TIDMCIU
RNS Number : 8286H
Cape plc
23 August 2016
Embargoed: 0700hrs, 23 August 2016
Cape plc
("Cape" or "the Group")
Interim Results
Cape plc, an international leader in the provision of critical
industrial services to the energy and natural resources
sectors,
announces its unaudited half-year results for the period ended 3
July 2016.
Mixed results for the first half with full year expectation
unchanged
Financial summary
H1 2016 H1 2015(1) Change
Financial highlights:
Continuing operations:
Revenue GBP396.3m GBP359.5m +10%
Adjusted operating profit GBP18.9m GBP25.1m (25%)
Adjusted operating profit margin 4.8% 7.0% (220bps)
Adjusted profit before tax GBP14.9m GBP21.4m (30%)
Adjusted diluted earnings per
share 8.9p 13.2p (33%)
Interim dividend per share 4.5p 4.5p -
Adjusted net debt GBP113.7m GBP131.3m (13%)
Statutory results:
Operating profit GBP6.8m GBP22.8m (70%)
Profit before tax GBP1.4m GBP17.6m (92%)
Diluted earnings per share 0.2p 10.3p (98%)
(1) Prior year figures have been restated to exclude Hong Kong
operations which were discontinued in 2015.
Operating Highlights
-- A strong revenue performance, driven by Asia Pacific,
partially offsetting weaker than expected margins in the UK
resulting in 25% reduction in group operating profit
o The UK business performed below expectation as operating
margins were adversely affected by weakness in the offshore North
Sea and thermal coal power generation markets, and poor commercial
performance on the ExxonMobil contract at Fawley
o The Asia Pacific business performed above expectation driven
by increased project activity in Australia, South Korea and
Singapore
o The Middle East business delivered a solid performance with a
strong contribution from the SOCAR-Cape joint venture in Azerbaijan
mitigating the effect of increased cost pressures from clients
across the region
-- The Redhall Engineering Solutions acquisition, rebranded as Cape Engineering Services, is
now fully integrated into the UK business and has performed ahead of expectations
-- The UK business is being restructured to maximise capability for growth through delivering the full portfolio of services to the Group's customer base whilst reducing overhead costs
Financial Highlights
-- Order intake during the first half decreased to GBP309m (H1
2015: GBP399m), largely due to the timing of key contract awards
resulting in an order book of GBP820m at period end (5 July 2015:
GBP800m; 31 December 2015: GBP861m)
-- Revenue increased by 10% to GBP396.3m (H1 2015: GBP359.5m)
with a small benefit from exchange rate movement and a full period
from the Redhall Engineering Solutions acquisition completed in May
2015. At constant currency organic revenues increased by 6%
-- The Group achieved an excellent cash conversion of 73%,
resulting in a period-end adjusted net debt of GBP113.7m (5 July
2015: GBP131.3m; 31 December 2015: GBP109.9m)
-- Adjusted diluted earnings per share from continuing operations was 8.9p (H1 2015: 13.2p)
-- IDC provision increased by GBP8.7m largely reflecting the
result of recent litigation in respect of employer liability claims
being brought by Aviva
-- The Group has declared an interim dividend of 4.5p (H1 2015:
4.5p) per share underlying the Board's confidence in the
business
-- Expectations for the full year unchanged with a higher profit
weighting in the second half driven by increasing project activity,
the effects of the restructuring in the UK and the benefit of
foreign exchange tailwinds.
Changes to segmental reporting
The Group has re-organised its geographical reporting segments
during the period as outlined below. The change in reporting
segments has been performed to align external reporting with the
revised internal management structure. All prior year figures have
been restated accordingly.
Old segments New segments
UK, Europe & CIS(1) UK
MENA Middle East(2)
Asia Pacific Asia Pacific(3)
(1) CIS refers to Kazakhstan, Azerbaijan and Sakhalin.
(2) Includes Kazakhstan and Azerbaijan.
(3) Includes Sakhalin.
Commenting on the results, Joe Oatley, Chief Executive of Cape
said:
"The first half results demonstrate the value of Cape's strategy
of developing a balanced business across the maintenance and new
construction segments with a broad geographical spread. Although we
have seen a deterioration in a number of our markets, overall the
Group has delivered solid top-line growth, highlighting the
resilience of our business. We continue to invest in order to
deliver on strategic goals whilst adapting our cost base where
necessary to match market conditions. Despite the challenges in
many of our markets, our expectation of the financial result for
the full year is unchanged."
Throughout this document, various management measures are used
and referred to as adjusted. These are defined and reconciled
within note 6 'Adjusted measures'.
Analyst meeting
The Group will be presenting to a meeting of analysts at 9.30am
today at the office of Buchanan, 107 Cheapside, London, EC2V 6DN.
The presentation will shortly be available on the Company's website
at:
www.capeplc.com/investors/financial-results-and-presentations.aspx
Enquiries
Cape plc
Joe Oatley, Chief Executive +44 (0) 1895 459 979
Michael Speakman, Chief Financial Officer +44 (0) 1895 459 979
Ronan Tyrrell, Interim Head of Investor Relations +44 (0) 1895 459 979
Buchanan
Bobby Morse, Ben Romney, Chris Judd +44 (0) 207 466 5000
Forward looking statements
Any forward looking statements made in this document represent
the Board's best judgement as to what may occur in the future.
However, the Group's actual results for the current and future
fiscal periods and corporate developments will depend on a number
of economic, competitive and other factors, some of which will be
outside the control of the Group. Such factors could cause the
Group's actual results for future periods to differ materially from
those expressed in any forward looking statements included in this
announcement.
About Cape:
Cape (www.capeplc.com), which is premium listed on the main
market of the London Stock Exchange, is an international leader in
the provision of critical industrial services principally to the
energy and natural resources sectors. Our multi-disciplinary
service offering includes access systems, insulation, specialist
coatings, passive fire protection, refractory linings,
environmental services, oil and gas storage tanks and heat
exchanger replacement and refurbishment.
Cape employs c. 16,400 people working across 19 countries and in
2015 reported revenue of GBP711.4 million.
INTERIM MANAGEMENT REVIEW
Summary
Trading for the first six months of 2016 has been mixed with
increased volume and margin in the Asia Pacific region but lower
than anticipated margins in the UK. Despite challenging market
conditions, Cape delivered solid revenue growth driven by an
increase in activity on key projects in Asia Pacific along with the
impact of a full six months of trading for Cape Engineering
Services (previously Redhall Engineering Solutions). The Board
expects a higher than normal weighting for earnings in the second
half of the year as project volumes increase, the benefit of cost
reductions is realised in the UK business and from favourable
translational effect of current exchange rates. The Board has
declared a dividend of 4.5p per share.
Order intake for the first half of 2016 decreased by 23% to
GBP309 million (H1 2015: GBP399 million) reflecting the timing of
key maintenance contract renewals and challenging conditions in a
number of the Group's key markets. The business continues to be
successful in securing target contracts with a number of key awards
in the period, including a new 5 year maintenance contract for
ConocoPhillips at its Seal Sands facility and a 3 year extension of
the Group's multidisciplinary maintenance contract with SABIC in
the UK. Bidding activity in the UK is currently high including the
recent submission of a bid for the renewal of the UK business' five
year BP Federal Maintenance contract which is expected to be
determined in the second half of the year. Bidding activity in the
Middle East remains high and the Group has secured a number of
strategic contract awards including a multi-country master services
agreement with General Electric Power Services to provide access
and insulation services to its 64 power facilities across the
region, and further scope expansion on the important Jazan project
in the Kingdom of Saudi Arabia ("KSA").
The Group's order book was GBP820 million at 3 July 2016 in
comparison to GBP861 million at 31 December 2015 and GBP800 million
at 5 July 2015. The reported order book excludes the order book
value associated with joint ventures where the Group holds a
minority interest. Cape's share of the SOCAR-Cape joint venture
order book in Azerbaijan was GBP54 million at 3 July 2016 (31
December 2015: GBP55 million; 5 July 2015: GBP37 million).
Group revenue from continuing operations increased by 10% to
GBP396.3 million (H1 2015: GBP359.5 million). Positive foreign
exchange movements accounted for 1% of this increase with a further
3% from a full six month contribution from Cape Engineering
Services which was acquired in May 2015. The organic growth of 6%
was largely driven by the ramp-up of activity on key projects in
Asia Pacific including Chevron's Wheatstone LNG plant and
Woodside's Karratha Gas Plant life extension programme (KLE).
Adjusted operating profit from continuing operations decreased
to GBP18.9 million (H1 2015: GBP25.1 million) with adjusted
operating margin falling to 4.8% (H1 2015: 7.0%). The reduction in
margin was largely driven by the UK business which was impacted by
a significant reduction in demand for its specialist services from
the offshore North Sea market and poor commercial performance on
maintenance and shutdown work for the ExxonMobil contract at the
Fawley refinery. Margins in the Middle East business remained
resilient as anticipated at a lower level than the first half of
2015 as the business benefited from a number of one-off favourable
contract settlements in the prior period.
The Asia Pacific region delivered a much improved performance
with revenue increasing by 50% and adjusted operating profit
increasing by 108% largely due to increasing volumes on a number of
key projects in Australia, Singapore and South Korea.
The Group achieved an adjusted operating cash inflow for the
first half of 2016 of GBP13.8 million (H1 2015: GBP1.2 million).
Adjusted net debt of GBP113.7 million (H1 2015: GBP131.3 million;
31 December 2015: GBP109.9 million) has been positively impacted by
the improved working capital position.
Progress on strategy
Cape continues to make progress on the implementation of its
strategy, despite the considerable challenges in a number of its
markets. The importance of having geographical diversity is
demonstrated by the improved results from our business in
Azerbaijan and Asia Pacific mitigating a weaker than anticipated
performance in the UK. In line with our stated strategy, the Group
expanded its geographic footprint in the first half of the year by
signing a joint venture agreement with Olio Resources to serve the
Malaysian market and by securing a number of key construction
contracts in Kuwait. The recently signed contract with GE Power
Services across the Middle East will also enable the Group to
expand its operations into Iraq.
The value of developing close relationships with key clients,
supported by excellence in operational delivery is demonstrated by
the recently secured contract to provide the cryogenic insulation
for Shell's Prelude Floating LNG vessel being constructed in South
Korea. This important project will provide a strong reference for
Cape in this new market segment.
Operational Excellence remains the cornerstone of our strategy
as it enables Cape to deliver better value to our clients whilst
protecting margins in today's challenging market conditions. We
continue to invest in both our processes and people in order to
drive improvement in productivity and operational safety,
delivering increased value to our clients.
We have continued with our strategy to sustain a steady revenue
stream from maintenance services which has provided stability in
volatile markets. Revenue from maintenance activities in the first
half of 2016 were GBP237 million (H1 2015: GBP256 million)
representing 60% of total revenue. The reduction in maintenance
volume stems primarily from the closure of the Longannet and
Ferrybridge power stations in the UK and reduced maintenance
activity in Australia.
We continue to expand the range of services we offer to our
clients. Although progress on expanding our tank construction and
maintenance business into the Middle East has been slower than we
had hoped, the Group now has this capability firmly established in
the region with work underway on a small number of storage tank
contracts in the UAE. The market for storage tank services in the
Middle East remains substantial and we continue to target this work
across the region. The award of the mechanical service contract by
ConocoPhillips at their Seal Sands facility was an important
milestone for the UK business in the development of our broader
service offering in this market.
