TIDMAUG
RNS Number : 7402Z
Augean Plc
22 September 2015
22 September 2015
Augean plc ("Augean" or "the Group")
Interim results for the six months ended 30 June 2015
Augean, one of the UK's leading specialist waste management
businesses, announces its Interim Results for the six months ended
30 June 2015.
Group financial highlights
From continuing operations and excluding exceptional items
-- Revenue increased by 27% to GBP31.3m (2014: GBP24.7m)
-- Profit before tax increased by 29% to GBP3.1m (2014: GBP2.4m)
-- Net operating cash flows increased by 185% to GBP6.6m (2014: GBP2.3m)
-- Return on capital employed (1) increased to 11.7%, from 10.1% in 2014
-- EBITDA(2) increased by 24% to GBP5.8m (2014: GBP4.7m)
-- Basic earnings per share increased by 22% to 2.30p (2014: 1.89p)
-- Net debt decreased to GBP3.0m, from GBP5.7m at December 2014 (GBP8.9m at June 2014)
Operational highlights and strategic developments
-- Strong performance within Energy & Construction driven by
significant increase in volumes of contaminated soils
-- Radioactive Waste Services performed in line with expectations
-- Work underway to optimise Industry & Infrastructure
performance after a disappointing first half
-- Augean Integrated Services secured significant new high value
contracts with continued focus on delivering Total Waste Management
service
o Permit variation granted for East Kent HTI(3) to receive Low
Level Waste as part of Waste Treatment Services
-- A number of new medium and long term contract wins for Augean
North Sea Services (ANSS) with tier-1 customers building on very
positive first half performance
o Purchase of the remaining 19% of ANSS not previously owned
-- Post period end, appointment of John Grant to the Board as a non-executive director
Outlook
-- Strong overall performance from the Group in the first half
-- Full year performance for 2015 anticipated to be in line with management expectations
-- Group remains well-placed to take advantage of organic and
non-organic growth opportunities and to deliver double-digit
organic annual profit growth in 2015
Commenting on the Results, Dr Stewart Davies, Chief Executive
Officer, said:
"I am pleased with the Group's performance in the first half of
the year, where we delivered double digit growth in Group revenue
and pre-tax profit, along with continued improvement in ROCE. We
have seen the benefit of the Group's portfolio approach of
maintaining five businesses in diverse markets, enabling us to
optimise the performance in certain areas while continuing to
deliver strong growth at a Group level. The Group enjoyed strong
cash flow generation and remains well placed to take advantage of
medium term investment opportunities that accelerate the strategy
and are value enhancing for shareholders.
With increased numbers of tier-1, long term and Total Waste
Management contracts, the Board remains confident in the Group
delivering its expectations for 2015 while continuing to deliver
sustainable market positions and grow shareholder value."
There will be a meeting for analysts at 9.30am today at the
offices of FTI Consulting, 9(th) Floor, 200 Aldersgate, Aldersgate
Street, London, EC1A 4HD. For further information please call 020
3727 1203.
For further information, please call:
Augean plc
Dr Stewart Davies, Chief Executive
Richard Laker, Group Finance Director 01937 844 980
N+1 Singer
Shaun Dobson
Richard Lindley
Jen Boorer 020 7496 3000
FTI Consulting
Oliver Winters
Adam Cubbage 020 3727 1000
(1) Return on capital employed is defined as operating profit
divided by average capital employed, where capital employed is net
assets excluding net debt
(2) EBITDA means earnings before interest, taxation,
depreciation and amortisation
(3) HTI means high temperature incinerator
Strategic report
Operating review
Introduction
In the first six months of 2015, the Group continued the
momentum seen in 2014 enabling it to deliver a strong financial
performance, as had been seen in the 2014 financial year.
The results of the Group, from continuing operations and
excluding exceptional items, show that, compared to the same period
in 2014:
-- Total revenue increased by 27% to GBP31.3m;
-- Profit before taxation increased by 29% to GBP3.1m;
-- Net operating cash flows increased by 185% to GBP6.6m;
-- Basic earnings per share increased by 22% to 2.30 pence; and
-- Return on capital employed(1) increased from 10.1% to 11.7%.
The operating cash flow of the Group was used to fund the growth
of the Group, with total capital expenditure investment of GBP2.3m,
of which GBP1.3m was incurred to lengthen the productive life of
existing assets (maintenance capital expenditure) and GBP1.0m was
for other future growth (development capital expenditure).
The Group remains committed to growth through both organic and
acquisitive means. Aside from its strong operating cash flows, the
Group had total available banking facilities of GBP13.75m at 30
June 2015, compared to net debt of GBP3.0m. The net debt was
equivalent to 0.3 times rolling 12 months EBITDA, from continuing
operations and before exceptional items, leaving the Group well
placed to take advantage of medium term investment opportunities
that accelerate the strategy and are value enhancing for
shareholders.
The Group employed an average of 343 staff (2014: 279) over the
first six months of the year. The Group has continued to invest in
high-quality employees who are key to the future growth plans and
continuing execution of the strategy of the Group.
Business performance
The Group operated through five business units during the period
with the performance of each set out below. All revenues are stated
net of landfill tax and intra-group trading.
Energy & Construction (E&C)
The principal activity of this business unit is the disposal of
air pollution control residues (APCR), furnace bottom ash, asbestos
and other contaminated waste materials and soils, mainly from
energy-from-waste facilities and the construction industry. This is
primarily achieved through treatment and ultimate landfill in
permitted hazardous and non-hazardous sites at Port Clarence, East
Northants Resource Management Facility (ENRMF) and a permitted
non-hazardous site at Thornhaugh, near Peterborough.
Revenues, excluding landfill tax and intra-group trading,
increased by 49% to GBP10.5m (2014: GBP7.1m) driven by a marked
uplift in the total volume of waste disposed by the E&C
business to 208,100 tonnes in 2015, from 151,100 tonnes in the
first half of 2014, an increase of 38%. This was mainly due to a
significant increase in the volume of construction soils, with
increased activity in the construction sector seen. APCR volumes
increased by 1,100 tonnes to 37,300 tonnes (3% increase compared to
H1 2014) and other waste streams increased by 55,900 tonnes to
170,800 tonnes (49% increase compared to H1 2014).
The higher volumes of lower margin contaminated soils received
by the business unit caused the operating profit and EBITDA of the
division to grow at a lower rate than revenue, with operating
profit before exceptional items improving by 3% to GBP3.0m (2014:
GBP2.9m) and EBITDA increasing by 13% to GBP4.4m (2014: GBP3.9m) on
the same basis.
