TIDMAVG
RNS Number : 7601F
Avingtrans PLC
25 February 2015
25 February 2015
Avingtrans plc
("Avingtrans" or the "Group")
Interim results for the six months ended 30 November 2014
Avingtrans plc, which designs, manufactures and supplies
critical components, modules and associated services to the
aerospace, energy and medical sectors, today announces its interim
results for the six months ended 30 November 2014.
Financial Highlights
-- Revenue reduced by 14% to GBP27.5m (H1 2014: GBP32.2m)
Affected by Aerospace customer forecast reductions and the oil
price decline
-- Adjusted EBIT increased to GBP0.8m, (H1 2014: GBP0.6m)
-- Adjusted diluted earnings per share was 2.9 pence per share (H1 2014: 2.1 pence per share).
-- Cash generated from operations was GBP0.4m (H1 2014: GBP0.1m)
-- Continuing to invest in capability and capacity: GBP1.5m in the period (H1 2014: GBP2.8m)
-- Net debt was GBP5.7m (31 May 2014: GBP3.6m). Gearing 17%
-- An enhanced Interim dividend of 1.0 pence per share (H1 2014: 0.9 pence)
Highlights of Continuing Operations
Aerospace hampered by key customer forecast changes in H1
-- Customer programme reductions largely confined to H1
Now seeing stability returning to mature business and growth on
new programs
-- Acquisition of competing business RMDG from Tricorn plc
Bolsters Sigma's market leading position in Aerospace pipes
-- A350 PFW Airbus contract won - worth GBP25m of revenue over 10 years
-- Site rationalisation savings underway - Derby merged into Swadlincote (RMDG) site
-- Farnborough concentrating on complex fabrications and Hinckley on pipes
-- China pipe production expanding rapidly, with further growth projected.
Energy and Medical division revenues affected by the reduced oil
price
-- Prospects for Maloney curtailed by oil price - projects delayed or cancelled
-- Divisional restructuring underway - Aldridge manufacturing relocating to Chatteris
-- Aldridge engineering team to be rehoused locally
Aldridge site to be sold, improving the cash position
-- Metalcraft China development still slow, due to reduced Siemens volumes.
-- Crown's markets continue to improve - over GBP2m of new orders booked in H1
Commenting on the results, Roger McDowell, Chairman, said:
"Our first half results have been impacted by previously
reported external factors, so I am pleased to report that we
grasped the nettle of restructuring quickly. As part of the
restructuring programme, we will see some one-off costs this year,
including site closures, mergers and sales, to make us fitter for
the future. Our faith in the Aerospace, Energy and Medical markets
is undiminished and we are forging ahead with our strategy, despite
short-term set-backs. Our confidence in our full year expectations
is underlined by our continued dividend progression, which
investors will, no doubt, welcome."
Enquiries:
Avingtrans plc 01159 499020
Roger McDowell, Chairman
Steve McQuillan, Chief Executive Officer
Stephen King, Chief Financial Officer
Numis 0207 260 1000
David Poutney (Corporate Broking)
Richard Thomas (Corporate Finance and Nominated Adviser)
Newgate (Financial PR) 0207 553 9850
Adam Lloyd
Lois Engstrand
About Avingtrans plc:
Avingtrans has become a significant organisation in the design,
manufacture and supply of critical components, systems and
associated services to global industrial markets from two
divisions: Aerospace and Energy and Medical.
Aerospace
Sigma Components Ltd - UK and China
Sigma is a market leader in rigid and flexible pipe assemblies
and components for prestigious aerospace customers such
as Rolls Royce, Bombardier, Airbus, Safran and Meggitt.
Sigma also manufactures precision prismatic components
and composite components for the aerospace industry from
its purpose-built facilities in the UK and Chengdu, China.
Sigma Components operates from a number of sites, as follows:
Hinckley, UK: centre for rigid pipe assemblies and components
and new product introduction.
Swadlincote, UK: (formerly RMDG): satellite facility to
Hinckley, producing pipe assemblies.
Farnborough, UK: centre for fabrications, ducts and other
complex assemblies.
Chengdu, China: centre for precision prismatic components,
now also producing pipe assemblies.