Financial overview
A summary income statement with explanatory discussion of each
of the key items is provided below:
GBPm unless otherwise H1 2016 H1 2015(1) H1 2016 H1 2015(1)
stated
--------------------------- -------- ----------- ----------------------- --------- -----------
Continuing operations: Adjusted measures Continuing operations: Statutory Reporting
Revenue 396.3 359.5 Revenue 396.3 359.5
Adjusted operating profit 18.9 25.1 Operating profit 6.8 22.8
Adjusted operating profit Operating profit
margin 4.8% 7.0% margin 1.7% 6.3%
Adjusted profit before
tax 14.9 21.4 Profit before tax 1.4 17.6
Adjusted diluted earnings Diluted earnings
per share 8.9p 13.2p per share 0.1p 10.5p
--------------------------- -------- ----------- ----------------------- --------- -----------
Revenue from continuing operations increased by 10% to GBP396.3
million (H1 2015: GBP359.5 million) of which 1% relates to foreign
exchange movements, 3% from a full six month contribution from Cape
Engineering Services and 6% from organic growth. The underlying
increase of 6% was largely driven by increased volume from a number
of projects in the Asia Pacific region.
Adjusted operating profit from continuing operations decreased
to GBP18.9 million (H1 2015: GBP25.1 million) primarily driven by
margin reduction in the UK business, in particular for its
specialist services offering for the offshore North Sea market and
the poor commercial performance on the maintenance contract at the
Fawley refinery.
This reduction has been partially offset by:
-- a 3% favourable translation impact of foreign exchange
-- a 15% saving in central overheads due to favourable
transaction impact of foreign exchange and changes to the group
management structure.
Adjusted diluted earnings per share from continuing operations
was 8.9p (H1 2015: 13.2p) on adjusted earnings attributable to
equity shareholders of GBP10.8 million (H1 2015: GBP16.0
million).
Diluted earnings per share from continuing operations were 0.1p
(H1 2015: 10.5p) after reflecting the increase in the Industrial
Disease Claims provision of GBP8.7 million which was recognised in
the first half of the year. The increase in the provision has been
shown within other items in the Consolidated Income Statement on
page 13.
Regional review
The Group reports its financial results from a geographic
perspective under three reporting regions that have been
re-organised during the period in order to align external reporting
with the revised internal management structure.
Revenue Adjusted operating Adjusted operating
(GBPm) profit profit margin
(GBPm) (%)
H1 2016 H1 2015(1) H1 2016 H1 2015(1) H1 2016 H1 2015(1)
-------------- -------- ----------- -------- ----------- -------- -----------
Region
UK 194.0 191.8 8.4 15.8 4.3% 8.2%
Middle East 94.2 95.4 13.0 15.7 13.8% 16.5%
Asia Pacific 108.1 72.3 5.0 2.4 4.6% 3.3%
Central (7.5) (8.8) n/a n/a
396.3 359.5 18.9 25.1 4.8% 7.0%
-------------- -------- ----------- -------- ----------- -------- -----------
Throughout this document, various management measures are used
and referred to as adjusted. These are defined and reconciled
within note 6 'Adjusted measures'.
(1) Prior year figures have been restated to exclude Hong Kong
operations which were discontinued in 2015.
Regional review (continued)
UK
Market conditions
Market conditions in the UK region continued to be challenging
throughout the first half of the year. Given the further reduction
in the oil price, which reached a low of US$28/bbl in early 2016,
the offshore market in the North Sea has experienced a particularly
difficult period with customers choosing to defer discretionary
spending, causing a significant decline in demand for the Group's
specialist services. Customers continue to seek ways in which to
reduce their costs and this is likely to bring increased pricing
pressure across this sector.
As anticipated, demand from the thermal coal power station
market reduced, with the closure of Longannet and Ferrybridge power
stations in March 2016. Demand from the downstream and general
industrial segments remained robust.
Results
Order intake decreased by 27% to GBP162 million (H1 2015: GBP223
million) due to the combination of challenging market conditions
and the timing of contract renewal dates. Nonetheless, the business
was successful in securing a number of key target contracts
including a three year renewal of its multidisciplinary maintenance
contract with SABIC UK and a five year contract for fabrication,
mechanical, engineering and instrumentation services at
ConocoPhillips' Seal Sands facility.
Revenue increased by 1% from the prior period to GBP194.0
million (H1 2015: GBP191.8 million), with a decline in revenue from
contracts in the North Sea being offset by increased volumes from
Motherwell Bridge and a full six month contribution from Cape
Engineering Services. Excluding the benefit of the Cape Engineering
Services acquisition, organic revenues reduced by 6%.
The region continues to be predominantly maintenance based with
82% (H1 2015: 88%) of revenues derived from maintenance
activity.
Adjusted operating profit margin decreased to 4.3% (H1 2015:
8.2%) driven by the effects of reduced demand and resultant low
utilisation in the specialist services businesses serving the
offshore North Sea market, reduced volumes of shutdown work in the
coal power generation sector, and a continuation of the poor
commercial performance in delivering maintenance and shutdown work
for ExxonMobil at the Fawley refinery. The business is implementing
a new organisational structure in order to both drive revenue
synergies whilst reducing overhead costs. This restructuring will
be completed in the second half of 2016.
The business was proud to receive a number of safety awards
during the first half of 2016 including the Zero Harm Innovation
award from EDF Energy. This award relates to an innovative training
package currently being delivered across the Cape business that
utilises 360-degree virtual reality technology for safety training
in our continuous journey towards achieving Zero Harm.
Middle East
Market conditions
Market conditions have shown considerable variation across the
region. Demand in KSA continues to be robust, driven by a stable
maintenance requirement and increasing activity on construction
projects predominantly in the downstream/petrochemical segment. In
the UAE, maintenance demand remained robust but pricing pressure
increased as clients adjusted to the lower oil price environment.
The lower levels of project activity seen in 2015 continued in
2016. In Qatar, activity in new oil & gas projects remains low
with investment being directed toward infrastructure development.
Project demand has been low in Oman throughout the first half with
a number of projects having been delayed into the latter part of
the year. The business continues to see a ramp-up in construction
activities in Kuwait, with a number of significant downstream
projects moving forward.
Results
Order intake decreased by 28% to GBP89 million (H1 2015: GBP124
million) largely driven by delays in the timing of a number of
contract awards across the region. The business secured its first
multi-country, multi-disciplinary award with a contract to support
a total of 64 power facilities of GE Power Services across the
Middle East. A further contract award was received during the first
half to provide access services at Saudi Aramco's Jazan Refinery
and Terminal for Nasser S. Al Hajri Corporation adding to the
previous contract awards to provide refractory and fireproofing
works. The business continues to build on its long term client
relationships with a number of important awards including the
insulation contract at the BP Khazzan site in Oman for the
construction of a central processing facility and a four year
contract extension for refractory maintenance for Qatalum in
Qatar.
Revenue decreased by 1% from the prior period to GBP94.2 million
(H1 2015: GBP95.4 million). The business benefited from a 6%
favourable impact of foreign exchange with the underlying decrease
at constant currency of 7% being driven by a reduction of volume in
Qatar partially offset by an increase in activity in KSA, UAE and
Kuwait.
A key element of our strategy is to have a balanced business and
stable revenue streams from maintenance contracts across all
regions. We have continued to sustain a strong maintenance business
in the Middle East with approximately 50% of revenues coming from
maintenance work, compared to 50% at H1 2015 and 40% at H1 2014. We
aim to sustain a strong maintenance revenue base in the region to
provide stability over time.
Adjusted operating profit was GBP13.0 million, a decrease of 17%
from prior year (H1 2015: GBP15.7 million) and includes a 5%
favourable gain from foreign exchange rate movement. At constant
currency, adjusted operating profit decreased by 22%. As expected,
the adjusted operating margin in H1 2016 of 13.8% was reduced
compared to the prior period (H1 2015: 16.5%) which benefited from
a favourable close-out on a number of contracts. Our SOCAR-Cape
joint venture in Azerbaijan continued to perform strongly both
operationally and financially. A strong performance from the KSA
business, largely driven by increased scope on the Jazan refinery
project and continued progress on the expansion of Petro Rabigh's
Refining and Petrochemical Complex, added to by Qatar's successful
completion of a number of shutdowns, offset a poor performance from
the Oman business where delays in project initiation have led to
reduced volumes and low utilisation.
Regional review (continued)
The Group has been recognised with a number of safety awards in
the region from core clients such as SABIC at their Al-Jubail site
in KSA for zero lost time injuries and from ADGAS in the UAE for
achievement of 250,000 man-hours without a lost time incident.
Asia Pacific
Market conditions
Market conditions within the Asia Pacific market remain mixed.
Demand for maintenance activity in Asia was steady although
competition, in particular from local competitors, remained strong.
The offshore market across the region has been negatively affected
by the low oil price driving a significant fall in demand for both
new project and refurbishment work. Bidding activity has been high
for the RAPID project in Malaysia, although competition, in
particular from local suppliers is more severe than expected.
Activity levels in the LNG construction sector have been high with
much of the module work in Asian yards completing early in the
period and an increase in activity in Australia across the three
major LNG plants currently under construction. This strong demand
from the LNG project sector offset continued weakness in the
Australian maintenance market as the iron ore miners in particular
continue to seek ways to reduce capex and operating expense.
Results
Order intake increased by 12% to GBP58 million compared to the
first half of 2015 (H1 2015: GBP52 million), largely driven by the
award of the Shell Bukom contract in Singapore, where the business
is providing access, insulation and painting services to Shell's
Ethylene Cracker Complex, and an increase in scope of work for
Chevron's Wheatstone LNG project in Australia.
Revenue increased by 50% to GBP108.1 million (H1 2015: GBP72.3m)
with 51% growth at constant currency being marginally offset by a
1% impact of foreign exchange rate movement. The strong growth was
driven by a continued ramp-up of work on the Wheatstone LNG project
and mobilisation of two important new contracts secured in late
2015: the Shell Prelude Floating LNG project in South Korea and the
Karratha Gas Plant life extension project for Woodside in
Australia. The Singapore business also achieved a substantial
increase in activity in both project and maintenance work for key
clients such as Shell, ExxonMobil and Mitsui Engineering &
Shipbuilding Co. Volumes across much of the remainder of Asia and
in the maintenance segment in Australia were subdued. The recent
entry into Malaysia has progressed more slowly than anticipated, in
part due to project delays and in part due to stronger than
anticipated competition from local competitors. The business has
secured a small contract on the RAPID project and continues to
tender a number of packages of work for this project.
The business achieved a very substantial increase in adjusted
operating profit, up 108% compared to prior year at GBP5.0m (H1
2015: GBP2.4m) with organic growth at constant currency of 112%
partly offset by a decrease of 4% due to foreign exchange movement.
The growth was driven by an increase in both volume increase and
operating margin as the benefits of the improvement actions taken
in Australia in 2015 more than offset a reduction in margin in a
number of businesses in Asia due to low utilisation on reduced
volumes.
During the period, the Group was recognised by ExxonMobil for
achieving 5 million man-hours without a lost time incident on the
Aurora EOS site in Singapore. In Australia, the Group was awarded
Safety Subcontractor of the Month on the Wheatstone LNG project in
June.
Outlook
As stated in the AGM statement, the Board's expectations for the
full year remain unchanged with a higher than usual weighting of
earnings in the second half of the year as the weaker first half is
offset by increasing levels of activity and the continued benefit
of current favourable foreign exchange rates. The Group is expected
to deliver an improved performance in the second half of the year,
with increasing project activity in Asia Pacific and the Middle
East, and a small improvement in margin in the UK business as the
benefits of the ongoing restructuring start to take effect.
The overall outlook for 2017 for the markets in which the Group
operates is uncertain but our expectation is that the level of
demand will be similar to 2016 with continued weakness in the
upstream market, in particular in the UK and Asia, being offset by
solid project demand for the Group's Middle East and Australian
businesses. Despite the challenging market conditions, the Group
continues to invest in the delivery of its strategy, both in the
continued drive for operational excellence and growth through
expanding its geographic footprint and service offering.
Financial review
Revenue
Revenue from continuing operations increased by 10% to GBP396.3
million (H1 2015: GBP359.5 million). There was a 1% favourable
impact of foreign exchange to revenue with organic growth at
constant currency of 6% largely from projects in the Asia Pacific
region with the Wheatstone and KLE in Australia, Shell Prelude in
South Korea and Shell Bukom in Singapore. The inclusion of a full
six month period for Cape Engineering Services Limited, which was
acquired in May 2015, provided a 3% increase to group revenue.