Average gate fees on APCR streams increased by 6% to GBP87 per
tonne for an overall increase in APCR revenue of 10% compared to
the first half of 2014. APCR volumes for the rest of 2015 are
expected to remain at similar levels to those seen in the first
half as the business continues bidding activity in this area.
Average gate fees on soils and other waste increased by 13% to
GBP39 per tonne, with an overall increase in revenue of 68%.
Non-waste revenue streams, from mineral extraction royalties and
energy generation from landfill gas, totalled GBP0.7m (2014:
GBP0.2m) in the period.
Total capital investment in the E&C business was GBP0.9m in
the period, of which GBP0.5m was in respect of lengthening the
productive life of existing assets (maintenance capital
expenditure) and GBP0.4m was investment in the future growth of the
business (development capital expenditure). The total capital spend
was higher than the same period in 2014, with maintenance capital
expenditure incurred in the first half of 2015 including GBP0.5m in
respect of the construction of a new landfill cell at the
Thornhaugh site, which has been completed in the second half of
2015.
The high level of activity in the first half was attributed to a
'catch-up' in the preparation of construction sites and volumes of
construction soils are not expected to be as high in the second
half of 2015. APCR volumes are expected to remain at the current
level. Given the strength of the first half performance of the
business, it is now considered that the E&C business profit
will exceed previous management expectations for the 2015 financial
year.
Radioactive Waste Services (RWS)
The principal activity of this business unit is the treatment
and disposal of low level radioactive waste generated from the UK
nuclear estate. The disposal of the waste is facilitated by the
Nuclear Decommissioning Authority as the waste is generated
primarily from the decommissioning of redundant power plants and
research facilities, with the RWS business bidding to dispose of
the waste through frameworks with Low Level Waste Repository
Limited (LLWR). The ultimate primary customer is a Government
agency and the volume of waste dealt with is seasonal, with
significantly higher volumes ordinarily seen in the period from
January to March each year, such that the majority of revenue and
profits from this business are generally expected to occur in the
first half of the Group's financial year.
(MORE TO FOLLOW) Dow Jones Newswires
September 22, 2015 02:01 ET (06:01 GMT)
The total revenue from the disposal and treatment of low level
radioactive waste, excluding intra-group trading, increased by 17%
to GBP1.2m (2014: GBP1.0m) in the period, with an increase in
operating profit of 10% to GBP0.8m (2014: GBP0.7m) and an increase
in EBITDA of 9% to GBP0.8m (2014: GBP0.7m). This was generated from
a total volume of 1,747 tonnes, a decrease of 29% compared to 2,453
tonnes in 2014.
During 2014, the business was successful in obtaining a place on
an additional LLWR framework for Waste Treatment Services, which
opened up the potential for additional waste streams and associated
revenues in future years. During the first half of 2015 we have
continued to prepare the East Kent HTI facility to allow for safe
and secure treatment of such waste streams. We were successful in
varying our permit for the facility with the Environment Agency
which was granted in February 2015, with waste expected to flow
from 2016 onwards.
The UK Government spending in relation to nuclear
decommissioning has been under review since the General Election in
May 2015. There has been additional change in the market with the
merger of Research Sites Restoration Limited (RSRL) and Magnox into
a single site licence company, responsible for 12 nuclear sites.
With these developments, there is a potentially increased risk that
certain customer expenditure is deferred into later years, such
that the timing of treatment of these waste streams is less certain
in the short term. As a consequence of these market changes, it is
currently expected that the RWS business will fall marginally short
of management expectations for the 2015 financial year.
Industry & Infrastructure (I&I)
The principal activity of this business unit is the recovery and
recycling of oil and solvents, as well as the provision of
specialist industrial cleaning and other waste management services
to a range of markets, including chemical processing &
manufacturing, port & shipping operations, water treatment
& supply and onshore demolition & clean up. This includes
the treatment of drill cuttings from the North Sea Oil & Gas
market, which are supplied through the Augean North Sea Services
business, with oil and gas operators the end customer of the Group.
The business primarily operates from sites in Avonmouth and
Paisley, as well as operating the Port Clarence Waste Recovery Park
(PCWRP) on Teesside and providing industrial services solutions on
client sites.
The business generated revenue of GBP5.9m during the first six
months of 2015, which was broadly in line with the same period last
year (H1 2014: GBP5.9m).
The business made an operating loss of GBP0.5m, in line with the
same period in 2014 (H1 2014: GBP0.5m loss). The business generated
a negative EBITDA of GBP0.1m, compared to a positive EBITDA of
GBP0.1m for the same period last year. The business was adversely
impacted by fluctuations in the oil price at its Avonmouth site,
which accounted for GBP0.2m of the operating loss.
Measures have been taken at the site to ensure appropriate
levels of pricing agility in this market and a review to optimise
the site's performance is underway. In view of the time for this to
take effect and the separate and significant impact of reduced
drilling activity in the North Sea on the processing of drill
cuttings at PCWRP it is anticipated that the 2015 second half
trading performance will be below management expectations.
Augean Integrated Services (AIS)
This business unit operates from a site in Cannock and a high
temperature incinerator (HTI) in Sandwich, East Kent. It offers a
total waste management (TWM) service, through a team of highly
knowledgeable experts, who work with customers on a consultative
basis to address their waste management and compliance needs, as
well as leveraging the niche HTI asset in East Kent, which is
designed to incinerate high-value low volume goods, such as
pharmaceutical or other specialist waste, in a secure fashion.
Total revenue, excluding inter-segment sales, was GBP2.7m for
the first half of 2015, an increase of 45% compared to the same
period last year (2014: GBP1.8m). This included GBP1.0m from
contracted TWM business (2014: GBP0.4m).
Despite the increase in revenue, the business recorded an
operating loss of GBP0.4m, broadly in line with the same period in
2014, as well as a negative EBITDA of GBP0.3m (2014: negative
GBP0.4m).
The below-expectation bottom line financial performance of this
business unit was primarily due to the performance at the East Kent
HTI which realised an operating loss of GBP0.3m (2014: loss of
GBP0.5m). The disappointing performance of the HTI resulted from
unplanned operational downtime during the period, leading to higher
operating costs and a temporary reduction in processing capacity.
Further equipment replacement has been undertaken in the second
half of 2015 and an improved schedule of planned, preventative
maintenance is now in place to allow the HTI to deal with the
increased commercial pipeline arising from new contract wins.