Buckingham, UK: centre for composite technology, parts
and machining services to customers in Aerospace, F1/Motorsport
and industrial markets.
Sandiacre, UK (C&H): centre for precision polishing and
specialist finishing of aero-engine turbine blades, compressor
blades and vanes for the power generation industries.
Energy and Medical
Stainless Metalcraft Ltd - Chatteris, UK and Chengdu, China
Provider of safety-critical equipment for the energy, medical,
science and research communities, worldwide, specialising
in precision pressure and vacuum vessels and associated
fabrications, sub-assemblies and systems.
Maloney Metalcraft Ltd - Aldridge, UK
Designs, manufactures and services oil and gas extraction
and processing equipment, including process plant for dehydration,
sweetening, drying and compression.
Crown International Ltd - Portishead, UK
Designs and manufactures market-leading pole and support
systems for roadside signage and safety cameras, rail track
signalling and gantries.
Chairman's Statement
Six months is a long time in business, as they say. The oil
price storm brewed up quickly and unexpectedly, catching out large
and small players in the market alike. We were no exception and we
have had to adapt our plans for the Energy and Medical division
rapidly in response, whilst continuing to live within our means.
Programme volume changes and "de-stocking" by major aerospace
customers were also rather unwelcome and only slightly more
predictable. This resulted in a similar rapid adaptation, as we
sought to live up to our "agility" value, without compromising on
quality and integrity. Amidst these rapid course corrections, we
have worked hard to keep our longer-term goals in view, with
continued investments in technology, capability and systems, to
fulfil our strategic ambitions.
In our Aerospace division, the integration of RMDG - acquired
from Tricorn plc - proceeded to plan and we have now moved our
Derby site into this business, to give it the scale required for a
sustainable future. The jolt of the customer forecast reductions in
the first half impelled us to accelerate our restructuring plans at
other sites too and this programme will be completed in the current
financial year. Although the volume reduction has impacted profit
in the period, underlying margins remain sound, albeit tempered by
the on-going investment in new composites technology and the fact
that RMDG was a loss making business in the first half. Customer
quality and delivery profiles continue to improve and our main
trading partners appreciate our consistency.
Similarly, in Energy and Medical, the oil price shock
precipitated rapid restructuring actions and we are now enacting a
plan to relocate the manufacturing facility at Aldridge.
Henceforth, all UK manufacturing for Maloney and Metalcraft will
take place at Chatteris, with China still building slowly. The
engineering and technical team from Maloney will be relocated to a
new facility and the Aldridge site will then be sold, producing a
cash benefit. Consequently, results for the division were well
behind the original budget in the first half and full year
forecasts have been adjusted accordingly. However, investments in
capability and new systems continue, to make the business leaner
and fitter. Separately, Crown's steady recovery continues with a
healthy new order book in the first half.
The end result of the restructuring activity will be a headcount
reduction of over 10% across the group, with fewer sites and an
improved cost base. It is never easy to let good people go and we
do so with a heavy heart, but the stable future of the group as a
whole is paramount, to sustain the significant skilled workforce we
now have. Our customer relationships are generally excellent and
our commitment to quality, delivery and value for money means that
we are a supplier of choice for many of the biggest OEMs in our
sectors. This reputation is hard won and uppermost in our minds
when we are thinking about how to position our businesses for the
future, throughout a testing period.
Our commitment to the Civil Aerospace, Energy and Medical
Imaging markets is unshaken and these markets continue to provide
many opportunities. However, the combined effects of the programme
volume changes and the oil price reduction have seen a 14% year on
year decline in our revenues, with an attendant impact on profits.
Aerospace volumes have now stabilised and the oil sector forecast
can't get materially any worse for us, so we anticipate an improved
result in the second half. The enhanced Interim dividend once again
underlines our commitment to a progressive dividend policy and
improving overall shareholder returns, notwithstanding short-term
events.
On behalf of our customers, investors and the Board, I would
like to thank our employees for their hard work and perseverance
during a challenging period.
Roger McDowell
Chairman
25 February 2015
Business Review
Group Performance
Revenue: impacted by aerospace programme changes and oil
price
Both divisions were impacted by external events in H1, with
revenues reduced by 14% overall, to GBP27.5m (H1 2014: GBP32.2m).