Revenue from maintenance contracts decreased to GBP237 million
or 60% of total revenue (H1 2015: GBP256 million or 71% of total
revenue). Revenue invoiced to the largest client represented 15% of
total revenue (H1 2015: 12%) relating to activities in the Asia
Pacific region and the top 10 clients represented 52% of revenue
(H1 2015: 44%).
Adjusted operating profit
Adjusted operating profit from continuing operations decreased
by 25% to GBP18.9 million (H1 2015: GBP25.1 million) mainly as a
result of lower demand in the UK business for its specialist
services from the offshore North Sea market, higher costs on the
Fawley shutdown contract and lower margins in the Middle East
compared to the same period in 2015 when the business enjoyed the
benefit of one-off favourable settlements from the completion of a
number of contracts. Favourable translational foreign exchange
movements accounted for a 3% growth in the adjusted operating
profit from continuing operations and there was a 3% benefit from
reporting a full half year of Cape Engineering Services.
Other items
Other items increased to GBP12.1 million (H1 2015: GBP1.9
million) mainly due to the increase in the Industrial Disease
Claims ("IDC") provision of GBP9.7m (see IDC commentary below),
GBP0.6 million of IDC costs (H1 2015: GBP0.2 million) and GBP1.8
million (H1 2015: GBP1.7 million) of post-acquisition charges,
including amortisation of acquired intangible assets relating to
Motherwell Bridge and Cape Engineering Services.
Share of post-tax profit from joint ventures
The post-tax profit of GBP2.8 million (H1 2015: GBP0.1 million)
is attributable to the joint venture in Azerbaijan driven by
increased volumes from construction projects and the BP maintenance
contract.
Operating profit
Operating profit from continuing operations was GBP6.8 million
(H1 2015: GBP22.8 million) comprising an adjusted operating profit
of GBP18.9 million (H1 2015: GBP25.1 million) less exceptional and
other items of GBP12.1 million (H1 2015: GBP2.3 million).
Finance costs
Net finance costs increased to GBP5.4 million (H1 2015: GBP5.2
million) including a GBP1.6 million (H1 2015: GBP1.7 million)
non-cash charge relating to the unwinding of the discount on the
long-term IDC provision, interest income on the IDC scheme funds in
the period of GBP0.2 million (H1 2015: GBP0.2 million) and interest
income on the defined benefit pension assets of GBP0.1 million (H1
2015: GBP0.2 million).
Adjusted finance costs increased to GBP4.1 million (H1 2015:
GBP3.9 million) with interest cover (calculated by dividing
adjusted operating profit by the adjusted finance costs) decreasing
to 4.6 times (H1 2015: 6.4 times).
Profit before tax
Profit before tax from continuing operations was GBP1.4 million
(H1 2015: GBP17.6 million) reflecting an operating profit of GBP6.8
million (H1 2015: GBP22.8 million) less net finance costs of GBP5.4
million (H1 2015: GBP5.2 million).
Taxation
The tax charge on business performance profit before tax was
GBP3.0 million (H1 2015: GBP4.5 million) equating to an effective
tax rate of 20% (H1 2015: 21%).
Earnings per share
For continuing operations adjusted diluted earnings per share
were 8.9p (H1 2015: 13.2p) and adjusted basic earnings per share
were 8.9p (H1 2015: 13.2p). For total operations the basic earnings
per share were 0.2p (H1 2015: 10.3p). The diluted weighted number
of shares increased to 121.4 million (H1 2015: 121.1 million).
Dividend
Taking account of these financial results, current market
conditions and the underlying prospects of the Group, an interim
dividend of 4.5p per share, in line with the 2015 interim dividend
(H1 2015: 4.5p), was approved by the Board on 22 August 2016. The
dividend will be payable on 7 October 2016 to shareholders on the
register as at 9 September 2016.
Financial review (continued)
Adjusted operating and free cash flow(1)
GBPm H1 2015 Unaudited Full year
H1 2016 Restated(2) 2015
Unaudited Audited
------------------------------------------------------- ----------- ----------------------------- ---------
Adjusted operating profit 18.9 25.1 52.5
Depreciation 8.7 7.9 15.9
------------------------------------------------------- ----------- ----------------------------- ---------
Adjusted EBITDA 27.6 33.0 68.4
Non-cash items/disposal (1.8) (3.3) (11.5)
Dividends from joint venture 2.3 - -
(Increase)/Decrease in working capital * (7.2) (21.4) 4.6
Net capital expenditure (7.1) (7.1) (17.6)
------------------------------------------------------- ----------- ----------------------------- ---------
Adjusted operating cash flow 13.8 1.2 43.9
Adjusted operating cash flow to adjusted operating
profit 73.0% 4.8% 83.6%
Net interest paid (3.6) (3.1) (6.9)
Tax paid (2.4) (3.9) (9.3)
------------------------------------------------------- ----------- ----------------------------- ---------
Free cash flow 7.8 (5.8) 27.7
Dividends paid (including non-controlling interests) (13.3) (11.5) (17.0)
Acquisition (including settlement of debt and
working capital) - (6.2) (6.2)
Investment in SOCAR-Cape joint venture 0.4 (5.2) (1.0)
Transfers between restricted funds - 0.3 (5.8)
Cash generated in discontinued operations 0.6 0.5 0.3
Other movements in adjusted net debt 0.7 (2.4) (6.9)
------------------------------------------------------- ----------- ----------------------------- ---------
Movement in adjusted net debt (3.8) (30.3) (8.9)
------------------------------------------------------- ----------- ----------------------------- ---------
Opening adjusted net debt (109.9) (101.0) (101.0)
Closing adjusted net debt (113.7) (131.3) (109.9)
------------------------------------------------------- ----------- ----------------------------- ---------
(* At average rates)
(1 The Interim Condensed Consolidated Cash Flow Statement is
available within the primary statements of this document, and is
supported by note 16 of these interim results.)
(2) Prior year figures have been restated to exclude Hong Kong
operations which were discontinued in 2015.
Working capital
Investment in trade and other receivables and inventories
increased by GBP41.2 million to GBP252.7 million (31 December 2015:
GBP211.5 million) although largely offset by an increase in trade
and other payables of GBP30.8 million to GBP151.6 million (31
December 2015: GBP120.8 million) resulting in an overall increase
in net working capital of GBP10.4 million (at balance sheet rates)
to GBP101.1 million (31 December 2015: GBP90.7m).
Key drivers to the working capital increase are:
-- higher working capital requirement in the UK for the ExxonMobil contract at Fawley
-- increased working capital investment in the Middle East region
The increase in working capital is less than the equivalent
period last year and this drives the improvement in adjusted
operating cash flow to adjusted operating profit to 73.0% (H1 2015:
4.8%).
Capital expenditure
Gross capital expenditure was GBP8.0 million (H1 2015: GBP7.4
million) mainly comprising the purchase of additional scaffold and
other equipment for projects in newer locations. The Asset
Replacement Ratio (calculated by dividing gross capital expenditure
spend by the depreciation charge) decreased to 92% (H1 2015:
94%).
Financing
The Group's adjusted net debt decreased by GBP17.6 million at 3
July 2016 to GBP113.7 million compared to the same period in the
prior year (5 July 2015: GBP131.3 million) including finance lease
obligations of GBP3.0 million (5 July 2015: GBP2.9 million). This
includes GBP1.6 million of banking fees relating to the banking
facility entered into in February 2014 and GBP2.1 million of fees
relating to the amendment of the banking facility in June 2016 (5
July 2015: GBP2.4 million). Balance sheet gearing, excluding
ring-fenced IDC Scheme funds, decreased to 80% (31 December 2015:
85%; 5 July 2015: 103%).
During the first half of the year, the Company agreed to amend
and extend its existing revolving credit facility, increasing the
facility by a further GBP5 million to GBP300 million and retaining
the GBP50 million accordion feature. The facility has a contractual
maturity of 23 June 2020, extending the existing debt facility by
two years, with an option to extend the facility by a further year
by mutual consent.
Financial review (continued)
Provision for pensions
The defined benefit pension scheme had a net surplus of GBP4.8
million as at 3 July 2016 (H1 2015: GBP12.2 million) and continues
to be restricted to GBPnil in the accounts under IFRIC 14.
Provision for estimated future asbestos related liabilities and
IDC Scheme funds
As previously disclosed, Cape and the Scheme are subject to new
legal developments and new types of claim as legal precedent in the
area of industrial disease claims continues to evolve. Aviva has
brought one such new type of claim, seeking to establish
contribution and indemnity claims ("Insurer EL Claims") from Cape
towards employee liability settlements that it has made in response
to policies that Aviva underwrote for a liquidated Cape subsidiary
during the period 1956 to 1966 and for which Aviva has already
benefited from the associated insurance premiums.
Following a sequence of court hearings culminating in a
determinant judgment on 19th July 2016, some elements of the
judgment were found in favour of Cape and some against. Cape is
seeking leave to appeal a number of aspects of this litigation.
Nevertheless the Board believes it to be prudent to increase the
provision held against industrial disease claims by GBP9.7 million
to take account of the current judgment. This provision represents
the Board's best estimate, based on the current information
available to it, of both the liability relating to the Insurer EL
Claims currently being brought by Aviva and the discounted present
value of potential future claims of a similar nature, using the
same actuarial and economic assumptions as disclosed in note 28 to
the Group's 2015 Annual Report and Accounts.
Given the increase in the provision, and subject to the outcome
of any appeal, the Company currently intends to make an additional
payment of approximately GBP9 million by 31st December 2016 into
the ring-fenced Scheme Fund in order to meet the funding
requirements of the Scheme. This will permit the Company to
continue to make dividend payments without recourse to the Scheme
trustees.
The discounted provision increased to GBP104.2 million (31
December 2015: GBP95.5 million) reflecting the unwinding of the
discount of GBP1.6 million in the half year (H1 2015: GBP1.7
million), GBP2.6 million (H1 2015: GBP3.5 million) utilised in the
period and the increase of GBP9.7 million to take account of the
recent judgment.
The ring-fenced IDC Scheme funds reduced by GBP0.7 million (H1
2015: GBP2.4 million reduction) comprising cash settlements and
costs paid to scheme claimants of GBP1.4 million (H1 2015: GBP2.6
million) offset by a top-up receipt of GBP0.5 million (H1 2015:
nil) and income interest of GBP0.2 million (H1 2015: GBP0.2
million) in the period, shown as finance income other items in the
Condensed Consolidated Income Statement.
Other provisions
Other provisions have fallen from GBP8.2 million at 31 December
2015 to GBP7.6 million as at 3 July 2016 as a result of
utilisations of GBP0.7 million, offset by foreign exchange of
GBP0.1 million.
Related parties
As at 3 July 2016, there was a balance of GBP6.9 million (H1
2015: GBP11.5 million; 31 December 2015: GBP7.4 million) owed by
joint ventures.
Currencies
Nearly all operating costs are matched with corresponding
revenues of the same currency and as such there is little
transactional currency risk in the Group. Currency translation had
a 1% favourable impact on revenue for the half year, due to
weakening of Sterling against the US dollar and the Australian
dollar.
The following significant exchange rates against Sterling
applied during the half year:
H1 2016 H1 2015
Closing Average Closing Average
----- -------- -------- -------- --------
AUD 1.80 2.04 2.05 2.00
USD 1.34 1.47 1.56 1.53
----- -------- -------- -------- --------
Re-domiciliation
Further to the passing by shareholders of Resolution 16 at this
year's AGM (as confirmed on the 11 May 2016), Cape completed its
re-domiciliation of the Company's centre of management to the UK
from Singapore with effect from 4 July 2016.
Financial review (continued)
Changes to segmental reporting
The Group has re-organised its geographical reporting segments
during the period as outlined below. The change in reporting
segments has been performed to align external reporting with the
revised internal management structure. All prior year figures have
been restated accordingly.
Old segments New segments
UK, Europe & CIS(1) UK
MENA Middle East(2)
Asia Pacific Asia Pacific(3)
(1) CIS refers to Kazakhstan, Azerbaijan and Sakhalin.
