TIDMAPI
RNS Number : 6710Y
API Group PLC
03 December 2014
Press Release 3 December 2014
API Group plc
("API" or the "Group")
Interim Results
API Group plc (AIM:API), a leading manufacturer of specialist
foils and packaging materials, announces its interim results for
the six months ended 30 September 2014.
Highlights
-- Revenues of GBP56.4m, compared to GBP56.9m for first half
last year; 1.6% ahead at constant exchange rates
-- Operating profits, before exceptional items, GBP2.8m (2013:
GBP3.5m)
-- No exceptional items (2013: GBP0.3m)
-- Profit before tax GBP2.3m (2013: GBP2.9m pre-exceptional,
GBP2.6m post-exceptional)
-- Underlying diluted earnings per share 2.4p (2013: 3.8p)
-- Interim dividend increased by 7% to 0.75p, reflecting confidence
in Group's cash flow and prospects
-- Laminates and Foils Europe profits unchanged. Contribution
from Holographics turnaround offset by swing into losses
at Foils Americas on significantly reduced shipments to
metallic pigment customers
-- Capital additions of GBP3.2m (2013: GBP2.0m) to increase
capacity and capability in foils
-- Net debt of GBP5.7m (2013: GBP5.6m)
Commenting on the results, Andrew Turner, Group Chief Executive
of API Group plc, said:
"The downturn in the US foils business materially impacted the
Group's results for the half year. The positives are the strong
revenue performance at Laminates and resilience at Foils Europe in
the face of sluggish markets on the Continent, as well as the
profit turnaround at Holographics.
"Against a background of tough current trading, the on-going
capital investment programme in the foils businesses is designed to
increase capacity and efficiency, extend product capabilities and
improve longer term prospects for growth."
- Ends -
For further information:
API Group plc
Andrew Turner, Group Chief Executive Tel: +44 (0) 1625
650 334
Chris Smith, Group Finance Director www.apigroup.com
Numis Securities (Broker)
James Serjeant Tel: +44 (0) 20 7260
1000
www.numis.com
Cairn Financial Advisers (Nominated Adviser)
Tony Rawlinson / Avi Robinson Tel: +44 (0) 20 7148
7900
www.cairnfin.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Quincy Allan Tel: +44 (0) 20 7398
7710
quincy.allan@abchurch-group.com www.abchurch-group.com
REPORT ON THE INTERIM RESULTS
FOR THE 6 MONTH PERIOD ENDED 30 SEPTEMBER 2014
Group Income Statement
Group revenues for the six months to September 2014 were
GBP56.4m (2013: GBP56.9m), down on a reported basis by 0.9% but
ahead by 1.6% at constant exchange rates. Growth at Laminates was
offset by a decline in demand for metallic pigment products at
Foils Americas.
Gross margin, at 22.5%, was 2.6% lower than last year's first
half, due to a change in the mix of sales between the divisions and
within Laminates and lower fixed cost recovery at Foils Americas,
partly offset by reduced production and energy costs.
Selling, general and administration costs were GBP0.6m lower due
to reduced spending in Holographics, lower accruals for incentive
payments and the impact of currency translation. Pre-exceptional
operating profits for the six month period of GBP2.8m compared to
GBP3.5m at the interim stage last year, as lower costs were more
than offset by the less favourable mix of sales. Across the
divisions, operating profits at Foils Europe and Laminates were
substantively unchanged, whilst a GBP0.5m turnaround at
Holographics was more than offset by a GBP1.4m adverse swing at
Foils Americas. Central costs were lower by GBP0.2m.
Compared to the second half of last year, revenues were 2% lower
at constant FX and pre-exceptional operating profits were down by
30% due primarily to lower sales in the foils businesses,
especially Foils Americas.
No exceptional costs were incurred in the six months to 30
September 2014, compared to a charge of GBP0.3m booked last year in
connection with restructuring the UK Foils operations. As a result
of lower cash interest costs, the net finance charge was GBP0.1m
lower, at GBP0.5m, including a non-cash cost of GBP0.3m relating to
defined benefit pension liabilities. Interim profit before tax of
GBP2.3m compares to last year's pre-exceptional GBP2.9m and GBP2.6m
on a post-exceptional basis.