The AIS business has built a commercial team with
sector-specific expertise, which has enabled the wider AIS business
to secure further TWM contracts with high-value customers in 2015,
the full year impact of which is expected to occur in 2016 and
beyond. The AIS business excluding East Kent made an operating loss
of GBP0.1m (2014: GBPnil) as it continues to invest for growth.
The Group purchased the East Kent HTI in 2014, for a total of
GBP1.9m. The purchase price included a deferred element of GBP0.4m,
of which GBP0.2m was paid in early 2015 and the remaining GBP0.2m
will be paid in 2016.
Other than this deferred consideration payment, a total of
GBP0.3m of maintenance capital expenditure was undertaken in the
AIS business in the first half of 2015, most of which related to
the East Kent site to address the plant reliability issues referred
to above.
The operational issues experienced at the HTI mean that the
business unit will fall short of management expectations for the
2015 full financial year. However, the number of contract wins, and
the increased quality of revenue associated with them, combined
with the reliability improvements expected from the further key
equipment replacement in the second half of 2015, give the Board
increased confidence regarding the performance of the business
exiting the current financial year and beyond.
Augean North Sea Services (ANSS)
This business unit operates in the North Sea Oil & Gas
market, primarily from four sites in Aberdeen but also from a site
at Lerwick, in the Shetland Islands. The primary revenue streams
are from drilling waste management, which includes drill cuttings
management and the rental of offshore engineers and equipment to
customers, as well as onshore & marine industrial services and
water treatment. Throughout 2014 and early 2015, the Augean Group
owned 81% of the shares in ANSS. As previously announced, the Group
purchased the remaining 19% of shares in March 2015 such that ANSS
became a wholly-owned subsidiary of the Group from that date.
In H1 2015, the business saw significant revenue growth, of 39%
to GBP8.1m (H1 2014: GBP5.8m), with an increase in operating profit
of 246% to GBP1.0m (H1 2014: GBP0.3m) and an increase in EBITDA of
154% to GBP1.4m (H1 2014: GBP0.5m), reflecting both the improved
performance of the business as well as more favourable weather
conditions than in H1 2014. This performance was despite the
worsening market conditions in the oil & gas sector seen since
late 2014 and significantly exceeded management expectations.
During H1 2015, the business maintained incumbency on an average of
5.0 drilling rigs, compared to 3.3 in the same period in 2014.
Key to this successful performance has been the continued
strategic traction of the business in moving up the supply chain
and dealing directly with oil & gas operators and tier-1
customers in this market, which increases the potential for the
business to widen its service scope directly with those customers.
89% of total ANSS revenues were directly generated from those
customers in the first half of 2015 (H1 2014: 85%).
ANSS is a support service business, with 2015 operating expenses
comprising 73% variable costs, 5% depreciation and 22% other fixed
costs. The proportion of other fixed costs is 2% higher than in the
same period in 2014 and is primarily due to investment in the ANSS
employee base to support the growth of the business.
In June and July 2015, ANSS was successful in winning three new
contracts, with terms of between three and five years, all of which
are with operators and tier-1 customers. These contracts include
production platform waste management, onshore waste management and
decommissioning work, the latter of which will be delivered in
conjunction with the Radioactive Waste Services business.
ANSS operates in the oil and gas market which has been impacted
by macroeconomic conditions since the latter part of 2014. As
expected, these conditions are now impacting on drilling waste
management activities in the second half of the financial year.
Given the ongoing turbulence in the oil and gas sector, management
continues to monitor events closely and ensure that costs are
tightly controlled, whilst sufficient investment is made to allow
the business to pursue its growth strategy and take advantage of
the opportunities that are emerging in the current environment.
Whilst acknowledging the inherent market uncertainty, given the
performance of the business in the first half of 2015 and the
latest view of commercial pipeline and recent contract wins, it is
now considered that previous management expectations for ANSS will
be exceeded for the 2015 financial year.
Long term contracts
The Group aims to increase the proportion of its customer base
which is served through a formalised agreement, consisting of
either a contract or framework agreement. In H1 2015, the top-20
customers of the Group made up 45% of total Group revenue (H1 2014:
54%), of which 87% was through a formalised agreement (H1 2014:
90%).
(MORE TO FOLLOW) Dow Jones Newswires
September 22, 2015 02:01 ET (06:01 GMT)
The absolute value of revenue through contracts or other
agreements, excluding inter segment trading, increased by 2% in
2015, compared to the same period in 2014, thereby representing a
modest improvement in the absolute quality of the Group's revenue
streams.
Transactions
On 10 March 2015, the Group purchased the 19% of shares in
Augean North Sea Services Limited not already held by the Group,
thereby making the company a wholly-owned subsidiary of the Group
at that date. The consideration paid for the shares was
GBP1,050,000, excluding applicable stamp duty and fees, which was
paid in cash on the same date.
On 2 July 2015, the Group purchased the entire issued share
capital of ASB Environmental Limited (ASB) for a total
consideration of GBP40,000, which was paid in cash on the same
date. The acquisition of ASB is not expected to have a material
impact on the results of the Group for the financial year.
Legislative environment
Regulation underpins the demand for Augean's services and
accordingly the business follows closely the development of
legislation and guidance and engages proactively with policy makers
and regulators. Of particular interest to the business in 2015 have
been changes to the landfill tax regime, the revised classification
of waste, WM3, and developments on the derogations for landfill
acceptance criteria. The Finance Act 2015 introduced requirements
for determining the landfill tax rate of screened wastes. From 1
June 2015, Augean smoothly implemented the transition to using the
Global Harmonised System for classification of chemicals and the
Environment Agency guidance WM3 which requires a change in the way
we classify waste. DEFRA has recently circulated a discussion paper
regarding the removal of derogations from the landfill acceptance
criteria. A decision will be made later this year but the removal
is unlikely until late 2017.
Planning and permitting
The securing of planning permission and maintenance of
appropriate environmental permits at the Group's sites is an
essential part of the ongoing operation and future development of
the business.
During 2015, planning and permit applications for the extension
of the landfill sites at Thornhaugh and Port Clarence were
granted.
The Thornhaugh approval enables Augean to re-engineer part of
the landfill site, creating new void and prolonging the life of the
site to 2034.
Planning permission was also granted for Augean to continue
operating the Port Clarence site until it is full, which is
currently estimated to be in the latter part of the twenty-first
century.
In May 2014, the business acquired the East Kent HTI, with
additional contiguous land at Bloody Point. Planning permission has
now been obtained from Kent County Council to develop the
additional land for waste use. In parallel, we have varied the
Environmental Permits for the incinerator so that our hazardous and
radioactive waste storage activities can be extended to Bloody
Point.