(2) Includes Kazakhstan and Azerbaijan.
(3) Includes Sakhalin.
Principal risks
Cape operates globally in the energy and natural resources
sectors and in varied geographic markets. Cape's performance and
prospects may be affected by risks and uncertainties in relation to
the industry and the environments in which it undertakes its
operations around the world. Those risks range from external
geo-political, security and economic conditions such as
geo-political events, sanctions, terrorist events, disease
outbreaks or environmental hazards; key client and market
dependency risks; operational risks including HSE, contracting,
project execution; and generic financial risks. In 2016 the price
of oil has remained low; the Group has assessed this risk and will
continue to monitor the situation closely and respond with
mitigating actions as appropriate.
There are two specific sources of risk associated with the
Group's historical IDC legacy liabilities. The first relates to the
inherent uncertainty in predicting the future level of asbestos
related industrial disease claims and of the costs arising from
such claims relating to the existing liabilities for which the
Board believes the Group to be liable. There can be no guarantee
that the assumptions used to estimate the provision will result in
an accurate prediction of the actual costs that may be incurred. As
such, the provision may be subject to potentially material
revisions from time to time if new information becomes available as
a result of future events.
The second source of IDC risk relates to any change in legal
precedent or judgment that leads to a material expansion of the
scope of liability for which the Group is held to be liable in the
future. The Group has previously disclosed an increase in the
number of product liability claims received from insurance
companies ("Insurer PL Claims") that have been experienced by the
Group. The Board has received legal advice from leading counsel
that these Insurer PL Claims place very substantial evidential
burdens upon the insurer claimants, are based upon novel legal
arguments and are without precedent. Accordingly, the Board
believes these claims to be without merit and the Group is
vigorously defending them. The risks relating to industrial disease
claims and the associated impact on the Group and its stakeholders
are described in note 35 to the Group's 2015 Annual Report and
Accounts.
Following the decision by the UK to exit the European Union, the
adverse impact on the value of the IDC provision from changes in
economic factors has been mitigated by favourable movements in
other actuarial assumptions. When determining the appropriate level
of provision, the Board has considered various potential,
threatened and actual claim types which, relying on appropriate
legal advice, it does not believe to have legal merit and which
are, accordingly not provided for.
The Board currently considers that there is no material direct
impact on the Group's trading following the decision of the UK to
leave the European Union.
We operate across a number of economies and jurisdictions which
therefore exposes the Group to a range of tax laws that vary
significantly and are rapidly evolving toward global transparency
and harmonisation. Uncertainty may occur when the Group is required
to interpret laws and treaties.
The Group is alert to the challenges of managing risk and has
systems and procedures in place across the Group to identify,
assess and mitigate major business risks. As part of the long term,
strategic Operational Excellence programme the Group continues to
improve its detailed process of project risk identification and
mitigation from contract tender through to project completion.
The Directors have reviewed risk and related controls at the
half year. The Directors consider that the nature of the principal
risks and uncertainties which may have a material effect on the
Group's performance in the second half of the year is unchanged
from those detailed on pages 18 to 25 of the Group's 2015 Annual
Report and Accounts.
Going concern
After making the appropriate enquiries, the Directors have
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. The
Group therefore continues to adopt the going concern basis in
preparing its interim condensed consolidated financial
statements.
Joe Oatley Michael Speakman
Chief Executive Chief Financial Officer
22 August 2016 22 August 2016
Statement of Directors' Responsibilities
The Interim Report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for
preparing the Interim Report in accordance with the Disclosure and
Transparency Rules ("DTR") of the United Kingdom's Financial
Conduct Authority ("FCA").
The DTR require that the accounting policies and presentation
applied to the half yearly figures must be consistent with those
applied in the latest published annual accounts, except where the
accounting policies and presentation are to be changed in the
subsequent annual accounts, in which case the new accounting
policies and presentation should be followed, and the changes and
the reasons for the changes should be disclosed in the Interim
report, unless the United Kingdom's FCA agrees otherwise.
The Directors confirm that to the best of their knowledge the
condensed set of financial statements, which have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting' as adopted by the European Union give a true
and fair view of the assets, liabilities, financial position and
profit and loss of the Group, as required by DTR 4.2.2 and in
particular include a fair review of:
-- the important events that have occurred during the first six
months of the financial year and their impact on the interim
condensed consolidated set of financial statements as required by
DTR 4.2.7R;
-- the principal risks and uncertainties for the remaining half
of the year as required by DTR 4.2.7R; and
-- related party transactions that have taken place in the first
half of the current financial year and changes in the related party
transactions described in the previous annual report that have
materially affected the financial position or performance of the
Group during the first half of the current financial year as
required by DTR 4.2.8R.
The Directors of Cape plc are listed in the Group's 2015 Annual
Report and Accounts. During the current period Samantha Tough has
resigned as a director with effect from 31 August 2016 and Mary
Reilly has been appointed to the Board with effect from 1 September
2016.
For and on behalf of the Board of Directors.
Joe Oatley Michael Speakman
Chief Executive Chief Financial Officer
22 August 2016 22 August 2016
Independent review report to Cape plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half yearly financial report for the
six months ended 3 July 2016 which comprises the Interim Condensed
Consolidated Income Statement, Interim Condensed Consolidated
Statement of Comprehensive Income, Interim Condensed Consolidated
Statement of Financial Position, Interim Condensed Consolidated
Statement of Changes in Equity, Interim Condensed Consolidated Cash
Flow Statement and the related explanatory notes. We have read the
other information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The half yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half yearly financial report for the six months ended 3 July
2016 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Reading, UK
22 August 2016
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE PERIODED 3 JULY 2016
27 weeks ended 3 July 27 weeks ended 5 July
2016 2015(1)
Unaudited Unaudited
Restated
Exceptional Restated Exceptional
Business and other Business and other Restated
performance items Total performance items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
operations 396.3 - 396.3 359.5 - 359.5
Operating profit before
other items 16.1 - 16.1 25.0 - 25.0
Other items 7a - (12.1) (12.1) - (1.9) (1.9)
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
Operating profit/(loss)
before exceptional items 16.1 (12.1) 4.0 25.0 (1.9) 23.1
Share of post-tax result
of joint ventures 2.8 - 2.8 0.1 - 0.1
Exceptional items 7b - - - - (0.4) (0.4)
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
Operating profit/(loss) 18.9 (12.1) 6.8 25.1 (2.3) 22.8
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
Finance income 9 0.1 0.2 0.3 0.2 0.2 0.4
Finance costs 9 (4.1) (1.6) (5.7) (3.9) (1.7) (5.6)
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
Net finance costs (4.0) (1.4) (5.4) (3.7) (1.5) (5.2)
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
Profit/(loss) before
tax 14.9 (13.5) 1.4 21.4 (3.8) 17.6
Income tax (expense)/credit 10 (3.0) 2.8 (0.2) (4.5) 0.4 (4.1)
Profit/(loss) from
continuing
operations 11.9 (10.7) 1.2 16.9 (3.4) 13.5
Profit/(Loss) from
discontinued
operations 8 0.1 - 0.1 (0.2) - (0.2)
Profit/(loss) for the
period 12.0 (10.7) 1.3 16.7 (3.4) 13.3
Attributable to:
Owners of Cape plc 0.2 12.4
Non-controlling interests 1.1 0.9
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
1.3 13.3
----------------------------- ------- ------------- ------------ -------- ------------- ------------- ---------
Earnings per share attributable to the owners of Cape plc
Pence Pence
Pence Pence
------------------- ----- --------------------- ---------------------------------- --------------- ----------
Basic
Continuing
operations 8.9 0.1 13.2 10.5
Discontinued
operations 0.1 0.1 (0.2) (0.2)
------------------- ----- --------------------- ---------------------------------- --------------- ----------
Total operations 11 9.0 0.2 13.0 10.3
------------------- ----- --------------------- ---------------------------------- --------------- ----------
Diluted
Continuing
operations 8.9 0.1 13.2 10.5
Discontinued
operations 0.1 0.1 (0.2) (0.2)
------------------- ----- --------------------- ---------------------------------- --------------- ----------
Total operations 11 9.0 0.2 13.0 10.3
------------------- ----- --------------------- ---------------------------------- --------------- ----------
(1) Restated for the reclassification of Hong Kong to
discontinued operations as detailed in note 2.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE PERIODED 3 JULY 2016
27 weeks ended 27 weeks ended
3 July 2016 5 July 2015
Unaudited Unaudited
GBPm GBPm
--------------------------------------------------------------------------------- --------------- ---------------
Profit for the period 1.3 13.3
Other comprehensive income/(expense):
Other comprehensive income/(expense) to be reclassified to profit or loss in
subsequent periods:
Currency translation gain/(loss) 24.9 (3.1)
Net other comprehensive income/(expense) to be reclassified to profit or loss in
subsequent
periods 24.9 (3.1)
---------------------------------------------------------------------------------- --------------- ---------------
Other comprehensive income/(expense) not to be reclassified to profit or loss in
subsequent
periods:
Re-measurement of defined benefit pension plan (6.1) (0.1)
Movement in restriction of retirement benefit asset in accordance with IFRIC 14 5.7 (0.2)
Restriction of interest income in accordance with IFRIC 14 0.2 -
Tax effect 0.1 -
Net other comprehensive (expense) not to be reclassified to profit or loss in
subsequent periods (0.1) (0.3)
---------------------------------------------------------------------------------- --------------- ---------------
Other comprehensive income/(expense) 24.8 (3.4)
---------------------------------------------------------------------------------- --------------- ---------------
Total comprehensive income 26.1 9.9
---------------------------------------------------------------------------------- --------------- ---------------
Attributable to:
Owners of Cape plc 24.7 9.0
Non-controlling interests 1.4 0.9
---------------------------------------------------------------------------------- --------------- ---------------
26.1 9.9
--------------------------------------------------------------------------------- --------------- ---------------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
FOR THE PERIODED 3 JULY 2016
3 July 5 July
2016 31 December 2015 2015
Unaudited Audited Unaudited
Note GBPm GBPm GBPm
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Assets
Non-current assets
Intangible assets 146.1 138.6 150.6
Investment property 2.0 2.0 2.0
Property, plant and equipment 84.3 80.2 76.3
Investments accounted for using the equity method 3.8 2.8 -
Derivative financial assets - - 0.1
Deferred tax asset 22.3 20.7 23.3
Restricted deposits 9.0 9.0 9.0
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Total non-current assets 267.5 253.3 261.3
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Current assets
Inventories 14.0 12.7 13.3
Trade and other receivables 238.7 198.8 234.3
Cash and cash equivalents 78.8 81.4 57.7
Restricted deposits 22.5 23.3 18.2
Assets directly associated with disposal group held for sale 1.6 1.0 1.3
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Total current assets 355.6 317.2 324.8
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Total assets 623.1 570.5 586.1
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Equity
Share capital 15 30.3 30.3 30.3
Share premium account 1.0 1.0 1.0
Treasury shares 15 (0.1) - -
Special reserve 1.0 1.0 1.0
Other reserves 9.6 9.6 9.5
Translation reserve 124.0 99.4 93.2
Retained losses (26.6) (14.9) (11.8)
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Equity attributable to equity holders of the parent 139.2 126.4 123.2
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Non-controlling interests 2.5 2.9 3.7
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Total equity 141.7 129.3 126.9
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Liabilities
Non-current liabilities
Borrowings 190.3 190.2 186.9
Retirement benefit obligations 15.6 13.3 13.4
Deferred tax liabilities 4.7 5.4 7.4
Provision for industrial disease claims 18 93.0 90.2 91.0
Other provisions 2.8 2.7 2.7
Total non-current liabilities 306.4 301.8 301.4