Tax of GBP0.4m (2013: GBP0.0m) comprised an accrual for
corporation tax in the UK and Europe of GBP0.3m (2013: GBP0.2m) and
deferred tax charge of GBP0.1m (2013: -GBP0.2m). The tax rate of
20% was inflated by the absence of further tax relief being
recognised on losses in the US. Underlying earnings per share
(diluted) amounted to 2.4p compared to 3.8p for the first half last
year.
Review of Operations
Laminates
The Group's largest division continued the strong momentum seen
in the second half of last financial year. Revenues of GBP32.3m
were 15% higher than last year's first half and were 4% ahead of
the preceding six months. There was strong demand from a number of
key tobacco customers and full loading of the new laminator as a
result of the major new supply contract which commenced last
year.
Despite higher sales, operating profits were unchanged at
GBP3.3m (2013: GBP3.3m) due to changes in the product mix and some
one-off factors impacting comparative costs and margins. The ratio
of operating profit to sales declined by 1.4% to 10.2%.
The business remains focussed on volume opportunities with
customers in the premium branded consumer goods segment and on
maximising the utilisation and effectiveness of its manufacturing
assets.
Foils Europe
Foils Europe revenues were down 4% on a constant currency basis,
at GBP13.4m. Subdued demand on the continent impacted sales in
Germany, France, Poland and Spain although this was partly offset
by further gains in Italy. The new UK supply hub performed well,
although year-on-year sales growth was constrained by a lower level
of customer activity associated with product launches and
rebranding.
The impact of lower volumes was fully compensated by a more
favourable sales mix, leaving operating profits unchanged at
GBP0.9m and operating margins of 6.4% compared to 6.3% at the
interim stage last year.
During the period, progress was made on a number of operational
improvement projects, including the installation and commissioning
of a new metalliser at Livingston and the successful roll-out of
the Group's new ERP system in France and Poland. In addition, two
important new foil grades were launched, to which the initial
customer response has been positive. The pace of change is planned
to continue in the second half with the ERP implementation at the
two UK sites and installation of the new coating line in
Livingston.
Foils Americas
As predicted at the final results stage last year and in
September's trading update, Foils Americas revenues for the six
months to 30 September 2014 were significantly impacted by a
decline in demand from customers in the metallic pigment segment.
Progress in recovering sales in the core graphics market to
compensate for the lost pigment volume was slower than expected. As
a result, divisional revenues were down by 24% on a constant
currency basis and 30% at actual FX rates to GBP8.3m.
Action was taken to reduce costs, yielding year-on-year savings
of GBP0.4m (at constant FX). Nevertheless, the unit recorded a loss
of GBP0.4m compared to an operating profit of GBP1.1m in the first
half of last year (GBP1.0m at this year's FX rates).
A new metalliser was commissioned in Lawrence towards the end of
the period which will provide enhanced capabilities relevant to
both the metallic pigment sector and the core graphics foils
market, which should benefit business development prospects over
the medium term.
Holographics
Holographics consolidated the break-even position achieved in
the final quarter of the last financial year, eliminating losses of
GBP0.5m reported for last year's first half.
Revenues were 5% lower at GBP4.3m (2013: GBP4.5m) due to reduced
orders against continuing supply agreements with security
customers, partly offset by increased volumes of decorative
holographic products supplied to sister companies within the
Group.
During the period, the division strengthened its sales and
marketing team, with key appointments from inside the security
holographics sector. A new product range was launched using optical
features originated at the Group's recently established holographic
origination centre in the Czech Republic. In addition, the
manufacturing site at Salford was accredited to the new
international security standard for security printing processes,
ISO 14298.
Cash Flow and Borrowings
Reported net cash-flow from operating activities for the six
months to September 2014 amounted to a net outflow of GBP1.6m
(2013: GBP0.6m outflow), with the year-on-year change due primarily
to lower net profits (GBP0.3m), higher income taxes paid (GBP0.2m)
and a small increase in working capital (GBP0.3m). Period-end
working capital efficiency, measured by the ratio to sales, was
consistent with September 2013 at 11.2%.