The aerospace programme changes have stabilised, but the continuing
low oil price means that our prospects in that sector remain
subdued. Restructuring is underway in both divisions, to mitigate
the effects of the revenue changes.
Profit: reduced revenues fed through to reduced profits in the
first half
Profit figures were down in H1, though the restructuring
activities and recovering sales are expected to improve the results
in the second half. The Aerospace sites are now specialising in
different specific activities to optimise future results and, for
Energy and Medical, manufacturing at the Aldridge site will
transfer to Chatteris. Adjusted EBIT increased to GBP0.8m (H1 2014:
GBP0.6m).
Earnings per Share (EPS):
Adjusted diluted earnings per share for the period ended 30
November 2014 was 2.9 pence per share (H1 2014: 2.1 pence per
share) based on weighted average number of shares of 28,160,575 (H1
2014: 28,327,057).
Funding and Liquidity: stable debt position, despite market
turbulence
The net cash flow from operations was GBP0.4m, (H1 2014:
GBP0.1m).
Net debt at 30 November 2014 stood at GBP5.7m, (31 May 2014:
GBP3.6m). Gearing 17% (31 May 2014: 11%). Note that GBP1.2m of the
increased debt relates to the all-cash acquisition of RMDG
Aerospace from Tricorn plc.
Dividend: consistent progression maintained
The Board has recommended an Interim dividend of 1.0 pence per
share (H1 2014: 0.9 pence per share) which will be paid on 19 June
2015 to shareholders on the register at 29 May 2015.Our commitment
to a progressive policy underlines our confidence in the long-term
outlook for the business.
Operations
Aerospace Division (Sigma Components)
The 15% year on year revenue decline in the first half has taken
its toll on the short-term result for the division. This was
precipitated by key customer programme rate changes and
buffer-stock reductions which filtered down through the whole
supply chain. In response, Sigma accelerated its site
rationalisation plans, resulting in us merging the Derby facility
into the newly acquired Swadlincote site. The integration of the
new site is proceeding as expected and should put RMDG on a much
sounder footing and make the business sustainable for the future.
Excluding RMDG revenues of GBP0.9m, the division would be 19% down
on sales year on year. However, as RMDG lost GBP0.2m in the period,
underlying Aerospace margins were 9% (2014:10%).
Additionally, we have been moving products between the
Farnborough, Hinckley and Chengdu sites, to optimise their
specialisms on particular product types and volumes. This results
in better performance for the customers, as well as improving our
cost control for the future. Coupled with the on-going Epicor ERP
system roll-out and the government sponsored "Sharing in Growth"
programme, we now have the makings of a really excellent supply
network under our control. This will make us more competitive and
we have seen the first evidence of this in our recent GBP25m/10year
contract win for PFW/Airbus, relating to parts for the A350
programme.
Indeed, although we have seen a revenue decline in the first
half of this year, volumes now seem to be stable and the underlying
market conditions remain positive. This confirms that the issue was
restricted to a supply chain and is not a market wide problem.
Our composites business continues to pursue its strategic aim of
developing new products and capability for the division. To this
end, the "Compipe" EU-funded technology project has advanced
positively, producing unique IP. This is encouraging and we are now
pursuing other sources of funding to continue with our new product
ambitions. It seems like the exciting products we are developing
will have applications beyond aerospace, so we will need to decide
the best way to develop this technology in due course.
With the revenue reduction and continued investment in
technology, Aerospace margins were squeezed down to 7% in H1 (2014:
10%) but we expect some improvement to these margins in the second
half, as volumes recover.
Summarising activities at the Aerospace sites:
-- Hinckley bore the brunt of the volume reduction in H1 and the
structure is being adjusted accordingly, whilst allowing for
anticipated new programme growth.
-- After the RMDG acquisition, the Swadlincote and Derby
operations have been merged, to give this operation critical mass
and make it sustainable for the future.
-- Farnborough's positive improvement track continued, with
quality and delivery performance enhancements being recognised by
its customers.