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Current liabilities
Borrowings 0.1 0.1 0.1
Derivative financial instruments - - 0.1
Trade and other payables 151.6 120.8 128.6
Current income tax liabilities 5.0 6.0 7.7
Provision for industrial disease claims 18 11.2 5.3 5.4
Other provisions 4.8 5.5 14.1
Liabilities directly associated with disposal group held for sale 2.3 1.7 1.8
Total current liabilities 175.0 139.4 157.8
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Total liabilities 481.4 441.2 459.2
------------------------------------------------------------------ ------- ---------- ----------------- ----------
Total equity and liabilities 623.1 570.5 586.1
------------------------------------------------------------------ ------- ---------- ----------------- ----------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE PERIODED 3 JULY 2016
Share Retained Total
Share premium Treasury Special Other Translation earnings/ attributable Non-controlling Total
capital account shares reserve reserves reserve (losses) to parent interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2016
audited 30.3 1.0 - 1.0 9.6 99.4 (14.9) 126.4 2.9 129.3
------------------- ------- ------- --------- ------- -------- ----------- ------------ ---------------- --------------- ------
Comprehensive
income:
Profit for the
period - - - - - - 0.2 0.2 1.1 1.3
Other
comprehensive
income/(expense):
Currency
translation
differences - - - - - 24.6 - 24.6 0.3 24.9
Re-measurement of
defined benefit
pension
plan - - - - - - (6.1) (6.1) - (6.1)
Movement in
restriction
of retirement
benefit
asset in
accordance
with IFRIC 14 - - - - - - 5.7 5.7 - 5.7
Restriction of
interest
income in
accordance
with IFRIC 14 - - - - - - 0.2 0.2 - 0.2
Tax effect on
retirement
benefit asset - - - - - - 0.1 0.1 - 0.1
------------------- ------- ------- --------- ------- -------- ----------- ------------ ---------------- --------------- ------
Total
comprehensive
income for the
period - - - - - 24.6 0.1 24.7 1.4 26.1
Transactions with
owners
Dividends - - - - - - (11.5) (11.5) (1.8) (13.3)
Share options
- value of
employee
services - - - - - - 0.3 0.3 - 0.3
- exercise of
share
options - - (0.1) - - - (0.6) (0.7) - (0.7)
- - (0.1) - - - (11.8) (11.9) (1.8) (13.7)
------------------- ------- ------- --------- ------- -------- ----------- ------------ ---------------- --------------- ------
At 3 July 2016
unaudited 30.3 1.0 (0.1) 1.0 9.6 124.0 (26.6) 139.2 2.5 141.7
------------------- ------- ------- --------- ------- -------- ----------- ------------ ---------------- --------------- ------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE PERIODED 5 JULY 2015
Share Retained Total
Share premium Treasury Special Other Translation earnings/ attributable Non-controlling Total
capital account shares reserve reserves reserve (losses) to parent interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2015
audited 30.3 1.0 - 1.0 9.5 96.3 (13.4) 124.7 2.8 127.5
------------------- ------- ------- --------- ------- -------- ----------- ----------- ---------------- --------------- --------
Comprehensive
income:
Profit for the
period - - - - - - 12.4 12.4 0.9 13.3
Other
comprehensive
income/(expense):
Currency
translation
differences - - - - - (3.1) - (3.1) - (3.1)
Re-measurement of
defined benefit
pension
plan - - - - - - (0.1) (0.1) - (0.1)
Movement in
restriction
of retirement
benefit
asset in
accordance
with IFRIC 14 - - - - - - (0.2) (0.2) - (0.2)
------------------- ------- ------- --------- ------- -------- ----------- ----------- ---------------- --------------- --------
Total
comprehensive
income/(expense)
for
the period - - - - - (3.1) 12.1 9.0 0.9 9.9
Transactions with
owners
Dividends - - - - - - (11.5) (11.5) - (11.5)
Share options
- value of
employee
services - - - - - - 1.0 1.0 - 1.0
- - - - - - (10.5) (10.5) - (10.5)
------------------- ------- ------- --------- ------- -------- ----------- ----------- ---------------- --------------- --------
At 5 July 2015
unaudited 30.3 1.0 - 1.0 9.5 93.2 (11.8) 123.2 3.7 126.9
------------------- ------- ------- --------- ------- -------- ----------- ----------- ---------------- --------------- --------
INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIODED 3 JULY 2016
27 weeks
27 weeks ended Year ended
ended 5 July 2015(1) 31 December
3 July 2016 Restated 2015
Unaudited Unaudited Audited
Note GBPm GBPm GBPm
Operating activities
Cash generated from operating activities
- continuing operations 16 16.1 5.3 51.6
Interest received 0.1 0.4 0.1
Interest paid (3.7) (3.5) (7.0)
Tax paid (2.4) (3.9) (9.3)
------------------------------------------- ----- -------------- ---------------- --------------
Net cash flows from/(used in) operating
activities - continuing operations 10.1 (1.7) 35.4
------------------------------------------- ----- -------------- ---------------- --------------
Net cash flows from operating activities
- discontinued operations 16 - 0.5 0.3
------------------------------------------- ----- -------------- ---------------- --------------
Net cash flows from/(used in) operating
activities 10.1 (1.2) 35.7
------------------------------------------- ----- -------------- ---------------- --------------
Investing activities
Continuing operations
Proceeds from sale of property, plant
and equipment 13 0.9 0.3 2.9
Purchase of property, plant and equipment 13 (8.0) (7.4) (20.1)
Net transfer of restricted funds - 0.3 (5.8)
Loans from/(to) joint ventures 0.4 (5.2) (1.0)
Dividends received from joint ventures 2.3 - -
Acquisition of subsidiaries net of
cash acquired - (0.2) (0.2)
Net cash (used in) investing activities
- continuing operations (4.4) (12.2) (24.2)
------------------------------------------- ----- -------------- ---------------- --------------
Financing activities
Continuing operations
Drawing on borrowings (1.1) 10.3 13.2
Settlement of debt arising on acquisition - (5.3) (5.3)
Share buyback 15 (0.8) - -
Dividends paid to shareholders 12 (11.5) (11.5) (17.0)
Dividends paid to non-controlling (1.8) - -
interests
Net cash flows (used in) financing
activities - continuing operations (15.2) (6.5) (9.1)
Net foreign exchange difference 6.9 (0.4) 1.0
------------------------------------------- ----- -------------- ---------------- --------------
Net (decrease)/increase in cash and
cash equivalents (2.6) (20.3) 3.4
Cash and cash equivalents at beginning
of period 81.4 78.0 78.0
------------------------------------------- ----- -------------- ---------------- --------------
Cash and cash equivalents at end of
period 78.8 57.7 81.4
------------------------------------------- ----- -------------- ---------------- --------------
(1) Restated for the reclassification of Hong Kong to
discontinued operations as detailed in note 2.
Notes to the Financial Statements
1. Corporate information
The interim condensed consolidated financial statements of Cape
plc and its subsidiaries, collectively "the Group" for the period
ended 3 July 2016 were authorised for issue in accordance with a
resolution of the Directors on 22 August 2016.
Cape plc, "the Company" or "the Parent", is a limited company
incorporated in Jersey and resident in the United Kingdom and
Jersey whose shares are publicly traded on the London Stock
Exchange. The registered office is located at 47 Esplanade, St
Helier, Jersey JE1 0BD. The Group is principally engaged in the
provision of critical industrial services focused on the energy and
natural resource sectors.
2. Basis of preparation
The interim condensed consolidated financial statements for the
period ended 3 July 2016 have been prepared in accordance with IAS
34, 'Interim Financial Reporting', as adopted by the European Union
and the Disclosure and Transparency Rules of the Financial Conduct
Authority. The interim condensed consolidated financial statements
do not include all the information and disclosures required in the
Group's annual audited consolidated financial statements, and
should be read in conjunction with the Group's annual audited
consolidated financial statements for the year ended 31 December
2015 which are prepared in accordance with IFRS, as adopted by the
European Union.
The accounting policies and methods of computation adopted in
preparation of the Group's interim condensed consolidated financial
statements are the same as those followed in the preparation of the
Group's annual consolidated financial statements for the year ended
31 December 2015, except for the adoption of new standards and
interpretations effective as of 1 January 2016.
Adoption of new standards and interpretations
Several new standards and amendments apply for the first time in
2016, however they do not have a significant impact on the annual
financial statements of the Group or the interim condensed
consolidated financial statements of the Group. These new standards
and amendments are listed below:
- Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests
- Amendments to IAS 16 and IAS 38: Clarification of Acceptable
Methods of Depreciation and Amortisation
- Amendments to IAS 27: Equity Method in Separate Financial Statements
- Amendments to IAS 1 Disclosure Initiative
- Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities:
Applying the Consolidation Exception
- Annual Improvements Cycle 2012-2014
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
Restatement of prior year comparatives
As a result of the discontinuation of operations in Hong Kong
during 2015, the prior period figures for the period ended 5 July
2015 in the interim condensed consolidated income statement and the
interim condensed consolidated cash flow statement have been
restated, together with any associated notes.
The Group has re-organised its geographical reporting segments
during the period as outlined in note 5. The change in reporting
segments has been performed to align external reporting with the
revised internal management structure. All prior period figures
have been restated accordingly in note 5 'Segment Information'.
Estimates
The preparation of the interim condensed consolidated financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these interim condensed consolidated financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were in line with those that applied to the
Group's annual audited consolidated financial statements for the
year ended 31 December 2015.
Foreign exchange
The Group is exposed to foreign currency risk in two key
currencies. The movements in exchange rates for these two
currencies against Sterling are detailed below:
27 weeks 27 weeks Year ended
ended ended 31 December
3 July 2016 5 July 2015 2015
Closing Average Closing Average Closing Average
----- --------- -------- -------- -------- --------- --------
AUD 1.80 2.04 2.05 2.00 2.03 2.09
USD 1.34 1.47 1.56 1.53 1.48 1.51
----- --------- -------- -------- -------- --------- --------
3. Cape specific accounting measures
To be able to provide readers with clear, meaningful and
consistent presentation of financial performance, the Group
reflects its underlying financial results in the 'business
performance' column within the interim condensed consolidated
income statement. Business performance excludes 'Other items' and
'Exceptional items', which are considered non-operational in their
nature and which are reported separately in a different column
within the interim condensed consolidated income statement.
Other items
Other items are those items which the Directors believe are
relevant to the understanding of the result for period and which
are excluded from the adjusted measures. Other items include
administration expenses, financial incomes and financial costs
associated with industrial disease claims and certain
post-acquisition charges, including amortisation of acquired
intangibles arising from business combinations.
Exceptional items
Exceptional items are those items which are of a non-recurring
nature and, in the judgement of the Directors, need to be disclosed
separately by virtue of their nature, size or incidence. Items
which may be considered exceptional in nature include significant
write-downs of goodwill and other assets, significant changes in
asset values as a result of changes in accounting estimates and
restructuring costs.
4. Critical accounting estimates and judgements
Certain of the Group's accounting policies require critical
accounting estimates that involve subjective judgements and the use
of assumptions, some of which may relate to matters that are
inherently uncertain and susceptible to change.
Judgements
Areas of judgement that have the most significant effect on the
amounts recognised in the interim condensed consolidated financial
statements are:
(i) Revenue recognition and assessment of long term contract
performance
The Group generally accounts for long term construction
contracts using the percentage of completion method as performance
of the contract progresses. This method requires judgement to
determine accurate estimates of the extent of progress towards
contract completion and may involve estimates of the total contract
costs, remaining costs to completion, total revenues, contract
risks and other judgements.
(ii) Carrying value of property, plant and equipment
Assessing whether property, plant and equipment may be impaired
requires a review for indicators of impairment and, where such
indicators exist, an estimate of the asset's recoverable amount by
reference to value in use. Management are required to exercise
significant judgement in reviewing for and identifying asset
indicators of impairment and subsequently calculating value in
use.
(iii) Trade and other receivables
The Group provides for likely non-recovery of receivables to the
extent that the carrying value is less than the present value of
expected future cash flows. Assessing the value of the provision
requires significant management judgement and review of individual
receivables based upon individual customer creditworthiness,
current economic trends and analysis of historical bad debts.