The Group is part way through a significant capital expenditure
programme primarily aimed at enhancing capacity, capability and
effectiveness of the foils businesses. Cash capital additions in
the six months to September 2014 amounted to GBP3.2m (2013:
GBP2.4m) including completing the installation of new metallisation
equipment at both Foils Americas' plant in Lawrence, Kansas and
Foils Europe's manufacturing site in Livingston, Scotland. Stage
payments were also made relating to a new coating line for
Livingston and expenditure continued on the Group's ERP
implementation which is currently being rolled out in Foils Europe.
Full year capital expenditure is expected to be close to GBP6.0m,
including second half expenditure to complete the UK coater
project.
After the reintroduction of the dividend, the final dividend
payable in respect of the year ended 31 March 2014 impacted cash
flow in the first six months of this financial year by GBP1.0m
(2013: GBP0.0m).
Group net debt at 30 September 2014 was GBP5.7m, compared to
GBP5.6m one year earlier and net cash of GBP0.2m at 31 March 2014.
The Group continues to manage its cash position closely with
gearing at the period end of 23%, unchanged from twelve months ago
and the ratio of net debt to trailing 12 month EBITDA also
unchanged at 0.6x.
The US business' existing funding with Wells Fargo expires in
April 2015 and the Group is currently in the process of arranging
new facilities.
Dividend
The Board re-introduced dividend payments at the interim stage
last year after a break of more than 10 years. In spite of the
weaker profit performance in the current financial year, the Board
remains confident about the Group's prospects and committed to an
affordable, progressive dividend policy. The interim dividend is
therefore being increased by 7.1% to 0.75 pence per share and will
be paid on 12 January 2015 to shareholders on the register as at 12
December 2014, with an ex-dividend date of 11 December 2014.
Pension Deficit
The gross deficit on UK and US defined-benefit pension plans, as
calculated under IAS19, increased by GBP2.4m to GBP15.8m compared
to the position at 31 March 2014. Above-plan returns on scheme
assets were more than offset by the impact of lower corporate bond
yields on the valuation of liabilities. The associated deferred tax
asset increased by GBP0.5m, leaving a net reported deficit of
GBP12.4m compared to GBP10.5m at March 2014. In respect of the UK
scheme, a funding ratio of 85% was down 1% on the position at 31
March 2014.
Board
As announced previously, after more than 14 years on the Board
as a non-executive director and then Chairman, Richard Wright stood
down as a director at the end of October 2014. The Board is
grateful for Richard's dedication to serving the interests of the
Group and its shareholders and especially his stewardship during
the challenges of the mid to late 2000's and the subsequent
restoration of the Group's fortunes. The search for a new Chairman
is ongoing and further announcements will be made in due
course.
Chris Smith, who has been Group Finance Director since 2008
advised the Board in July 2014 of his intention to step down,
having been selected for the position of Chief Financial Officer at
McBride plc. Chris will complete his tenure on 12 December 2014 and
the Board thanks him for his wide-ranging contribution to the
development of the Group and wishes him every success in his new
role. An announcement on the replacement Finance Director will be
made in due course. To cover the period until a permanent
appointment is made, Loraine Hughes has joined the Group as Interim
Finance Director.
Outlook
The Group has experienced tough trading conditions so far in the
second half, with the outlook for profits this financial year
slightly down on previous expectations.
Progress at Foils Europe continues to be held back by sluggish
markets on the Continent and the benefit from a slow recovery in
metallic pigment orders at Foils Americas will be partly offset by
the seasonally weaker second half in the US market for graphics
foils.
Third quarter sales at Holographics are expected to drop below
breakeven level, although there is the prospect for the shortfall
to be recovered in the final last quarter with the start-up of
shipments on two new supply contracts.
Laminates is continuing to experience strong order levels on
established supply agreements although the impact on profits is
expected to be diluted by a less favourable sales mix.
Beyond the current financial year, the recovery in US metallic
pigment volumes is expected to continue and both the US and
European foils businesses should benefit from recent new product
launches and investments in new, more efficient capacity and
additional supply capabilities.