-- Chengdu continued to develop as planned. Pipe production and
assembly is now expanding there, in anticipation of further growth
in the next financial year.
-- Buckingham (Composites) made steady technological progress
and we believe that the new patentable, technology we are
developing will become the mainstay of this business in future,
whilst continuing to reduce our exposure to the volatile F1 and
motorsport sectors.
-- Sandiacre's (C&H, Polishing) positive progress continued
in H1, with the operation being our most dependable site in terms
of revenue and profit predictability.
Energy & Medical Division (Metalcraft, Maloney Metalcraft
and Crown)
As investors will recall, we bought Maloney Metalcraft from
Exterran at the start of the last financial year. The business was
in a distressed state and we set about restoring its position in
the oil and gas market, from a low base point. This restoration was
progressing according to plan until the start of the oil price
reduction, which began around September 2014, at which time no-one
anticipated the scale of the reduction that was to follow. As
events have unfolded, our prospect bank has deteriorated and we
have rebased our forecasts and accelerated our restructuring plans,
to cope with the downturn in business.
Therefore, we have taken the decision to exit the Aldridge
manufacturing site and the process to sell the building is now
underway. Manufacturing operations will henceforth be centred at
Chatteris, whilst a new leased facility in the Aldridge area will
house our engineering and technical team. This structure supports
an important decision to change the make/buy balance in the Maloney
business, which will see us globally outsource more of the
manufacturing for oil and gas projects than in the past. Strategic
manufacturing capability will be retained at Chatteris and we will
continue to control design, final assembly and test in the group.
This change allows the Maloney business to be more competitive in
this market and also to adjust better to the variable project
workload over time than previously.
The other manufacturing operations at Chatteris are unaffected
and we continue to work there on the new manufacturing systems
deployment and with the government sponsored "Sharing in Growth"
programme, to improve the capability of this site. Progress on this
journey is encouraging.
The development of Metalcraft China has been sluggish,
principally due to Siemens ramp rate there, as previously reported.
In response, we are in dialogue with other customers in the Asian
medical imaging market to make up the shortfall and widen the
business base. In light of the oil and gas downturn, we have
reviewed our operations there carefully and decided that we should
persevere for the long-term, despite the slow progress.
On a brighter note, the results for Crown remain encouraging,
with a modest first half profit and a pleasing set of project wins,
worth over GBP2m of revenue in the period.
Overall, divisional sales were down by 13% versus the first half
of last year, driven by the lack of sales at Maloney, which was
precipitated by the oil price reduction. This resulted in a first
half loss, albeit at an underlying running rate which was less than
the prior year. The restructuring plan will start to bear fruit in
the second half and we expect a material improvement in results for
the division, as a consequence of the reduced costs and also from
higher sales in sectors other than oil & gas.
Outlook
Our Aerospace strategy is working and the drive to diversify our
customer base is evident in the PFW Airbus contract win. The
transformation of Energy and Medical has been severely challenged
by the oil price, but this accelerated our plans and pushed us
further into new sectors other than oil & gas.
Whilst the short-term results are below our original
expectations, our strategic plans for the group remain intact.
Sigma Components and Metalcraft are leading players in their niche
markets and both businesses are becoming world class supply chain
partners. Despite recent market issues, our strategy should lead to
growing investor returns, as stability is restored. With robust,
long-term blue-chip customer relationships, we remain confident
about the future of Avingtrans and achieving the Board's full year
expectations.