On 10 July 2013, the Secretary of State for Communities and
Local Government granted a Development Consent Order (DCO) for the
extension of the landfill site at ENRMF. This site provides
treatment and disposal services for a range of remediated soils and
building rubble, APCR and low activity radioactive wastes and is
the principal hazardous waste landfill site in the South of
England. To fully exploit the DCO it is necessary to vary the
permits for LLW and hazardous wastes. Extensive technical work has
been undertaken including environmental impact and risk assessments
to ensure that the on-going development will not cause harm to
human health or pollution of the environment. It is anticipated
that the revised permits will be issued by the end of 2015.
Financial performance
Group overview
A summary of the Group's financial performance, from continuing
operations and excluding exceptional items, is as follows:
GBP'm except where stated 2015 2014
---------------------------- ------ ------
Revenue 31.3 24.7
---------------------------- ------ ------
Operating profit 3.5 2.7
---------------------------- ------ ------
Profit before taxation 3.1 2.4
---------------------------- ------ ------
Profit after taxation 2.4 1.9
---------------------------- ------ ------
EBITDA (defined below) 5.8 4.7
---------------------------- ------ ------
Net operating cash flow 6.6 2.3
---------------------------- ------ ------
Basic earnings per share 2.30p 1.89p
---------------------------- ------ ------
Return on capital employed 11.7% 10.1%
---------------------------- ------ ------
Exceptional items are detailed below.
On a statutory basis for continuing operations, operating profit
was GBP3.3m (H1 2014: GBP2.5m), profit before tax was GBP2.9m (H1
2014: GBP2.2m), profit after tax was GBP2.3m (H1 2014: GBP1.7m),
basic earnings per share were 2.21 pence (H1 2014: 1.49 pence) and
net operating cash flows were GBP6.5m (H1 2014: GBP1.9m).
Trading, operating profit and EBITDA
Net revenue from continuing operations for the six months ended
30 June 2015 increased by 27% to GBP31.3m (H1 2014: GBP24.7m).
Operating profit before exceptional items and from continuing
operations increased by 26% to GBP3.5m (H1 2014: GBP2.7m) and
profit before tax increased by 29% to GBP3.1m (H1 2014: GBP2.4m),
on the same basis.
Discontinued operations in 2014 relate to the former Waste
Network business, which was substantially closed by the end of
2013, with residual assets sold in 2014. Discontinued operations
recorded a result of GBPnil (H1 2014: GBP0.2m loss).
Earnings before interest, taxation, depreciation and
amortisation (EBITDA), from continuing operations and before
exceptional items, is determined as follows:
2015 2014
GBP'm GBP'm
------------------------------- ------- -------
Operating profit 3.5 2.7
------------------------------- ------- -------
Depreciation and amortisation 2.3 2.0
------------------------------- ------- -------
EBITDA 5.8 4.7
------------------------------- ------- -------
Exceptional items
Exceptional charges totalled GBP0.1m before taxation (H1 2014:
GBP0.4m), of which a charge of GBP0.2m in 2014 related to the
closure of the Waste Network business and was accordingly
classified as discontinued.
Exceptional items from continuing operations totalled a charge
of GBP0.1m (H1 2014: GBP0.2m), which substantially relate to
restructuring.
Finance costs
Finance charges primarily reflected the payment of interest on
bank debt and other financial liabilities, totalling GBP0.4m (H1
2014: GBP0.4m).
Taxation
The Group recognised an accounting tax charge of GBP0.6m (H1
2014: GBP0.4m) for its continuing operations, which has been
provided at the expected full year rate of 21.5% of profit before
taxation (H1 2014: 21.0%).
The Group paid corporate tax of GBP0.4m during the period (H1
2014: GBP0.3m), all of which was in respect of 2014 liabilities. A
current tax liability of GBP0.8m (H1 2014: GBP0.4m) remains in the
balance sheet at the period end.
No adjustment has been made to the deferred tax asset from 31
December 2014, which remains at GBP1.7m and continues to reflect
the extent to which the Board believes that the assets will be
recovered in the short to medium term.
Earnings per share
Basic earnings per share (EPS), from continuing operations and
excluding exceptional items, increased by 22% to 2.30 pence (H1
2014: 1.89 pence).
Statutory basic EPS, from continuing and discontinued operations
was 2.21 pence (H1 2014: 1.49 pence).
The Group made a profit after taxation, from continuing
operations and excluding exceptional items, of GBP2.4m (H1 2014:
GBP1.9m), of which GBP2.3m (H1 2014: GBP1.9m) was attributable to
equity shareholders.
The total number of ordinary shares in issue increased during
the period from 101,991,380 to 102,249,083 with the weighted
average number of shares in issue increasing from 99,699,414 to
102,029,822, for the purposes of basic EPS.
Dividend
The Board's current policy is to pay a single annual dividend
following the Annual General Meeting. A payment of GBP0.5m was paid
to shareholders in June 2015 in respect of the year ended 31
December 2014 (2014: GBP0.3m). Accordingly, no interim dividend has
been recommended.
Cash flow and net debt
The cash flow of the Group is summarised as follows:
2015 2014
GBP'm GBP'm
------------------------------------------- ------- -------
Net operating cash flows from continuing
operations and before exceptional
items 6.6 2.3
------------------------------------------- ------- -------
Net operating cash flows from exceptional
items and discontinued operations (0.1) (0.4)
------------------------------------------- ------- -------
Total net operating cash flows 6.5 1.9
------------------------------------------- ------- -------
Maintenance capital expenditure (1.1) (0.6)
------------------------------------------- ------- -------
Post-maintenance free cash flow 5.4 1.3
------------------------------------------- ------- -------
Development capital expenditure (1.0) (1.1)
------------------------------------------- ------- -------
Purchase of remaining shares in (1.1) -
ANSS
------------------------------------------- ------- -------
Purchase of East Kent freehold (0.2) (1.5)
------------------------------------------- ------- -------
Proceeds from sale of assets of
discontinued operation - 1.2
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September 22, 2015 02:01 ET (06:01 GMT)
------------------------------------------- ------- -------
Free cash flow 3.1 (0.1)
------------------------------------------- ------- -------
Dividend payments (0.5) (0.3)
------------------------------------------- ------- -------
Proceeds from issuance of equity 0.1 -
------------------------------------------- ------- -------
Net cash generation 2.7 (0.4)
------------------------------------------- ------- -------
Post-maintenance free cash flow, as set out in the table above,
represents the underlying cash generation of the Group, before any
investment in future growth or the payment of dividends to
shareholders.