Group Income Statement
for the six month period ended 30 September 2014
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
Note GBP'000 GBP'000 GBP'000
--------------------------------------------------------------- ----- --------------- --------------- ----------
Revenue 2 56,374 56,897 114,712
Cost of sales (43,711) (42,621) (86,617)
--------------------------------------------------------------- ----- --------------- --------------- ----------
Gross profit 12,663 14,276 28,095
Distribution costs (1,880) (2,176) (3,952)
Administrative expenses (excluding exceptional items) (8,011) (8,645) (16,716)
--------------------------------------------------------------- ----- --------------- --------------- ----------
Operating profit before exceptional items 2 2,772 3,455 7,427
Exceptional items 3 - (300) (705)
--------------------------------------------------------------- ----- --------------- --------------- ----------
Operating profit 2,772 3,155 6,722
Net finance costs 4 (517) (567) (1,130)
--------------------------------------------------------------- ----- --------------- --------------- ----------
Profit before taxation 2,255 2,588 5,592
Tax (expense)/credit 5 (429) 20 (150)
--------------------------------------------------------------- ----- --------------- --------------- ----------
Profit for the period 1,826 2,608 5,442
--------------------------------------------------------------- ----- --------------- --------------- ----------
Earnings per share (pence)
Basic earnings per share on profit for the period 6 2.5 3.5 7.4
Underlying basic earnings per share on profit for the period 6 2.5 3.9 8.1
Diluted earnings per share on profit for the period 6 2.4 3.4 7.1
Underlying diluted earnings per share on profit for the period 6 2.4 3.8 7.8
--------------------------------------------------------------- ----- --------------- --------------- ----------
Group statement of comprehensive income
for the six months ended 30 September 2014
Unaudited
Unaudited Six months to Audited
Six months to 30 September Year to
30 September 2013 31 March 2014
2014 (restated(1) ) (restated(1) )
GBP'000 GBP'000 GBP'000
----------------------------------------------------------------- --------------- ---------------- ----------------
Profit for the period 1,826 2,608 5,442
----------------------------------------------------------------- --------------- ---------------- ----------------
Exchange differences on retranslation of foreign operations 135 (1,037) (1,442)
Change in fair value of effective cash flow hedges 527 638 863
Re-measurement (losses)/gains on defined benefit pension plans (2,690) 314 (513)
Tax on items relating to components of other comprehensive
income 398 (561) (350)
----------------------------------------------------------------- --------------- ---------------- ----------------
Other comprehensive income for the period, net of tax (1,630) (646) (1,442)
----------------------------------------------------------------- --------------- ---------------- ----------------
Total comprehensive income for the period attributable to equity
holders of the Parent 196 1,962 4,000
----------------------------------------------------------------- --------------- ---------------- ----------------
(1) Restated in accordance with IFRS 11 Joint Arrangements. See
Note 1 (c).
Group balance sheet
at 30 September 2014
Unaudited Audited
Unaudited 30 September 31 March
30 September 2013 2014
2014 (restated(1) ) (restated(1) )
Note GBP'000 GBP'000 GBP'000
------------------------------------------ ----- -------------- ---------------- ----------------
Assets
Non-current assets
Property, plant and equipment 24,050 21,413 21,776
Intangible assets - goodwill 5,602 5,631 5,626
Financial assets 78 46 -
Deferred tax assets 6,891 6,198 6,412
------------------------------------------ ----- -------------- ---------------- ----------------
36,621 33,288 33,814
------------------------------------------ ----- -------------- ---------------- ----------------
Current assets
Trade and other receivables 16,518 17,695 16,633
Inventories 13,594 12,925 12,126
Other financial assets 1,095 531 594
Cash and short-term deposits 8 6,210 1,490 8,691
------------------------------------------ ----- -------------- ---------------- ----------------
37,417 32,641 38,044
------------------------------------------ ----- -------------- ---------------- ----------------
Total assets 74,038 65,929 71,858
------------------------------------------ ----- -------------- ---------------- ----------------
Liabilities
Current liabilities
Trade and other payables 19,564 20,254 22,665
Financial liabilities 9 1,752 6,769 432
Income tax payable 755 494 635
------------------------------------------ ----- -------------- ---------------- ----------------
22,071 27,517 23,732
------------------------------------------ ----- -------------- ---------------- ----------------
Non-current liabilities
Financial liabilities 9 10,132 465 8,033
Deferred tax liabilities 405 287 306
Provisions 52 62 56
Deficit on defined benefit pension plans 10 15,777 12,733 13,364
------------------------------------------ ----- -------------- ---------------- ----------------
26,366 13,547 21,759
------------------------------------------ ----- -------------- ---------------- ----------------
Total liabilities 48,437 41,064 45,491
------------------------------------------ ----- -------------- ---------------- ----------------
Net assets 25,601 24,865 26,367
------------------------------------------ ----- -------------- ---------------- ----------------
Equity
Called up share capital 767 767 767
Share premium 7,136 7,136 7,136
Other reserves 8,822 8,816 8,818
Foreign exchange reserve (361) (91) (496)
Retained earnings 9,237 8,237 10,142
------------------------------------------ ----- -------------- ---------------- ----------------
Total shareholders' equity 25,601 24,865 26,367
------------------------------------------ ----- -------------- ---------------- ----------------
(1) Restated in accordance with IFRS 11 Joint Arrangements. See
Note 1 (c).