Roger McDowell Steve McQuillan Stephen King
Chairman Chief Executive Officer Chief Financial Officer
25 February 2015 25 February 2015 25 February 2015
Consolidated Income Statement (Unaudited)
for the six months ended 30 November 2014
6 months 6 months Year to
to to
30 Nov 30 Nov 31 May
2014 2013 2014
GBP'000 GBP'000 GBP'000
Revenue 27,545 32,195 60,265
Cost of sales (21,491) (26,278) (45,808)
Gross profit 6,054 5,917 14,457
Distribution costs (632) (753) (1,266)
---------------------------------- --------- --------- ---------
Share based payment expense (24) (24) (46)
Acquisition costs (68) (172) (171)
Restructuring costs (180) (130) (269)
Start-up costs - China (237) (149) (318)
Amortisation of intangibles from
business combinations (69) (69) (137)
Other administrative expenses (4,489) (4,596) (12,181)
---------------------------------- --------- --------- ---------
Total administrative expenses (5,067) (5,140) (13,122)
Bargain purchase on acquisition - 2,916 2,615
Operating profit 355 2,940 2,684
Finance income 1 1 8
Finance costs (97) (75) (166)
Profit before taxation 259 2,866 2,526
Taxation (Note 3) (34) 89 388
Profit for the financial period 225 2,955 2,914
Earnings per share :
From continuing operations
- Basic 0.8p 10.7p 10.6p
- Diluted 0.9p 10.4p 10.4p
Consolidated statement of comprehensive income (Unaudited)
for the six months ended 30 November 2014
6 months 6 months Year to
to to
30 Nov 30 Nov 31 May
2014 2013 2014
GBP'000 GBP'000 GBP'000
Profit for the period 225 2,955 2,914
Exchange differences on translation
of foreign operations 334 22 (357)
Total comprehensive income for the
period 559 2,977 2,557
Consolidated cash flow statement (Unaudited)
for the six months ended 30 November 2014
6 months 6 months Year to
to to
30 Nov 30 Nov 31 May
2014 2013 2014
GBP'000 GBP'000 GBP'000
Operating activities
Cash flows from operating activities 476 (17) 1,787
Finance costs paid (97) (74) (166)
Income tax repaid/(paid) 30 174 (71)
Net cash inflow from operating activities 409 83 1,550
Investing activities
Acquisition of subsidiary undertakings
(Note 5) (1,137) 2,039 2,039
Finance income 1 1 8
Purchase of intangible assets (861) (669) (1,275)
Purchase of property, plant and
equipment (671) (2,110) (2,992)
Proceeds from sale of property,
plant and equipment 270 56 320
Net cash used by investing activities (2,398) (683) (1,900)
Financing activities
Equity dividends paid (248) (189) (599)
Repayments of bank loans (283) (329) (680)
Repayments of obligations under
finance leases (526) (322) (786)
Proceeds from issue of ordinary
shares - 137 137
Borrowings raised 274 373 1,188
Net cash outflow from financing
activities (783) (330) (740)
Net decrease in cash and cash equivalents (2,772) (930) (1,090)
Cash and cash equivalents at beginning
of period 1,428 2,681 2,681
Effect of foreign exchange rate
changes 143 (13) (163)
Cash and cash equivalents at end
of period (1,201) 1,738 1,428
Cashflows from operating activities (Unaudited)
for the six months ended 30 November 2014
6 months 6 months Year to
to to
30 Nov 30 Nov 31 May
2014 2013 2014
GBP'000 GBP'000 GBP'000
Profit before income tax from continuing
operations 259 2,866 2,526
Adjustments for:
Depreciation of property, plant
and equipment 665 635 1,229
Amortisation of intangible assets 471 435 891
Profit on disposal of property,
plant and equipment (166) (30) (261)
Finance income (1) (1) (8)
Finance expense 97 75 166
Share based payment charge 24 24 46
Bargain purchase on acquisition - (2,916) (2,615)
Changes in working capital
Increase in inventories (1,128) (704) (146)
Decrease/(increase) in trade and
other receivables 732 (450) 1,564
(Decrease)/increase in trade and
other payables (326) 46 (1,611)
Decrease in provisions (154) - -
Other non cash changes 3 3 6
Cash inflow/(outflow) from operating
activities 476 (17) 1,787
Summarised consolidated balance sheet (Unaudited)
at 30 November 2014
30 Nov 30 Nov 31 May
2014 2013 2014
GBP'000 GBP'000 GBP'000
Non current assets
Goodwill 9,557 9,557 9,557
Other intangible assets 3,109 2,541 2,691
Property, plant and equipment 12,984 12,867 12,607
Deferred tax 83 70 83
25,733 25,035 24,938
Current assets
Inventories 12,979 11,701 11,071