The post-maintenance free cash flow of the Group, from
continuing operations and excluding exceptional items, increased by
221% to GBP5.5m (H1 2014: GBP1.7m), after excluding net operating
cash outflows from exceptional items and discontinued operations of
GBP0.1m (H1 2014: GBP0.4m).
Net operating underlying cash flows were generated from
continuing trading as follows:
2015 2014
GBP'm GBP'm
------------------------------------------ ------- -------
EBITDA from continuing operations
and before exceptional items 5.8 4.7
------------------------------------------ ------- -------
Net working capital movements 1.1 (1.9)
------------------------------------------ ------- -------
Interest and taxation payments (0.9) (0.7)
------------------------------------------ ------- -------
Other 0.6 0.2
------------------------------------------ ------- -------
Net operating cash flows from continuing
operations and before exceptional
items 6.6 2.3
------------------------------------------ ------- -------
Net operating cash flow as a percentage of EBITDA improved to
113% in 2015 (H1 2014: 49%).
The Group announced in March 2015 that it had purchased the
remaining 19% of shares in Augean North Sea Services, not already
held by the Group, for a total consideration of GBP1.05m.
The Group announced the purchase of the assets and site at the
East Kent Waste Recovery Facility during 2014 for a total
consideration of GBP1.9m, with GBP1.5m paid in 2014, GBP0.2m paid
in 2015 and GBP0.2m payable in January 2016.
In the first half of 2014, the Group sold certain residual
assets from the closure of the Waste Network business, for net
proceeds of GBP1.2m.
Excluding the ANSS shares purchase and East Kent deferred
consideration transactions, capital investment in property, plant
and equipment made by the Group totalled GBP2.1m (H1 2014: GBP1.7m)
and is shown in the table below. This is split between maintenance
investment, focused on upgrading existing facilities, and
development investment on new activities, with planning investment
to secure permissions to operate split between maintenance and
development, dependent upon the specific nature of that capital
expenditure:
Maintenance Development TOTAL
GBP'000 GBP'000 GBP'000
---------------------------- ------------ ------------ ---------
Energy & Construction 553 395 948
---------------------------- ------------ ------------ ---------
Radioactive Waste Services - - -
---------------------------- ------------ ------------ ---------
Industry & Infrastructure 21 108 129
---------------------------- ------------ ------------ ---------
Augean Integrated Services 176 94 270
---------------------------- ------------ ------------ ---------
Augean North Sea Services 161 248 409
---------------------------- ------------ ------------ ---------
Other/corporate 163 184 347
---------------------------- ------------ ------------ ---------
Total 1,074 1,029 2,103
---------------------------- ------------ ------------ ---------
During the period, the Group received a total of GBP0.1m (2014:
GBPnil) of equity proceeds from the exercise of share options by a
current employee.
As a result of the above net cash generation, net debt, defined
as total financial liabilities less cash and cash equivalents, fell
to GBP3.0m at 30 June 2015, from GBP5.7m at 31 December 2014. This
represented gearing, defined as net debt divided by net assets, of
5.5% (31 December 2014: 10.6%, 30 June 2014: 18.2%). The ratio of
net debt to EBITDA, from continuing operations and before
exceptional items, was 0.3 times (31 December 2014: 0.6 times, 30
June 2014: 1.0 times).
Financing
The activities of the Group are substantially funded by a bank
facility, comprising an amortising term loan, revolving credit
facility and bank overdraft. That facility was renewed in March
2014 with HSBC Bank plc, at an initial total level of GBP15m, which
had amortised, in the ordinary course of business, to GBP13.75m by
30 June 2015. The maturity of the term loan and credit facility is
July 2017 and the overdraft is reviewed annually. This facility,
along with the underlying cash generation of the Group, is expected
to provide the required funds to support further growth of the
business over that period. As at 30 June 2015, the undrawn funds
available to the group totalled GBP9.5m, excluding cash of
GBP1.3m.
Balance sheet and return on capital employed
Consolidated net assets were GBP54.9m on 30 June 2015 (30 June
2014: GBP49.2m) and net tangible assets, excluding goodwill and
other intangible assets, were GBP35.0m (30 June 2014: GBP29.5m), of
which GBPnil (30 June 2014: GBP0.9m) was not attributable to equity
shareholders of the Group.
Return on capital employed, from continuing operations and
excluding exceptional items, defined as operating profit divided by
average capital employed, where capital employed is net assets
excluding net debt, increased to 11.7% in the twelve months ended
30 June 2015 (H1 2014: 10.1%).
Board appointment
John Grant joined the Board as a non-executive director on 24
August 2015, bringing significant operational and financial
expertise to the Board with over two decades' experience in board
director roles. He is currently a non-executive director of Melrose
Industries plc, Pace plc and MHP SA. His experience further
strengthens the Board and will contribute to executing our growth
strategy.
Managing risk
The performance of the business is linked to economic activity
in the waste markets it serves, including the manufacturing,
construction, nuclear decommissioning, energy-from-waste and oil
& gas sectors. Fluctuations in the UK economy in general and
these sectors in particular affect Group performance, along with
Governmental regulatory and fiscal policies. Inflationary and other
cost pressures also impact the Group. Risks are mitigated by
diversifying the customer base as far as possible and by linking
gate fees and other customer charges, wherever possible, to
prevailing operating costs and commodity prices, including the
costs of waste disposal outside of the Group. In addition to this
general economic risk, there are a number of risks specific to the
markets served by the Group which may have a material impact on
activities and results. Those risks are set out on pages 38 to 41
of the Augean plc 2014 Annual Report and Accounts and remain
materially unchanged.
The Group uses a range of resources to manage and mitigate its
risks, including the adoption of a broad range of internal
controls, the use of risk registers and regular reporting,
monitoring and feedback of risks through the business.
Outlook
The Group has performed well in the first half of 2015, with
particularly strong performances from ANSS and Energy &
Construction. The Board notes the prevailing conditions in the
North Sea Oil & Gas market, as highlighted earlier in the year.
As expected, these conditions are now impacting our drilling waste
management activities in the second half. However, there has been
encouraging progress on the diversification of the ANSS business,
as demonstrated by the award of its first contracts in Total Waste
Management and Decommissioning and the Board remains confident of
its continued strong growth in the medium term.
There have been a number of commercial and operational
challenges seen in some areas of the Group in the first half of
2015 but the Board believes that the Group's customer focused,
service-led approach, including the portfolio effect of maintaining
five businesses in diverse markets, leaves the Group well-placed to
take advantage of organic and non-organic growth opportunities and
to deliver double-digit organic annual profit growth. Accordingly,
the Board remains confident of delivering full year financial
results in line with expectations.