Group statement of changes in equity
for the six month period ended 30 September 2014
Equity Foreign Total
share Share Other exchange Retained shareholders'
capital premium reserves reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- ---------- ---------- ---------- ---------------
At 1 April 2013
(restated(1) ) 767 7,136 8,816 946 5,252 22,917
Profit for the
period - - - - 2,608 2,608
Other comprehensive
income for the
period, net of
tax (restated(1)
) - - - (1,037) 391 (646)
Shares acquired
by Employee Benefit
Trust - - (32) - - (32)
Share-based payments - - - - 18 18
Transferred on
exercise of share
options - - 32 - (32) -
------------------------- --------- --------- ---------- ---------- ---------- ---------------
Balance at 30 September
2013 767 7,136 8,816 (91) 8,237 24,865
Profit for the
period - - - - 2,834 2,834
Other comprehensive
income for the
period, net of
tax (restated(1)
) - - - (405) (391) (796)
Share-based payments - - - - (18) (18)
Transferred on
exercise of LTIP - - 2 - (2) -
Dividends - - - - (518) (518)
Balance at 31 March
2014 767 7,136 8,818 (496) 10,142 26,367
Profit for the
period - - - - 1,826 1,826
Other comprehensive
income for the
period, net of
tax - - - 135 (1,765) (1,630)
Transferred on
exercise of LTIP - - 4 - (4) -
Dividends - - - - (962) (962)
------------------------- --------- --------- ---------- ---------- ---------- ---------------
Balance at 30 September
2014 767 7,136 8,822 (361) 9,237 25,601
------------------------- --------- --------- ---------- ---------- ---------- ---------------
(1) Restated in accordance with IFRS 11 Joint Arrangements. See
Note 1 (c).
Group cash flow statement
For the six month period ended 30 September 2014
Unaudited Audited
Unaudited Six months to Year to
Six months to 30 September 31 March
30 September 2013 2014
2014 (restated(1) ) (restated(1) )
Note GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Operating activities
Group profit before tax 2,255 2,588 5,592
Adjustments to reconcile Group profit before tax to net
cash flow from operating activities:
Net finance costs 517 567 1,130
Depreciation of property, plant and equipment 1,142 1,132 2,386
Profit on disposal of property, plant and equipment (2) (5) (4)
Movement in fair value foreign exchange contracts (65) (7) 44
Share-based payments - 18 -
(Increase)/decrease in inventories (1,539) (458) 221
Increase in trade and other receivables (47) (2,226) (1,271)
(Decrease)/increase in trade and other payables (2,813) (1,405) 855
Decrease in provisions (4) (4) (10)
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Cash generated from operations (556) 200 8,943
Interest paid (208) (226) (396)
Pension contributions and scheme expenses paid (585) (528) (973)
Income taxes paid (227) (53) (155)
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Net cash flow from operating activities (1,576) (607) 7,419
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Investing activities
Interest received 1 1 2
Purchase of property, plant and equipment (3,259) (2,261) (3,748)
Investment in joint operation - (153) (251)
Sale of property, plant and equipment 4 5 4
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Net cash flow used in investing activities (3,254) (2,408) (3,993)
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Financing activities
Dividends paid (962) - (518)
Purchase of shares by Employee Benefit Trust - (32) (32)
New borrowings 2,645 - 12,340
Arrangement fees for new borrowings - - (183)
Repayment of borrowings (94) (1,792) (12,567)
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Net cash flow from/(used in) financing activities 1,589 (1,824) (960)
---------------------------------------------------------- ----- --------------- ---------------- ----------------
(Decrease)/increase in cash and cash equivalents (3,241) (4,839) 2,466
Effect of exchange rates on cash and cash equivalents (54) (69) (103)
Cash and cash equivalents at the beginning of the period 8,459 6,096 6,096
---------------------------------------------------------- ----- --------------- ---------------- ----------------
Cash and cash equivalents at the end of the period 8 5,164 1,188 8,459
---------------------------------------------------------- ----- --------------- ---------------- ----------------
(1) Restated in accordance with IFRS 11 Joint Arrangements. See
Note 1 (c).
