts

The group's consolidated financial statements for the year ended 31 December 2015 will continue to be prepared in accordance with European Union endorsed International Financial Reporting Standards (IFRSs) on a consistent basis with the previous financial year.

Last year, the parent company accounts of Andrews Sykes Group plc were prepared in accordance with the long established UK GAAP. With effect from accounting periods starting on or after 1 January 2015 this UK GAAP has been withdrawn and companies must prepare their financial statements either in accordance with new UK GAAP which, for Andrews Sykes Group plc, is essentially FRS 100, 101 and 102 or full IFRS.

Andrews Sykes Group plc has elected to prepare its parent company accounts in accordance with FRS 102 and to take advantage of the reduced disclosure framework permitted by paragraph 1.12 of that standard. Paragraph 1.11 requires the company to give shareholders the opportunity to object to the adoption of the reduced disclosure framework within a reasonable specified timeframe.

Any shareholder wishing to object to the adoption of the reduced disclosure framework set out in paragraph 1.12 of FRS 102 for the parent company accounts of Andrews Sykes Group plc should write to the Company Secretary at the company's registered office no later than 30 November 2015 setting out the reasons for any objection. Any letter received after 30 November 2015 will not be valid.

The group's UK subsidiary companies' accounts for the year ended 31 December 2015 will be prepared in accordance with the reduced disclosure framework of either FRS 101 or FRS 102 depending upon the circumstances relevant to each subsidiary.

12     Distribution of interim financial statements

Following a change in regulations in 2008, the company is no longer required to circulate this half year report to shareholders. This enables us to reduce costs associated with printing and mailing and to minimise the impact of these activities on the environment. A copy of the interim financial statements is available on the company's website, www.andrews-sykes.com.

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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