Trade and other receivables 17,145 19,875 17,740
Current tax asset 74 26 104
Cash and cash equivalents 6,287 7,991 7,204
36,485 39,593 36,119
Total assets 62,218 64,628 61,057
Current liabilities
Trade and other payables (15,577) (18,327) (15,811)
Obligations under finance leases (769) (657) (773)
Borrowings (7,882) (6,996) (6,436)
Current tax liabilities (189) (515) (129)
Provisions (535) - (689)
Total current liabilities (24,952) (26,495) (23,838)
Non-current liabilities
Borrowings (2,253) (2,533) (2,267)
Obligations under finance leases (1,066) (1,079) (1,341)
Deferred tax (957) (1,057) (983)
Total non-current liabilities (4,276) (4,669) (4,564)
Total liabilities (29,228) (31,164) (28,402)
Net assets 32,990 33,464 32,655
Equity
Share capital 1,379 1,380 1,379
Share premium account 10,818 10,818 10,818
Capital redemption reserve 814 814 814
Merger reserve 402 402 402
Translation reserve (263) (218) (597)
Other reserves 180 180 180
Investment in own shares (1,000) (1,000) (1,000)
Retained earnings 20,660 21,088 20,659
Total equity attributable to equity
owners of the parent 32,990 33,464 32,655
Consolidated statement of changes in equity (Unaudited)
at 30 November 2014
Capital Investment
Share Share redemp- Trans- in own
capital premium tion Merger lation Other shares Retained
account account reserve reserve reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 June 2013 1,353 10,305 814 402 (240) 180 (597) 18,298 30,515
Shares issued 27 513 - - - - - - 540
Dividend paid - - - - - - - (189) (189)
Investment in
own shares - - - - - - (403) - (403)
Share-based payments - - - - - - - 24 24
-------- -------- -------- -------- -------- --------- ---------- --------- --------
Transactions
with owners 27 513 - - - - (403) (165) (28)
Profit for the
period - - - - - - - 2,955 2,955
Other comprehensive
income
Exchange rate
gain - - - - 22 - - - 22
-------- -------- -------- -------- -------- --------- ---------- --------- --------
Total comprehensive
income for the
year - - - - 22 - - 2,955 2,977
At 30 Nov 2013 1,380 10,818 814 402 (218) 180 (1,000) 21,088 33,464
======== ======== ======== ======== ======== ========= ========== ========= ========
At 1 Dec 2013 1,380 10,818 814 402 (218) 180 (1,000) 21,088 33,464
Shares issued (1) - - - - - - - (1)
Dividend paid - - - - - - - (410) (410)
Share-based payments - - - - - - - 22 22
-------- -------- -------- -------- -------- --------- ---------- --------- --------
Transactions
with owners (1) - - - - - - (388) (389)
Loss for the
period - - - - - - - (41) (41)
Other comprehensive
income
Exchange rate
loss - - - - (379) - - - (379)
-------- -------- -------- -------- -------- --------- ---------- --------- --------
Total comprehensive
income for the
year - - - - (379) - - - (379)
At 31 May 2014 1,379 10,818 814 402 (597) 180 (1,000) 20,659 32,655
======== ======== ======== ======== ======== ========= ========== ========= ========
At 1 June 2014 1,379 10,818 814 402 (597) 180 (1,000) 20,659 32,655
Dividend paid - - - - - - - (248) (248)
Share-based payments - - - - - - - 24 24
-------- -------- -------- -------- -------- --------- ---------- --------- --------
Transactions
with owners - - - - - - - (224) (224)
Profit for the
period - - - - - - - 225 225
Other comprehensive
income
Exchange rate
gain - - - - 334 - - - 334
-------- -------- -------- -------- -------- --------- ---------- --------- --------
Total comprehensive
income for the
year - - - - 334 - - 225 559
At 30 Nov 2014 1,379 10,818 814 402 (263) 180 (1,000) 20,660 32,990
======== ======== ======== ======== ======== ========= ========== ========= ========
Notes to the half year statement
30 November 2014
1. Basis of preparation
The Group's interim results for the six month period ended 30
November 2014 are prepared in accordance with the Group's
accounting policies which are based on the recognition and
measurement principles of International Financial Reporting
Standards ('IFRS') as adopted by the EU and effective, or expected
to be adopted and effective, at 31 May 2014. As permitted, this
interim report has been prepared in accordance with the AIM rules
and not in accordance with IAS34 'Interim financial reporting'.