Notes to the interim financial statements
for the six month period ended 30 September 2014
1. Group accounting policies
(a) Corporate information
The consolidated interim financial statements of API Group plc
for the six months ended 30 September 2014 were authorised for
issue in accordance with a resolution of the Directors on 2
December 2014.
API Group plc is a public limited company incorporated and
domiciled in England and Wales. The Company's shares are traded on
the Alternative Investment Market of the London Stock Exchange.
The principal activities of the Group are the manufacture and
distribution of specialty foils, films and laminated materials.
(b) Basis of preparation
The interim consolidated financial statements of the Group for
the six months ended 30 September 2014 have been prepared in
accordance with IAS 34 Interim Financial Reporting, as adopted by
the European Union.
These interim consolidated financial statements are unaudited.
They do not constitute statutory accounts as defined in Section 435
of the Companies Act 2006 and therefore do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
latest annual financial statements as at 31 March 2014 which were
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union. The audited annual
financial statements for the year ended 31 March 2014, which
represent the statutory accounts for that period have been filed
with the Registrar of Companies. The auditor reported on those
accounts. The audit report was unqualified, did not draw attention
to any matters by way of emphasis and did not contain a statement
under Section 498(2) or (3) of the Companies Act 2006.
UK banking facilities with HSBC extend to 31 December 2017
whilst US facilities are scheduled for renewal in April 2015. After
making appropriate enquiries, the Directors consider that there is
a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. The
Directors therefore continue to adopt the going concern basis in
preparing these financial statements.
(c) Significant accounting policies
The accounting policies adopted in the preparation of the
interim consolidated financial statements are consistent with those
followed in the preparation of the Group's annual financial
statements for the year ended 31 March 2014, except for the
adoption of IFRS 11 Joint Arrangements with effect from 1 April
2014. Comparative figures for the six months to 30 September 2013
and the year to 31 March 2014 have been restated. The impact of
adopting IFRS 11 is described below.
IFRS 11 Joint Arrangements
The key impact of IFRS 11 is the requirement of a party to a
joint arrangement to determine the type of joint arrangement in
which it is involved by assessing its rights and obligations
arising from the agreement. IFRS 11 classifies joint arrangements
into two types - joint operations and joint ventures. IFRS 11
requires a joint operator to recognise and measure the assets and
liabilities (and recognise the related revenue and expenses) in
relation to its interest in the arrangement.
The Group has a 50% interest in a company, API Optix s.r.o.
("APIO). This joint arrangement is considered to be a joint
operation under IFRS 11 and, under the transitional requirements of
IFRS 11, the comparatives for the period ended 30 September 2013
and the year ended 31 March 2014 have been restated.
The balance sheets at 30 September 2013 and 31 March 2014 have
been restated to recognise the Group's assets and liabilities in
relation to its interest in APIO. No adjustments have been made to
the income statement for either the six months ended 30 September
2013 or the year ended 31 March 2014 as APIO operated at breakeven
and the related revenue and expenditure are not significant to the
Group. Exchange differences on retranslation of APIO's operations
have been recognised in other comprehensive income; a charge of
GBP52,000 in the year ended 31 March 2014 and a charge of GBP29,000
in the six months ended 30 September 2013. Equity shareholders'
funds have reduced by GBP41,000 at 30 September 2013 and by
GBP64,000 at 31 March 2014 for the cumulative exchange differences
on retranslation of APIO's operations.