Dr Stewart Davies
Chief Executive
21 September 2015
Unaudited consolidated statement of comprehensive income
(MORE TO FOLLOW) Dow Jones Newswires
September 22, 2015 02:01 ET (06:01 GMT)
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Six months Six months Year
Ended Ended ended
30 June 30 June 31 December
2015 2014 2014
Note GBP'000 GBP'000 GBP'000
------------------------------------------------- ---- ---------- ---------- -----------
Continuing operations
Revenue 4 31,311 24,729 54,993
Operating expenses (27,856) (21,987) (48,847)
------------------------------------------------- ---- ---------- ---------- -----------
Operating profit before exceptional items 3,455 2,742 6,146
Exceptional items (113) (201) 543
------------------------------------------------- ---- ---------- ---------- -----------
Operating profit 3,342 2,541 6,689
Net finance charges (402) (374) (759)
Share of loss of jointly controlled entity - (7) (5)
Profit before tax 2,940 2,160 5,925
Taxation 5 (632) (421) (1,125)
------------------------------------------------- ---- ---------- ---------- -----------
Profit from continuing operations 2,308 1,739 4,800
------------------------------------------------- ---- ---------- ---------- -----------
Discontinued operations
(Loss)/profit from discontinued operations - (193) 280
------------------------------------------------- ---- ---------- ---------- -----------
Profit for the period and total comprehensive
income 2,308 1,546 5,080
------------------------------------------------- ---- ---------- ---------- -----------
Profit attributable to:
Equity shareholders of Augean PLC 2,256 1,489 4,921
Non-controlling interest 52 57 159
------------------------------------------------- ---- ---------- ---------- -----------
Earnings per share - continuing and discontinued
operations
Basic 2.21p 1.49p 4.92p
Diluted 6 2.15p 1.48p 4.78p
Earnings per share - continuing operations
Basic 2.21p 1.59p 4.64p
Diluted 6 2.15p 1.57p 4.51p
------------------------------------------------- ---- ---------- ---------- -----------
Unaudited consolidated statement of financial position
At 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- ----------------- -----------
Non-current assets
Goodwill 19,602 19,602 19,602
Other intangible assets 271 152 296
Property, plant and equipment 43,248 42,091 43,317
Investment in jointly controlled entity - 4 -
Deferred tax asset 1,688 1,143 1,688
64,809 62,992 64,903
-------------------------------------------- --------- ----------------- -----------
Current assets
Inventories 347 345 410
Trade and other receivables 14,070 11,883 12,785
Cash and cash equivalents 1,271 2 1,502
-------------------------------------------- --------- ----------------- -----------
15,688 12,230 14,697
-------------------------------------------- --------- ----------------- -----------
Current liabilities
Trade and other payables (13,468) (9,921) (11,213)
Current tax liabilities (768) (405) (579)
Financial liabilities (1,045) (633) (1,045)
-------------------------------------------- --------- ----------------- -----------
(15,281) (10,959) (12,837)
-------------------------------------------- --------- ----------------- -----------
Net current assets 407 1,271 1,860
-------------------------------------------- --------- ----------------- -----------
Non-current liabilities
Financial liabilities (3,250) (8,318) (6,169)
Provisions (7,080) (6,704) (6,839)
-------------------------------------------- --------- ----------------- -----------
(10,330) (15,022) (13,008)
-------------------------------------------- --------- ----------------- -----------
Net assets 54,886 49,241 53,755
-------------------------------------------- --------- ----------------- -----------
Equity
Share capital 10,225 9,970 10,199
Share premium account 612 - 542
Special profit reserve - 36,450 -
Retained earnings 44,049 1,968 42,059
-------------------------------------------- --------- ----------------- -----------
Equity attributable to owners of Augean PLC 54,886 48,388 52,800
Non-controlling interest - 853 955
-------------------------------------------- --------- ----------------- -----------
Total equity 54,886 49,241 53,755
-------------------------------------------- --------- ----------------- -----------
Unaudited consolidated statement of cash flows
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Note GBP'000 GBP'000 GBP'000
----------------------------------------------- ---- ----------- ----------- -----------
Operating activities
Cash generated from operations 7 7,352 2,584 9,416
Finance charges paid (441) (352) (516)
Tax paid (443) (337) (801)
Net cash generated from operating activities 6,468 1,895 8,099
----------------------------------------------- ---- ----------- ----------- -----------
Investing activities
Proceeds from disposal of property, plant
and equipment - - 30
Proceeds from disposal of discontinued
operation - 1,163 1,161
Purchases of property, plant and equipment (2,303) (3,160) (6,741)
Purchases of intangible assets (12) (7) (192)
Payment for equity in non-controlling interest (1,050) - -
----------------------------------------------- ---- ----------- ----------- -----------
Net cash used in investing activities (3,365) (2,004) (5,742)
----------------------------------------------- ---- ----------- ----------- -----------
Financing activities
Issue of equity 96 - 771
Repayment of loan facilities (2,874) (71) (1,785)
Repayments of obligations under finance
leases (45) (11) (34)
Dividends paid (511) (349) (349)
----------------------------------------------- ---- ----------- ----------- -----------
Net cash used in financing activities (3,334) (431) (1,397)
----------------------------------------------- ---- ----------- ----------- -----------
(MORE TO FOLLOW) Dow Jones Newswires
September 22, 2015 02:01 ET (06:01 GMT)
Net (decrease) / increase in cash and cash
equivalents (231) (540) 960
Cash and cash equivalents at beginning
of period 1,502 542 542
----------------------------------------------- ---- ----------- ----------- -----------
Cash and cash equivalents at end of period 1,271 2 1,502
----------------------------------------------- ---- ----------- ----------- -----------
Unaudited consolidated statement of changes in equity
For the six months ended 30 June 2015
Share Share Special Retained Shareholders' Non-controlling Total
capital premium profit earnings equity interest equity
account reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2014 9,970 - 36,450 738 47,158 796 47,954
Total comprehensive income
for the period
Retained profit - - - 1,489 1,489 57 1,546
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total comprehensive income
for the period - - - 1,489 1,489 57 1,546
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Transactions with owners
of the Company
Dividends paid - - - (349) (349) - (349)
Share-based payments - - - 90 90 - 90
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total transactions with the
owners of the Company - - - (259) (259) - (259)
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
At 30 June 2014 9,970 - 36,450 1,968 48,388 853 49,241
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total comprehensive income
for the period
Retained profit - - - 3,432 3,432 102 3,534
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total comprehensive income
for the period - - - 3,432 3,432 102 3,534
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Transactions with owners
of the Company
Issue of equity 229 542 (771) 771 771 - 771
Reserve transfer - - (35,679) 35,679 - - -
Tax on items charged to equity - - - 13 13 - 13
Share-based payments - - - 196 196 - 196
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total transactions with the
owners of the Company 229 542 (36,450) 36,659 980 - 980
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
At 31 December 2014 10,199 542 - 42,059 52,800 955 53,755
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total comprehensive income
for the period
Retained profit - - - 2,256 2,256 52 2,308
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total comprehensive income
for the period - - - 2,256 2,256 52 2,308
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Transactions with owners
of the Company
Issue of equity 26 70 - - 96 - 96
Acquisition of non-controlling
interest - - - (43) (43) (1,007) (1,050)
Dividends paid - - - (511) (511) - (511)
Share-based payments - - - 288 288 - 288
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
Total transactions with the
owners of the Company 26 70 - (314) (218) (959) (1,177)
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
At 30 June 2015 10,225 612 - 44,049 54,886 - 54,886
------------------------------- -------- -------- -------- --------- ------------- --------------- -------
1 Statutory information
The financial information in the interim report does not
constitute statutory accounts as defined by Section 434 of the
Companies Act 2006 and has not been audited or reviewed.The
financial information relating to the year ended 31 December 2014
is an extract from the latest published financial statements on
which the auditor gave an unmodified report that did not contain
statements under Section 498 (2) or (3) of the Companies Act 2006
and which have been filed with the Registrar of Companies.