(iv) Tax
The Group recognises deferred tax assets on all applicable
temporary differences where it is probable that future taxable
profits will be available for utilisation. This requires management
to make judgements and assumptions regarding the amount of deferred
tax that can be recognised based on the magnitude and likelihood of
future taxable profits.
The Group has a number of uncertain tax positions that are yet
to be resolved. Provisions have been made where it is probable an
economic outflow will be required to settle an obligation and where
the amount can be reliably estimated. The Board believes no further
provision or disclosure is required in respect of these uncertain
positions.
(v) Defined benefit pension plans
The cost and the obligation of the Group's defined benefit
pension plans are based on a number of selection assumptions; these
include the discount rate, inflation rate, salary growth, longevity
and expected return on the assets of the plans. Differences arising
from actual experience or future changes in assumptions will be
reflected in future periods.
Estimates
The key assumptions affected by future uncertainty that have a
significant risk of causing material adjustment to the carrying
value of assets and liabilities within the next financial year
are:
(i) Onerous contracts
Provision is made for future losses on long term contracts where
it is considered that the contract costs are likely to exceed
revenues in future years. Estimating future losses involves
assumptions of contract performance targets and likely levels of
future cost escalation over time.
4. Critical accounting estimates and judgements (continued)
(ii) Impairment of goodwill
Goodwill is tested at least annually for impairment. This
requires estimation of the value in use of the cash-generating
units to which the goodwill is allocated. Calculation of value in
use requires estimation of expected future cash flows from each of
the cash-generating units and also to determine a suitable discount
rate to calculate the present value of those cash flows. Management
have reviewed the assumptions made as part of the goodwill
impairment review carried out for the year ended 31 December 2015
and have not identified an impairment of goodwill in any of the
cash generating units.
(iii) Provision for industrial disease claims
To the extent that such costs can be reliably estimated as at 3
July 2016, a provision has been made for the costs which the Group
is expected to incur in respect of lodged and future industrial
disease claims for which the Board believes the Group to be liable
arising on alleged exposure to previously manufactured asbestos
products, notwithstanding the matters disclosed under note 18
'Industrial disease claim provision and contingent liabilities'.
The most recent full actuarial valuation was performed in 2013 and
the next full valuation is scheduled to be completed in early 2017
in respect of the period up to 31 December 2016. The amount of the
provision is based on historic patterns of claim numbers and
monetary settlements as well as published tables of projected
disease incidence. Key assumptions made in assessing the
appropriate level of provision include the period over which future
claims can be expected, the nature of claims received, the rate at
which claims will be filed, the rate of successful resolution as
well as future trends in both compensation payments and legal
costs. Management monitors claims received on an ongoing basis as
well as any other factors which would require a change to the
assumptions or trigger a full actuarial review in the current year.
During the period, the value of the provision was increased by
GBP8.7 million, largely reflecting the adverse legal judgement in
Insurer EL claims, as reported in note 18.
(iv) Income tax
Group entities can be subject to routine tax audits and also a
process whereby tax computations are discussed and agreed with the
appropriate authorities. Whilst the ultimate outcome of such tax
audits and discussions cannot be determined with certainty,
management estimates the level of required tax provisions on the
basis of professional advice and the nature of current discussions
with the tax authority concerned.
5. Segment information
The Group has re-organised its geographical reporting segments
during the period. The change in reporting segments has been
performed to align external reporting with the revised internal
management structure. Sakhalin is now reported within 'Asia
Pacific' and both Azerbaijan and Kazakhstan are now reported within
'Middle East', with these having all previously been reported
within 'UK, Europe & CIS'. Additionally, the 'UK, Europe &
CIS' segment has been renamed 'UK' and 'MENA' has been renamed
'Middle East'. All prior period figures have been restated
accordingly. The following tables represent revenue and profit
information for the Group's operating segments for the period ended
3 July 2016 and 5 July 2015 respectively:
27 weeks ended 3 July 2016
Asia
UK Middle Pacific Central Group
GBPm East GBPm GBPm GBPm
GBPm
Continuing operations
Revenue 194.0 94.2 108.1 - 396.3
Adjusted operating profit/(loss)
before joint ventures 8.4 8.3 1.9 (2.5) 16.1
Share of post-tax profit from
joint ventures - 2.8 - - 2.8
---------------------------------- ------ -------- -------- --------- -------
Adjusted operating profit/(loss) 8.4 11.1 1.9 (2.5) 18.9
---------------------------------- ------ -------- -------- --------- -------
Other items (12.1)
Exceptional items -
Net finance costs (5.4)
---------------------------------- ------ -------- -------- --------- -------
Profit before tax 1.4
---------------------------------- ------ -------- -------- --------- -------
27 weeks ended 5 July 2015
Restated
Asia
UK Middle Pacific Central Group
GBPm East GBPm GBPm GBPm
GBPm
Continuing operations
Revenue 191.8 95.4 72.3 - 359.5
Adjusted operating profit/(loss)
before joint ventures 15.7 13.9 0.2 (4.8) 25.0
Share of post-tax profit from
joint ventures - 0.1 - - 0.1
---------------------------------- ----------------- -------- ----------------- --------- -------
Adjusted operating profit/(loss) 15.7 14.0 0.2 (4.8) 25.1
---------------------------------- ----------------- -------- ----------------- --------- -------
Other items (1.9)
Exceptional items (0.4)
Net finance costs (5.2)
---------------------------------- ----------------- -------- ----------------- --------- -------
Profit before tax 17.6
---------------------------------- ----------------- -------- ----------------- --------- -------
5. Segment information (continued)
Segmental adjusted operating profit/(loss) in the table above is
shown after charging franchise fees. Adjusted operating
profit/(loss) before franchise fees is set out in note 6.
Other segment items included in the interim condensed
consolidated income statement for the period ended 3 July 2016
were:
Asia
UK Middle East Pacific Central Group
GBPm GBPm GBPm GBPm GBPm
-------------- ------- -------------- ---------- ---------- --------
Depreciation 2.6 4.1 2.0 - 8.7
Amortisation 1.7 - - - 1.7
--------------- ------- -------------- ---------- ---------- --------
Other segment items included in the interim condensed
consolidated income statement for the period ended 5 July 2015
were:
Asia
UK Middle East Pacific Central Group
Restated GBPm GBPm GBPm GBPm GBPm
-------------------------------------------------- ------- -------------- ---------- ---------- --------
Depreciation (excluding discontinued operations) 2.5 3.4 2.0 - 7.9
Amortisation 1.6 - - - 1.6
--------------------------------------------------- ------- -------------- ---------- ---------- --------
The following table presents assets and liabilities from the
Group's operating segments as at 3 July 2016 and 31 December 2015,
respectively:
Middle Asia
UK East Pacific Central Unallocated Group
3 July 2016 GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------------------- ---- ------------- --------- --------- --------- ------------------ -------------------------------
Assets - continuing 168.4 192.6 104.4 23.4 132.7 621.5
Assets directly associated with disposal group held for sale - 0.1 1.5 - - 1.6
Total assets 168.4 192.7 105.9 23.4 132.7 623.1
Liabilities - continuing (65.2) (59.7) (43.8) (113.1) (197.2) (479.0)
Liabilities - discontinued - (0.1) - - - (0.1)
Liabilities directly associated with disposal group held for sale - (0.3) (2.0) - - (2.3)
--------------------------------------------------------------------- ------------- --------- --------- --------- ------------------ -------------------------------
Total liabilities (65.2) (60.1) (45.8) (113.1) (197.2) (481.4)
--------------------------------------------------------------------- ------------- --------- --------- --------- ------------------ -------------------------------
Middle Asia
UK East Pacific Central Unallocated Group
31 December 2015 Restated GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------------------- ---- ------------- --------- --------- --------- ------------------ -------------------------------
Assets - continuing 170.8 163.8 76.9 23.6 134.4 569.5
Assets directly associated with disposal group held for sale - 0.2 0.8 - - 1.0
--------------------------------------------------------------------- ------------- --------- --------- --------- ------------------ -------------------------------
Total assets 170.8 164.0 77.7 23.6 134.4 570.5
--------------------------------------------------------------------- ------------- --------- --------- --------- ------------------ -------------------------------
Liabilities - continuing (58.5) (55.7) (24.1) (102.4) (198.7) (439.4)
Liabilities - discontinued - (0.1) - - - (0.1)
Liabilities directly associated with disposal group held for sale - (0.5) (1.2) - - (1.7)
--------------------------------------------------------------------- ------------- --------- --------- --------- ------------------ -------------------------------
Total liabilities (58.5) (56.3) (25.3) (102.4) (198.7) (441.2)
--------------------------------------------------------------------- ------------- --------- --------- --------- ------------------ -------------------------------
6. Adjusted measures
The Group seeks to present a measure of underlying performance
which is not impacted by other items or exceptional items, both
considered non-operational in nature. These measures are described
as 'adjusted' and are used by management to measure and monitor
performance. Other items and exceptional items have been excluded
from the adjusted measures.
27 weeks 27 weeks ended
ended 5 July 2015 Restated
3 July 2016 GBPm
Continuing operations: GBPm
Profit before tax 1.4 17.6
Other items 12.1 1.9
Exceptional items - 0.4
Interest income on restricted deposits (0.2) (0.2)
Unwind of discount on provision for industrial disease
claims 1.6 1.7
Adjusted profit before tax 14.9 21.4
------------------------------------------------------------ ----------------------- -------------------------
Operating profit 6.8 22.8
Other items 12.1 1.9
Exceptional items - 0.4
Adjusted operating profit 18.9 25.1
------------------------------------------------------------ ----------------------- -------------------------
Adjusted operating profit margin % 4.8% 7.0%
------------------------------------------------------------ ----------------------- -------------------------
Adjusted operating profit 18.9 25.1
Depreciation - continuing operations 8.7 7.9
------------------------------------------------------------ ----------------------- -------------------------
Adjusted EBITDA 27.6 33.0
------------------------------------------------------------ ----------------------- -------------------------
Finance costs (5.7) (5.6)
Unwind of discount on provision for industrial
disease claims 1.6 1.7
Adjusted finance costs (4.1) (3.9)
------------------------------------------------ ---- ---- ----------------------- -------------------------
3 July
2016 31 December 2015
GBPm GBPm
----------------------------------------------- ---------- ----------------------- -------------------------
Net debt(1) 80.1 76.6
Unamortised borrowing arrangement costs 3.7 2.0
Restricted deposits 31.5 32.3
Less: cash transferred to assets of disposal
group held for sale (1.6) (1.0)
Adjusted net debt 113.7 109.9
------------------------------------------------------------ ----------------------- -------------------------
(1) Net debt is calculated as borrowings less restricted
deposits and cash and cash equivalents.
Certain central operations and management are based in Singapore
with responsibility for management and development of non-UK
intellectual property. Franchise agreements facilitate the charging
of franchise fees from Singapore to the Group's non-UK trading
businesses with such costs being reported through segment operating
profit.