2. Segmental information
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
------------------------------------------------- --------------- ---------------- -----------
Total revenue by origin
Laminates 32,306 28,097 59,237
Foils Europe 13,410 14,380 28,580
Foils Americas 8,319 11,927 21,819
Holographics 4,269 4,505 8,888
------------------------------------------------- --------------- ---------------- -----------
58,304 58,909 118,524
------------------------------------------------- --------------- ---------------- -----------
Inter-segmental revenue
Laminates - - 13
Foils Europe 260 334 707
Foils Americas 239 312 567
Holographics 1,431 1,366 2,525
------------------------------------------------- --------------- ---------------- -----------
1,930 2,012 3,812
------------------------------------------------- --------------- ---------------- -----------
External revenue by origin
Laminates 32,306 28,097 59,224
Foils Europe 13,150 14,046 27,873
Foils Americas 8,080 11,615 21,252
Holographics 2,838 3,139 6,363
------------------------------------------------- --------------- ---------------- -----------
56,374 56,897 114,712
------------------------------------------------- --------------- ---------------- -----------
Segment result
Operating profit before exceptional items
Laminates 3,306 3,260 6,680
Foils Europe 852 901 2,130
Foils Americas (361) 1,055 1,699
Holographics (49) (548) (724)
------------------------------------------------- --------------- ---------------- -----------
Segment result 3,748 4,668 9,785
Central costs (976) (1,213) (2,358)
------------------------------------------------- --------------- ---------------- -----------
Total operating profit before exceptional items 2,772 3,455 7,427
------------------------------------------------- --------------- ---------------- -----------
3. Exceptional items
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------------- --------------- ----------
Restructuring of operating businesses - (300) (705)
- (300) (705)
-------------------------------------------------------- --------------- ----------
Restructuring of operating businesses in the previous year
related primarily to redundancy, severance settlements and other
costs associated with business restructuring in the Foils Europe,
Laminates and Holographics businesses.
4. Finance revenue and finance costs
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
----------------------------------------------------------- --------------- --------------- ----------
Finance revenue
Interest receivable on bank and other short-term deposits 1 1 1
Other interest receivable - - 1
----------------------------------------------------------- --------------- --------------- ----------
1 1 2
----------------------------------------------------------- --------------- --------------- ----------
Finance costs
Interest payable on bank loans and overdrafts (221) (280) (533)
Other interest payable (10) (8) (41)
Finance cost in respect of defined benefit pension plans (287) (280) (558)
----------------------------------------------------------- --------------- --------------- ----------
(518) (568) (1,132)
----------------------------------------------------------- --------------- --------------- ----------
Net finance costs (517) (567) (1,130)
----------------------------------------------------------- --------------- --------------- ----------
5. Taxation
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
--------------------------------------------------- --------------- --------------- ----------
Current income tax
UK corporation tax - current year charge (302) (127) (330)
UK corporation tax - adjustment to prior years - - 75
Overseas tax - current year charge (48) (54) (164)
--------------------------------------------------- --------------- --------------- ----------
(350) (181) (419)
--------------------------------------------------- --------------- --------------- ----------
Deferred tax
Origination and reversal of temporary differences (79) 237 418
Effect of change in tax rate - (36) (149)
--------------------------------------------------- --------------- --------------- ----------
(79) 201 269
--------------------------------------------------- --------------- --------------- ----------
Total (expense)/credit in the income statement (429) 20 (150)
--------------------------------------------------- --------------- --------------- ----------
6. Earnings per share
Basic earnings per share is calculated by dividing the net
profit for the period attributable to ordinary equity holders of
the Parent by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated by dividing the net
profit attributable to ordinary equity holders of the Parent by the
weighted average number of ordinary shares outstanding during the
period plus the weighted average number of ordinary shares that
would be issued on the conversion of all dilutive potential
ordinary shares into ordinary shares.