The interim financial statements for the six months ended 30
June 2015 are available from the Group's website at
www.augeanplc.com.
2 Accounting policies
The Interim financial statements have been prepared in
accordance with the AIM Rules for Companies and on a basis
consistent with the accounting policies and methods of computation
as published by the Group in its Annual Report for the year ended
31 December 2014, which is available on the Group's website.
3 Basis of preparation
The Group has chosen not to adopt IAS 34 'Interim Financial
Statements' in preparing these interim financial statements and
therefore the Interim financial information is not in full
compliance with International Financial Reporting Standards.
4 Operating segments
The Group has five reportable segments. The five segments are
the Group's strategic business units. These business units are
monitored and strategic decisions are made on the basis of each
business unit's operating performance. The Group's business units
provide different services to their customers and are managed
separately as they are subject to different risks and returns. The
Group's internal organisation and management structure and its
system of internal financial reporting are based primarily on these
operating business units. For each of the business units, the
Group's Chief Executive Officer (CEO) (the chief operating
decision-maker) reviews internal management reports on at least a
monthly basis. The following summary describes the operations of
each of the Group's reportable segments:
-- Energy and Construction: Augean operates three modern
hazardous and non-hazardous landfill operating sites based at East
Northants Resource Management Facility (ENRMF), Thornhaugh in
Northamptonshire and Port Clarence on Teesside, providing waste
remediation, treatment and disposal services to its customers. The
business unit includes a site at Cooks Hole in Northamptonshire
where minerals are extracted and also generates energy as
electricity from closed landfill cells.
-- Radioactive Waste Services: Augean provides waste disposal
services of low level radioactive wastes and naturally occurring
radioactive material produced in the UK.
-- Augean Integrated Services: Augean operates a High
Temperature Incinerator at Sandwich, East Kent and a site in
Cannock focused on Total Waste Management solutions.
-- Augean North Sea Services: This business unit provides waste
management and waste processing services to offshore oil and gas
operators in the North Sea. This was an 81% owned subsidiary
company until March 2015, at which point it became wholly-owned by
Augean plc.
-- Industry and Infrastructure: Augean operates three waste
processing sites across the UK, with activities focused on the
management of oil-contaminated waste. The business unit also
provides specialist industrial cleaning services.
Information regarding the results of each reportable segment is
included below. Performance is measured based on the segment
operating profit, as included in the internal management reports
that are reviewed by the Group's CEO. This profit measure for each
business unit is used to measure performance as management believes
that such information is the most relevant in evaluating the
results of each of the business units relative to other entities
that operate within these sectors.
All activities arise solely within the United Kingdom.
Inter-segment trading is undertaken on normal commercial terms.
(MORE TO FOLLOW) Dow Jones Newswires
September 22, 2015 02:01 ET (06:01 GMT)
The segmental results for the six months ended 30 June 2015 were
as follows:
Energy Radioactive Augean Industry Augean
and Waste Integrated and North Sea
Construction Services Services Infrastructure Services Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Hazardous landfill
activities 6,572 - - - - 6,572
Non-hazardous landfill
activities 1,323 - - - - 1,323
Waste treatment
activities - - 1,163 7,367 - 8,530
Total Waste Management
activities - - 1,773 - - 1,773
Energy generation 28 - - - - 28
APCR(*) management 3,235 - - - - 3,235
Radioactive waste
management - 1,205 - - - 1,205
Processing of offshore
waste - - - - 5,001 5,001
Rental of offshore
equipment and personnel - - - - 2,403 2,403
Waste transfer
activities - - - - 703 703
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Total revenue net
of landfill tax 11,158 1,205 2,936 7,367 8,107 30,773
Landfill tax 2,948 - - - - 2,948
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Total revenue including
inter-segment sales 14,106 1,205 2,936 7,367 8,107 33,721
Inter-segment sales (619) - (260) (1,494) (37) (2,410)
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Revenue 13,487 1,205 2,676 5,873 8,070 31,311
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Result
Operating profit/(loss)
before exceptional
items 3,005 772 (447) (509) 1,045 3,866
Exceptional items (23) (23) (22) (23) (22) (113)
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Operating profit/(loss) 2,982 749 (469) (532) 1,023 3,753
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Finance charges (402)
Central costs (411)
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Profit before tax 2,940
Taxation (632)
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Profit after tax 2,308
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Attributable to:
Equity shareholders of Augean PLC 2,256
Non-controlling
interest 52
------------------------- -------------- ------------ ------------ --------------- -------------------- --------
Exceptional items totalling GBP113,000 substantially relate to
restructuring.