6. Adjusted measures (continued)
The segment adjusted operating profit/(loss) before franchise
fees both before and after inclusion of the share of profit from
joint ventures is as follows:
27 weeks ended 3 July 2016
Asia
UK Middle Pacific Central Group
GBPm East GBPm GBPm GBPm
GBPm
Continuing operations
Adjusted operating profit/(loss)
before joint ventures 8.4 10.2 5.0 (7.5) 16.1
Share of post-tax profit from
joint ventures - 2.8 - - 2.8
---------------------------------- ------ -------- -------- --------- -------
Adjusted operating profit/(loss) 8.4 13.0 5.0 (7.5) 18.9
---------------------------------- ------ -------- -------- --------- -------
27 weeks ended 5 July 2015 Restated
Asia
UK Middle Pacific Central Group
GBPm East GBPm GBPm GBPm
GBPm
Continuing operations
Adjusted operating profit/(loss)
before joint ventures 15.8 15.6 2.4 (8.8) 25.0
Share of post-tax profit from
joint ventures - 0.1 - - 0.1
---------------------------------- ------ -------- -------- --------- -------
Adjusted operating profit/(loss) 15.8 15.7 2.4 (8.8) 25.1
---------------------------------- ------ -------- -------- --------- -------
7. Other items and exceptional items
a) Other items
27 weeks ended 27 weeks ended
3 July 2016 5 July 2015
GBPm GBPm
Continuing operations
------------------------------------------------------------------------ --------------------------- ---------------
In operating profit:
Amortisation of intangibles arising on business acquisitions 1.6 1.6
Post-acquisition management compensation 0.2 0.1
Industrial disease claims - other expenses 0.6 0.2
Industrial disease claims - charge to provision 9.7 -
------------------------------------------------------------------------ --------------------------- ---------------
Other items from continuing operations included within operating profit 12.1 1.9
======================================================================== =========================== ===============
b) Exceptional items
27 weeks ended 27 weeks ended
3 July 2016 5 July 2015
GBPm GBPm
Continuing operations
----------------------------------------------------------------------- ---------------------------- ---------------
Acquisition related costs - 0.4
Exceptional items from continuing operations included within operating
profit - 0.4
======================================================================= ============================ ===============
8. Discontinued operations
Analysis of the result of discontinued operations is as follows: 27 weeks ended 27 weeks ended
Discontinued operations 3 July 2016 5 July 2015
GBPm Restated
GBPm
-------------------------------------------------------------------------------- ---------------- ---------------
Revenue 2.9 3.1
Expenses (2.8) (3.3)
--------------------------------------------------------------------------------- ---------------- ---------------
Profit/(Loss) before and after tax of discontinued operations before exceptional
and other
items 0.1 (0.2)
--------------------------------------------------------------------------------- ---------------- ---------------
Following the discontinuation of operations in Hong Kong in
2015, discontinued operations for the comparative period have been
restated.
9. Finance income and costs
27 weeks ended 27 weeks ended
3 July 2016 5 July 2015
GBPm GBPm
------------------------------------------------------------------ -------------------- ---------------
Interest income:
- Interest on pension assets 0.1 0.2
- Interest on restricted deposits 0.2 0.2
------------------------------------------------------------------- ------------------- ---------------
Finance income 0.3 0.4
------------------------------------------------------------------- ------------------- ---------------
Interest expense:
- Bank borrowings (4.0) (3.8)
- Finance leases (0.1) (0.1)
- Unwind of discount on provision for industrial claims disease (1.6) (1.7)
Finance costs (5.7) (5.6)
------------------------------------------------------------------- ------------------- ---------------
Net finance costs (5.4) (5.2)
------------------------------------------------------------------- ------------------- ---------------
10. Income tax
The Group's effective tax rate on its business performance of
20% (H1 2015: 21%) is calculated using the tax rate that would be
applicable to the expected total annual earnings. The income tax
expense for the period decreased by GBP3.9m to GBP0.2m (H1 2015:
GBP4.1m) due to a decrease in profits and a change in the
geographic mix of profits.
Factors affecting current and future tax charges
Profits arising in the Company for the 2016 year of assessment
will be subject to Jersey tax at the standard corporate income tax
rate of 0%.
As a Group involved in worldwide operations, Cape is subject to
several factors that may affect future tax charges, principally the
levels and mix of profitability in different jurisdictions, tax
rates imposed and tax regime reforms. Legislation has been enacted
in the UK to reduce the standard rate of corporation tax to 19%
from 1 April 2017 and to 18% from 1 April 2020.
11. Earnings per ordinary share
The basic earnings per share calculation for the half year ended
3 July 2016 is based on the profit attributable to equity
shareholders of GBP0.2 million (H1 2015: GBP12.4 million) divided
by the weighted average number of 25p ordinary shares of
121,019,813 (H1 2015: 121,072,777).
The diluted earnings per share calculation for the half year
ended 3 July 2016 is based on the profit attributable to equity
shareholders of GBP0.2 million (H1 2015: GBP12.4 million) divided
by the diluted weighted average number of 25p ordinary shares of
121,429,319 (H1 2015: diluted weighted average of 121,072,777).
Share options and awards are considered dilutive when the average
share price during the period is higher than the average exercise
price of the option or award and attainment of attaching
performance criteria can be determined with appropriate
certainty.
27 weeks ended 27 weeks ended
3 July 2016 5 July 2015
Unaudited Unaudited
Number of shares Number of shares
Basic weighted average number of shares 121,019,813 121,072,777
Adjustments:
Weighted average number of outstanding share options 409,506 -
------------------------------------------------------- ------------------------ ------------------------
Diluted weighted average number of shares 121,429,319 121,072,777
-------------------------------------------------------- ------------------------ ------------------------
11. Earnings per ordinary share (continued)
27 weeks ended
27 weeks ended 5 July 2015
3 July 2016 Restated
Earnings EPS Earnings EPS
GBPm pence GBPm pence
------ --------------- -------- ---------------------- ----------------------
Basic earnings per share
Continuing operations 0.1 0.1 12.6 10.5
Discontinued
operations 0.1 0.1 (0.2) (0.2)
Basic earnings per share 0.2 0.2 12.4 10.3
-------------------------------- ------ --------------- -------- ---------------------- ----------------------
Diluted earnings per share
Continuing operations 0.1 0.1 12.6 10.5
Discontinued
operations 0.1 0.1 (0.2) (0.2)
Diluted earnings per share 0.2 0.2 12.4 10.3
------------------------------------ ----- --------------- -------- ---------------------- ----------------------
Adjusted basic earnings per share - continuing
operations
Earnings from continuing operations 0.1 0.1 12.6 10.5
Amortisation of intangibles arising
on business acquisitions (note
7a) 1.6 1.3 1.6 1.3
Post-acquisition management
compensation
(note 7a) 0.2 0.2 0.1 -
Industrial disease claims - other
expenses and charge to provision
(note 7a) 10.3 8.5 0.2 0.2
Industrial disease claims - finance
income and costs (note 9) 1.4 1.1 1.5 1.2
Exceptional items (note 7b) - - 0.4 0.3
Tax effect of adjusting items (2.8) (2.3) (0.4) (0.3)
Adjusted basic earnings per share 10.8 8.9 16.0 13.2
------------------------------------ ----- --------------- -------- ---------------------- ----------------------
Adjusted diluted earnings per share - continuing
operations
Earnings from continuing operations 0.1 0.1 12.6 10.5
Amortisation of intangibles arising
on business acquisitions (note
7a) 1.6 1.3 1.6 1.3
Post-acquisition management
compensation
(note 7a) 0.2 0.2 0.1 -
Industrial disease claims - other
expenses and charge to provision
(note 7a) 10.3 8.5 0.2 0.2
Industrial disease claims - finance
income and costs (note 9) 1.4 1.1 1.5 1.2
Exceptional items (note 7b) - - 0.4 0.3
Tax effect of adjusting items (2.8) (2.3) (0.4) (0.3)
------------------------------------ ----- ---------------------- ----------------------
Adjusted diluted earnings
per share 10.8 8.9 16.0 13.2
-------------------------------- ------ --------------- -------- ---------------------- ----------------------
The adjusted earnings per share calculations have been
calculated after excluding the impact of other items and
exceptional items (note 7), finance income and costs associated
with industrial disease claims (note 9) and the tax impact of these
items. Options are dilutive at the level of adjusted profit from
continuing operations level. If options are dilutive, then in
accordance with IAS 33, these are treated as dilutive for the
purpose of adjusted diluted earnings per share.
12. Dividend
A final dividend in respect of the year ended 31 December 2015
of 9.5 pence per share, amounting to GBP11.5 million, was paid in
the period ended 3 July 2016.
An interim dividend of 4.5 pence (H1 2015: 4.5 pence) per share,
in line with the 2015 interim dividend, was approved by the Board
on 22 August 2016. The dividend will be payable on 7 October 2016
to shareholders on the register as at 9 September 2016.
13. Property, plant and equipment
During the period ended 3 July 2016, the Group acquired assets
with a cost of GBP8.0 million (H1 2015: GBP7.4 million) and
received proceeds from asset sales of GBP0.9 million (H1 2015:
GBP0.3 million) arising from assets with a carrying amount of
GBP1.0 million (H1 2015: GBP0.2 million). Net capital expenditure
of GBP7.1 million (H1 2015: GBP7.1 million) shown in the cash flow
statement represents the actual cash outflow and therefore excludes
purchases funded through finance leases.
Capital expenditure contracted for at the balance sheet date but
not yet incurred:
27 weeks ended 27 weeks ended Year ended
3 July 2016 5 July 2015 31 December 2015
GBPm GBPm GBPm
Property, plant and equipment 0.4 2.7 2.2
------------------------------ --------------- --------------- ------------------
14. Financial instruments
Details of financial instruments, other than cash and short term
deposits, held by the Group as at 3 July 2016 are set out
below.
Other financial
Loans and Fair value through income liabilities at
receivables statement amortised cost Total
3 July 2016 GBPm GBPm GBPm GBPm
------------------------------------ ------------- ----------------------------------- ---------------- --------
Assets per the consolidated statement of financial
position
Trade and other receivables
(excluding prepayments) 229.3 - - 229.3
Derivative financial instruments - - - -
229.3 - - 229.3
------------------------------------ ------------- ----------------------------------- ---------------- --------
Liabilities per the consolidated statement of
financial position
Borrowings (excluding finance lease
liabilities) - - (187.4) (187.4)
Finance lease liabilities - - (3.0) (3.0)
Derivative financial instruments - - - -
Trade and other payables (excluding
statutory liabilities) - - (129.2) (129.2)
------------------------------------ ------------- ----------------------------------- ---------------- --------
- - (319.6) (319.6)
------------------------------------ ------------- ----------------------------------- ---------------- --------
Details of financial instruments, other than cash and short term
deposits, held by the Group as at 31 December 2015 are set out
below.
Other financial
Fair value through income liabilities at
Loans and receivables statement amortised cost Total
31 December 2015 GBPm GBPm GBPm GBPm
----------------------------- ---------------------- ----------------------------- ---------------- --------
Assets per the consolidated statement of financial
position
Trade and other receivables
(excluding prepayments) 192.0 - - 192.0
192.0 - - 192.0
----------------------------- ---------------------- ----------------------------- ---------------- --------
Liabilities per the consolidated statement of
financial position
Borrowings (excluding
finance lease liabilities) - - (187.3) (187.3)
Finance lease liabilities - - (3.0) (3.0)
Trade and other payables
(excluding statutory
liabilities) - - (100.4) (100.4)
----------------------------- ---------------------- ----------------------------- ---------------- --------
- - (290.7) (290.7)
----------------------------- ---------------------- ----------------------------- ---------------- --------
The fair values of short term deposits, loans and other
borrowings with a maturity of less than one year are assumed to
approximate to their book values. In the case of the bank loans and
other borrowings due in more than one year, the fair value of
financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market
interest rate available to the Group for similar financial
instruments.
14. Financial instruments (continued)
The following table provides the fair value measurement
hierarchy of the Group's assets and liabilities.
Recurring fair value measurements:
Quoted prices in active Significant other Significant unobservable
markets observable inputs inputs
(Level 1) (Level 2) (Level 3)
3 July 2016 GBPm GBPm GBPm
---------------------------- ----------------------------- --------------------------- ----------------------------
Assets and liabilities
measured at fair value:
Net (liabilities) held for
sale - - (0.7)
- - (0.7)
---------------------------------------------------------- --------------------------- ----------------------------
Assets and liabilities for
which fair values are
disclosed:
Investment property - - 3.4
Bank loans - (182.8) -
---------------------------- ----------------------------- --------------------------- ----------------------------
- (182.8) 3.4
---------------------------------------------------------- --------------------------- ----------------------------
Quoted prices in active Significant other Significant unobservable
markets observable inputs inputs
(Level 1) (Level 2) (Level 3)
31 December 2015 GBPm GBPm GBPm
---------------------------- ----------------------------- --------------------------- ----------------------------
Assets and liabilities
measured at fair value:
Net (liabilities) held for
sale - - (0.7)
- - (0.7)
---------------------------------------------------------- --------------------------- ----------------------------
Assets and liabilities for
which fair values are
disclosed:
Investment property - - 3.4
Bank loans - (184.2) -
---------------------------- ----------------------------- --------------------------- ----------------------------
- (184.2) 3.4
---------------------------------------------------------- --------------------------- ----------------------------
The fair value of the investment property is based upon a
valuation as at 31 December 2015 performed by an accredited
independent valuer, who is a specialist in valuing investment
properties. Fair values of the Group's interest-bearing borrowings
and loans are determined by using a DCF method with a discount rate
that reflects the issuer's borrowing rate as at the end of the
reporting period.