Earnings used to calculate adjusted basic and diluted earnings
per share exclude exceptional items, net of tax. The following
reflects the income and share data used in the basic and diluted
earnings per share computations:
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- --------------- --------------- ----------
Net profit attributable to equity holders of the Parent 1,826 2,608 5,442
Adjustments to arrive at underlying earnings:
Exceptional items - 300 705
Tax credit on exceptional items - - (162)
--------------------------------------------------------- --------------- --------------- ----------
Underlying earnings 1,826 2,908 5,985
--------------------------------------------------------- --------------- --------------- ----------
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
number number number
----------------------------------------------------------------- --------------- --------------- -----------
Basic weighted average number of ordinary shares 74,021,746 73,786,981 73,892,566
Dilutive effect of employee share options and contingent shares 3,130,184 3,376,309 3,265,060
----------------------------------------------------------------- --------------- --------------- -----------
Diluted weighted average number of ordinary shares 77,151,930 77,163,290 77,157,626
----------------------------------------------------------------- --------------- --------------- -----------
The calculation of the basic weighted average number of shares
excludes the shares owned by the API Group plc No.2 Employee
Benefit Trust (30 September 2014: 2,399,009; 30 September 2013 and
31 March 2014: 2,750,000). These contingent shares are included in
the calculation of the diluted weighted average number of
shares.
Unaudited Unaudited Audited
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
pence pence pence
--------------------------------------- --------------- --------------- ----------
Earnings per share
Basic earnings per share 2.5 3.5 7.4
Underlying basic earnings per share 2.5 3.9 8.1
Diluted earnings per share 2.4 3.4 7.1
Underlying diluted earnings per share 2.4 3.8 7.8
--------------------------------------- --------------- --------------- ----------
7. Dividends
An interim dividend of 0.75 pence per share (2013: 0.7 pence)
was approved by the Board on 2 December 2014, payable on 12 January
2015 to equity holders on the register at the close of business on
12 December 2014. This dividend has not been provided for in these
interim financial statements.
8. Cash and cash equivalents
Unaudited Audited
Unaudited 30 September 31 March
30 September 2013 2014
2014 (restated(1) ) (restated(1) )
GBP'000 GBP'000 GBP'000
------------------------------ -------------- ---------------- ----------------
Cash and short-term deposits 6,210 1,490 8,691
Bank overdrafts (1,046) (302) (232)
------------------------------ -------------- ---------------- ----------------
5,164 1,188 8,459
------------------------------ -------------- ---------------- ----------------
(1) Restated in accordance with IFRS 11 Joint Arrangements. See
Note 1 (c).
9. Financial liabilities
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
------------------------------------------- -------------- -------------- ----------
Current
Bank overdrafts 1,046 302 232
Current instalments due on bank loans 706 6,296 187
Interest rate swaps - 4 -
Forward currency exchange contracts - 167 13
------------------------------------------- -------------- -------------- ----------
1,752 6,769 432
------------------------------------------- -------------- -------------- ----------
Non-current -
Non-current instalments due on bank loans 10,132 465 8,033
Interest rate swaps - - -
------------------------------------------- -------------- -------------- ----------
10,132 465 8,033
------------------------------------------- -------------- -------------- ----------
10. Defined benefit pension plan deficit
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------- -------------- -------------- ----------
United Kingdom
Fair value of scheme assets 82,558 77,231 80,011
Present value of scheme liabilities (97,459) (89,209) (92,631)
---------------------------------------------------------------- -------------- -------------- ----------
(14,901) (11,978) (12,620)
---------------------------------------------------------------- -------------- -------------- ----------
United States
Fair value of scheme assets 2,159 2,011 2,087
Present value of scheme liabilities (3,035) (2,766) (2,831)
---------------------------------------------------------------- -------------- -------------- ----------
(876) (755) (744)
---------------------------------------------------------------- -------------- -------------- ----------
Net pension liability (15,777) (12,733) (13,364)
---------------------------------------------------------------- -------------- -------------- ----------
The movements in the net pension liability are as follows:
Opening liability 13,364 13,349 13,349
Scheme expenses recognised in operating profit 266 330 675
Net cost recognised in finance costs 287 280 558
Taken to statement of comprehensive income 2,690 (314) 513
Contributions from and scheme expenses borne by employers (851) (850) (1,648)
Exchange differences 21 (62) (83)
---------------------------------------------------------------- -------------- -------------- ----------
Closing liability 15,777 12,733 13,364
---------------------------------------------------------------- -------------- -------------- ----------
The main assumptions used in valuing the present value of the scheme liabilities in the UK
are as follows:
Rate of increases in pensions in payment and deferred pensions 2.20% 2.30% 2.35%
Inflation - CPI 2.20% 2.30% 2.35%
Discount rate 4.00% 4.40% 4.40%
---------------------------------------------------------------- -------------- -------------- ----------
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGGWWPUPCGBP
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