These interim results do not constitute full statutory accounts
within the meaning of section 434 of the Companies Act 2006 and are
unaudited. The unaudited interim financial statements were approved
by the Board of Directors on 24 February 2015 and will shortly be
available on the Group's website at
http://www.avingtrans.plc.uk/pages/reports.html.
The consolidated financial statements are prepared under the
historical cost convention as modified to include the revaluation
of financial instruments. The accounting policies used in the
interim financial statements are consistent with IFRS and those
which will be adopted in the preparation of the Group's annual
report and financial statements for the year ended 31 May 2015. The
statutory accounts for the year ended 31 May 2014, which were
prepared under IFRS, have been filed with the Registrar of
Companies. These statutory accounts carried an unqualified
Auditor's Report and did not contain a statement under either
Section 498(2) or (3) of the Companies Act 2006.
2. Segmental analysis
Aerospace Energy Unallocated Total
and Central
Medical items
GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 30
Nov 2014
Revenue 17,410 10,135 - 27,545
Operating profit/(loss) 1,236 (467) (414) 355
Year ended 31 May
2014
Revenue 38,528 21,737 - 60,265
Operating profit/(loss) 4,350 (1,243) (423) 2,684
6 months ended 30
Nov 2013
Revenue 20,491 11,704 - 32,195
Operating profit/(loss) 2,007 1,254 (321) 2,940
3. Taxation
The taxation credit/(charge) is based upon the expected
effective rate for the year ended 31 May 2015.
4. Earnings per share
Basic earnings per share is based on the earnings attributable
to ordinary shareholders and the weighted average number of
ordinary shares in issue during the year.
For diluted earnings per share the weighted average number of
ordinary shares is adjusted to assume conversion of all dilutive
potential ordinary shares, being the CSOP and EMI share
options.
6 months 6 months Year to
to to 31 May 2014
30 Nov 2014 30 Nov 2013 No
No No
Weighted average number of
shares - basic 27,587,564 27,587,564 27,363,979
Share Option adjustment 573,011 739,493 716,303
Weighted average number of
shares - diluted 28,160,575 28,327,057 28,080,282
GBP'000 GBP'000 GBP'000
Earnings from continuing operations 225 2,955 2,914
Share based payments 24 24 46
Restructuring costs 180 130 269
Start up costs - China 237 149 318
Bargain purchase on acquisition - (2,916) -
Acquisition costs 68 172 171
Amortisation of intangibles 69 69 137
Adjusted earnings from continuing
operations 803 583 3,855
From continuing operations:
Basic earnings per share 0.8p 10.7p 10.6p
Adjusted basic earnings per
share 2.9p 2.1p 14.1p
Diluted earnings per share 0.9p 10.4p 10.4p
Adjusted diluted earnings
per share 2.9p 2.1p 13.7p
The Directors believe that the above adjusted earnings per share
calculation from continuing operations is the most appropriate
reflection of the Group performance.
5. Acquisition of subsidiary
On 11 August 2014 the group acquired the trade and certain
business assets and liabilities relating to the manufacture of
aerospace components of RMDG Aerospace Ltd.
The provisional net assets at the date of acquisition were as
follows:
GBP'000
Fair value of assets and liabilities acquired 1,137
=======
Fair value of consideration transferred:
Cash 1,137
-------
Consideration 1,137
Cash acquired -
Acquisition costs charged to expenses 68
-------
Net cash paid relating to the acquisition 1,205
=======
As a consequence of buying the business in a distressed state,
the Directors consider that no intangible assets have been
acquired.
The impact of the RMDG acquisition on the consolidated income
statement is as follows:
GBP'000
Revenue 870
Gross profit 96
Overheads (219)
Acquisition costs (68)
Overall effect on the Consolidated income statement (191)
Since acquisition RMDG contributed the following to the Group's
cashflows:
GBP'000
Operating cashflows (328)
Investing activities -
Financing activities -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PKQDQPBKDBBB
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