There have been no transfers between Level 1 and Level 2 during
the period.
Reconciliation of recurring fair value measurements included
within significant unobservable inputs (Level 3):
31 December 2015 Sales Settlements 3 July 2016
GBPm GBPm GBPm GBPm
------------------------------------------------------------------------- -------- ------------ ------------
Net (liabilities) directly associated with disposal group held
for sale (0.7) - - (0.7)
------------------------------------------------------------------ ------ -------- ------------ ------------
15. Share capital
Share capital Share capital
Issued and fully paid Number GBPm
--------------------------- -------------- --------------
Ordinary shares of 25p each
At 1 January 2016 121,103,937 30.3
Issue of shares - -
Exercise of share options - -
At 3 July 2016 121,103,937 30.3
--------------------------- -------------- --------------
Treasury shares Treasury shares
Treasury shares Number GBPm
--------------------------- ---------------- ----------------
At 1 January 2016 31,160 -
Share buyback 330,000 (0.8)
Exercise of share options (276,756) 0.7
At 3 July 2016 84,404 (0.1)
--------------------------- ---------------- ----------------
3 July 2016 5 July 2015 31 December 2015
Plc Scheme Share Number GBPm Number GBPm Number GBPm
------------------ ----------- ------- ----------- ------- ------------ --------
At period end 1 - 1 - 1 -
------------------ ----------- ------- ----------- ------- ------------ --------
As at 3 July 2016, 84,404 (5 July 2015: 31,160) treasury shares
were held in an employee benefit trust. During April 2016, the Cape
plc Employee Benefit Trust purchased 330,000 ordinary shares in the
capital of the Company for the purpose of enabling the Trustee to
satisfy existing awards and future awards granted by the Company.
As at the period ended 3 July 2016, 276,756 options had been
exercised, with the remaining 53,244 shares being held in the
employee benefit trust in addition to the amount previously held of
31,160.
plc Scheme Share
The plc Scheme Share is held by the Law Debenture Trust
Corporation plc on behalf of the Scheme creditors.
The rights attaching to the share are designed to ensure that
Scheme assets are only used to settle Scheme claims and ancillary
costs and do not confer any right to receive a distribution or
return of surplus capital save that the holder will have the right
to require the Company to redeem the share at par value on or at
any time after the termination of the Scheme.
The share carries two votes for every vote which the holders of
the other classes of shares in issue are entitled to exercise on
any resolution proposed during the life of the Scheme to engage in
certain activities specified in the Company's Articles of
Association. The Company will not be permitted to engage in certain
activities specified in the Company's Articles of Association
without the prior consent
of the holder of the share.
16. Cash generated from operations
27 weeks ended
27 weeks ended 5 July 2015(1)
3 July 2016 Restated
GBPm GBPm
--------------------------------------------------------- ---------------- ------------------
Cash flows from operating activities
Continuing operations
Profit before tax 1.4 17.6
Finance costs - net 5.4 5.2
Share of post-tax (profit) from joint ventures (2.8) (0.1)
Other non-cash movements 10.1 (1.3)
Payments made on behalf of IDC scheme (1.6) (0.9)
Share option charge 0.3 1.0
Depreciation and amortisation 10.4 9.5
Difference between pension charge and cash contributions 0.7 0.8
(Increase)/decrease in inventories (0.1) 1.6
(Increase) in trade and other receivables (13.2) (36.6)
Increase in trade and other payables 6.0 12.8
(Decrease) in provisions (0.6) (4.2)
Loss/(Gain) on sale of property, plant and equipment 0.1 (0.1)
Cash generated from continuing operations 16.1 5.3
--------------------------------------------------------- ---------------- ------------------
Discontinued operations
--------------------------------------------------------- ---------------- ------------------
Profit/(Loss) before tax 0.1 (0.2)
Decrease in trade and other receivables - 1.7
(Decrease) in trade and other payables - (1.5)
Movement in provisions (0.1) 0.5
Cash generated from discontinued operations - 0.5
--------------------------------------------------------- ---------------- ------------------
(1) Restated for the reclassification of Hong Kong to
discontinued operations.
17. Reconciliation of net cash flow to movement in adjusted net
debt
27 weeks ended 27 weeks ended
3 July 2016 5 July 2015
Total operations GBPm GBPm
------------------------------------------------- -------------- --------------
Net (decrease) in cash and cash equivalents (2.6) (20.3)
Net decrease/(increase) on revolving facility 1.1 (10.3)
Finance leases and borrowings on acquisition - (0.5)
Foreign exchange movements (2.9) 1.5
Movement in cash in disposal group held for sale 0.6 (0.7)
Movement in adjusted net debt during the period (3.8) (30.3)
Adjusted net debt(1) - opening (109.9) (101.0)
------------------------------------------------- -------------- --------------
Adjusted net debt(1) - closing (113.7) (131.3)
------------------------------------------------- -------------- --------------
(1) Adjusted net debt excludes restricted funds used to settle
industrial disease claims.
18. Industrial disease claim provision and contingent
liabilities
The Board considers that the provision of GBP104.2m for
industrial disease claims as at 3 July 2016 captures all expected
material industrial disease scheme liabilities for which the Board
believes the Group to be liable at the balance sheet date.
The Group continues to receive claims, from both individuals and
insurance companies, in connection with historical alleged exposure
to asbestos. Where claims are determined to have merit, the costs
are provided for and claims are settled in the ordinary course,
otherwise claims are defended. As legal precedent in the area of
industrial disease claims continues to evolve, new developments and
new types of claims give rise to inherent uncertainty in both the
future level of asbestos-related disease claims and of the legal
and other costs arising from such claims. If any such claims were
to be successful, it might lead to future claims against the Group
which may result in significant additional liability over and above
that recognised under the current provision.
Aviva plc has brought one such new type of claim, seeking to
establish contribution and indemnity claims ("Insurer EL Claims")
against Cape Intermediate Holdings Limited ("CIH") in respect of
employee liability settlements that it has made in response to
policies that Aviva underwrote for a liquidated Cape subsidiary
during the period 1956 to 1966 and for which Aviva has already
benefited from the associated insurance premiums. CIH is a Cape
Scheme company and the Board has received legal advice from leading
counsel that the Insurer EL Claims would constitute scheme claims
as defined in the Cape Scheme. Details of the Cape Scheme have been
filed with the Registrar of Companies and can also be found on the
Cape plc website
(http://www.capeplc.com/corporate-responsibility/asbestos-scheme-of-arrangement.aspx).
18. Industrial disease claim provision and contingent
liabilities (continued)
A sequence of preliminary court hearings in respect of the
Insurer EL Claims culminated in a determinant judgment on 19 July
2016, with some issues found in favour of CIH and some against. CIH
is seeking leave to appeal a number of aspects of this litigation.
Nevertheless, the Board announced on 20 July 2016 that it believed
it to be prudent to increase the provision held against industrial
disease claims by GBP9.7 million to take account of this judgment.
This provision represents the Board's best estimate, based on the
current information available to it, of both the liability relating
to the Insurer EL Claims currently being brought by Aviva and the
discounted present value of potential future claims of a similar
nature, using the same actuarial and economic assumptions as
disclosed in note 28 to the Group's 2015 Report and Accounts.
Given the increase in the provision, and subject to the outcome
of any appeal, the Company currently intends to make an additional
payment of approximately GBP9 million by 31 December 2016 into the
ring-fenced Scheme Fund in order to meet the funding requirements
of the Cape Scheme. This will permit the Company to continue to
make dividend payments without recourse to the Cape Scheme
trustees.
Additionally, the Group has previously disclosed a number of
product liability claims received by the Group. In particular, CIH
has received claims from both Aviva plc and RSA Group in respect of
historic and current payments made by them in their capacity as
providers of employer liability insurance in relation to claims by
employees and former employees of third-party companies arising
from asbestos-related diseases ("Insurer PL Claims"). All the
Insurer PL Claims relate to damages and costs paid by the relevant
insurer in respect of claims arising from mesothelioma disease.
A six-week trial in respect of the Insurer PL Claims has been
listed to commence on 16 January 2017. The Board has received legal
advice from leading counsel that the Insurer PL Claims place very
substantial evidential burdens upon the claimants. As a result of
the legal advice received, the Board continues to believe that
these Insurer PL claims are without merit and they are therefore
being vigorously defended; accordingly no provision has been made.
The Board intends to provide an updated disclosure in the event of
any material change in the legal position in respect of the Insurer
PL Claims as progress is made in the preparation for the trial in
January 2017. The Board has also received legal advice from leading
counsel that these Insurer PL Claims would constitute scheme claims
as defined in the Cape Scheme.
Cape's potential liability in respect of the Insurer PL Claims
outlined above and from any potential further claims and associated
costs cannot be accurately estimated at this time. Notwithstanding
that the Board believes that the Insurer PL claims do not have a
realistic chance of succeeding, an adverse decision of the court
could have material and continuing impacts on the Group and its
stakeholders, including but not limited to impacting the
implementation of the Group's strategic plans, potentially
including the Company's capacity to pay a dividend and a material
reduction in the percentage of each claim paid out to individual
claimants (in respect of damages and claimant legal costs) under
the Cape Scheme.
During 2014, a fatality of a Cape employee was suffered at a
client's offshore installation. The investigation by the enforcing
authorities is ongoing. At the date of the statement of financial
position no amounts have been provided in respect of this matter.
It is not practicable to provide an estimate of the financial
effect and there is uncertainty relating to the amount or timing of
any outflow.
The Group is responding to an enquiry by HMRC with regard to the
UK tax consequences of a transfer of intellectual property to
Singapore in 2011. HMRC has challenged the accounting treatment
adopted in the audited financial statements, and the gain arising
thereon. Cape's analysis is that the accounting treatment applied
is correct and in line with the relevant accounting standards. A
recent tax tribunal determined that the accounting treatment
adopted in a case which has similarities with the accounting for
the transfer of the Cape intellectual property was in line with the
accounting standards being applied, and that a company cannot be
forced to apply a different interpretation where the treatment
adopted is valid. The Board expects to successfully defend against
the HMRC challenge based on tax and accounting advice received. The
possible UK corporation tax liability that may arise in connection
with the enquiry is up to GBP14 million as at 3 July 2016.
The Group has contingent liabilities in respect of guarantees
and bonds entered into in the normal course of business, in respect
of which no loss is expected. The Group is required to issue trade
finance instruments to certain customers; these include tender
bonds, performance bonds, retention bonds, advance payment bonds
and standby letters of credit. As at 3 July 2016, the Group's bank
facilities relating to the issue of bonds, guarantees and letters
of credit amounted to GBP72.2 million (H1 2015: GBP52.6
million).
19. Related parties
As at 3 July 2016, there was a balance of GBP6.9 million (H1
2015: GBP11.5 million; 31 December 2015: GBP7.4 million) owed by
joint ventures. These amounts are unsecured, have no fixed date of
repayment and are repayable on demand. Amounts owed by joint
ventures are assessed for recoverability and, where necessary,
provided for in line with normal commercial transactions. Revenue
arising from transactions with joint ventures in the first half of
2016 was GBP6.8 million (H1 2015: GBP10.9 million; 31 December
2015: GBP20.6 million).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEAFIEFMSELA
(END) Dow Jones Newswires
August 23, 2016 02:00 ET (06:00 GMT)
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