(*) APCR stands for Air Pollution Control Residues
The segmental results for the six months ended 30 June 2014, for
continuing operations, were as follows:
Augean
Radioactive Augean North
Energy Waste Integrated Industry Sea
and Construction Services Services and Infrastructure Services Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Hazardous landfill
activities 4,585 - - - - 4,585
Non-hazardous landfill
activities 210 - - - - 210
Waste treatment
activities - - 1,060 6,944 - 8,004
Energy generation 53 - - - - 53
APCR(*) management 2,948 - - - - 2,948
Radioactive waste
management - 1,033 - - - 1,033
Processing of offshore
waste - - - - 2,185 2,185
Rental of offshore
equipment and personnel - - - - 3,366 3,366
Waste management &
transfer activities - - 958 - 309 1,267
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Total revenue net of
landfill tax 7,796 1,033 2,018 6,944 5,860 23,651
Landfill tax 2,942 112 - - - 3,054
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Total revenue including
inter-segment sales 10,738 1,145 2,018 6,944 5,860 26,705
Inter-segment sales (722) - (172) (1,015) (67) (1,976)
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Revenue 10,016 1,145 1,846 5,929 5,793 24,729
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Result
Operating profit/(loss)
before exceptional
items 2,924 703 (466) (515) 302 2,948
Exceptional items (25) (25) (32) (94) (25) (201)
-------------------------- ------------------ --------------------
Operating profit/(loss) 2,899 678 (498) (609) 277 2,747
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Finance charges (374)
Central costs (205)
Share of loss of jointly
controlled entity (7)
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Profit before tax 2,160
Tax (421)
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Profit after tax 1,739
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Loss from discontinued
operations (193)
(MORE TO FOLLOW) Dow Jones Newswires
September 22, 2015 02:01 ET (06:01 GMT)
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Profit for the period
and total comprehensive
income 1,546
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Attributable to:
Equity shareholders
of
Augean plc 1,489
Non-controlling
interest 57
-------------------------- ------------------ ------------ ------------ -------------------- ---------- --------
Note that the APCR Management revenue has been restated to
GBP2,948,000 (GBP3,107,000 as previously stated) and Hazardous
landfill activities revenue has been restated to GBP4,585,000
(GBP4,426,000 as previously stated). This reflects the removal of
incinerator bottom ash from the APCR management category, in line
with the 2014 annual report.
5 Taxation
The charge to taxation is based on the estimated effective
corporation tax rate for the year as a whole.
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------- ---------- -----------
Current tax
UK corporation tax on profits for the period
at 21.5% (2014: 21.0%) (632) (397) (873)
Adjustment in respect of prior periods - - (162)
--------------------------------------------- ---------- ---------- -----------
(632) (397) (1,035)
--------------------------------------------- ---------- ---------- -----------
Deferred tax
Charge in respect of current period --(132)
Adjustment in respect of prior periods -- 664
--------------------------------------- -----
-- 532
--------------------------------------- -----
Total tax charge (632) (397) (503)
----------------- ----- ----- -----
Element of total tax charge relating to:
Continuing operations (632) (421) (1,125)
Discontinued operations - 24 622
----------------------------------------- ----- ----- -------
Total tax charge (632) (397) (503)
----------------------------------------- ----- ----- -------
The taxation charge for the six month period ended 30 June 2015
has been based on the anticipated full year effective tax rate of
21.5% (six months ended 30 June 2014: 21.0%).
All deferred tax liabilities and assets have arisen on the
temporary timing differences between the tax base of relevant
assets and their carrying value in the statement of financial
position. No change in deferred tax compared to the position at 31
December 2014 has been reflected in these statements, with the
taxation charge for the six month period to 30 June 2015 all
reflected within current tax, consistent with the 30 June 2014
position.
6 Earnings per share
The calculation of basic earnings per share (EPS) is based on
the profit attributable to ordinary shareholders of GBP2,256,000
(six months ended 30 June 2014: GBP1,489,000, year ended 31
December 2014: GBP4,921,000) and a weighted average number of
ordinary shares outstanding of 102,029,822 (six months ended 30
June 2014: 99,699,414, year ended 31 December 2014: 100,053,156),
calculated as follows:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
------------------------------------------------ ----------- ----------- ------------
Earnings for the purposes of basic and diluted
EPS 2,256 1,489 4,921
Exceptional items (net of associated taxation) 90 301 (884)
------------------------------------------------ ----------- ----------- ------------
Earnings for the purposes of adjusted basic
and diluted EPS 2,346 1,790 4,037
Discontinued operations (net of associated
taxation) - 93 94
------------------------------------------------ ----------- ----------- ------------
Earnings for the purposes of adjusted basic
and diluted EPS for continuing operations
only 2,346 1,883 4,131
------------------------------------------------ ----------- ----------- ------------
Number of shares Number Number Number
Weighted average number of shares for basic
earnings per share 102,029,822 99,699,414 100,053,156
Effect of dilutive potential ordinary shares
from share options 3,000,779 851,221 2,894,941
----------------------------------------------- ------------ ------------ ------------
Weighted average number of shares for diluted
earnings per share 105,030,601 100,550,635 102,948,097
----------------------------------------------- ------------ ------------ ------------
Earnings per share
Basic 2.21p 1.49p 4.92p
Diluted 2.15p 1.48p 4.78p
----------------------------------------------- ------------ ------------ ------------
Adjusted earnings per share
Basic 2.30p 1.80p 4.03p
Diluted 2.23p 1.78p 3.92p
----------------------------------------------- ------------ ------------ ------------
Earnings per share - Continuing operations
Basic 2.21p 1.59p 4.64p
Diluted 2.15p 1.57p 4.51p
----------------------------------------------- ------------ ------------ ------------
Adjusted earnings per share - Continuing
operations
Basic 2.30p 1.89p 4.13p
Diluted 2.23p 1.87p 4.01p
----------------------------------------------- ------------ ------------ ------------
Earnings per share - Discontinued operations
Basic - (0.09)p (0.09)p
Diluted - (0.09)p (0.09)p
----------------------------------------------- ------------ ------------ ------------
The exceptional items have been adjusted, in the adjusted EPS,
to better reflect the underlying performance of the business, when
presenting basic and diluted EPS.
7 Reconciliation of operating profit to cash generated from
operations
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
--------------------------------------------------- ----------- ----------- ------------
Operating profit 3,342 2,541 6,689
Loss from discontinued operations - (217) (342)
Amortisation of intangible assets 36 52 95
Depreciation 2,326 1,904 3,787
Impairment charge - - 5
--------------------------------------------------- ----------- ----------- ------------
Earnings before interest, tax, depreciation
and amortisation (EBITDA) 5,704 4,280 10,234
--------------------------------------------------- ----------- ----------- ------------
Share-based payments 288 90 286
Decrease/(Increase) in inventories 62 (49) (114)
Increase in trade and other receivables (1,034) (2,047) (2,940)
Increase in trade and other payables 2,090 227 1,959
Increase/(decrease) in provisions 242 83 (15)
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