TIDMPRV
RNS Number : 4377R
Porvair PLC
29 June 2015
For immediate release 29 June 2015
Porvair plc
Half yearly results for the six months ended 31 May 2015
Porvair plc ("Porvair" or "the Group"), the specialist
filtration and environmental technology group, today announces its
half yearly results for the six months ended 31 May 2015.
Highlights
-- Encouraging financial performance:
o As expected, revenue was lower at GBP46.3m (2014: GBP51.0m)
due to the impact of large projects in the prior period.
o Lower revenue from large projects offset by 8% underlying
growth(1) .
o Profit before tax up by 10% to GBP4.2m (2014: GBP3.8m).
o Earnings per share up 15% to 6.9 pence (2014: 6.0 pence).
o Net cash increased to GBP6.2m (31 May 2014: net debt of
GBP1.0m; 30 November 2014: net cash of GBP5.3m).
-- Microfiltration:
o Underlying revenues up 9%.
o Large contracts running smoothly including first contribution
from CNOOC contract.
o Strong growth in the US - revenue up 44%.
o New facilities in UK and USA opened on schedule and
budget.
o Order book healthy.
-- Metals Filtration:
o Revenues up 6% (2% lower in constant currency) compared with a
strong 2014.
o Superior performance of patented products continues to support
growth.
o Acquisition in June of Fiber Ceramics will improve product
capabilities and add capacity.
o New facility in China expected to be operational in the third
quarter.
-- Interim dividend increased over 8% to 1.3 pence (2014: 1.2 pence).
Commenting on the outlook, Ben Stocks, Chief Executive,
said:
"Overall market demand is encouraging and order books continue
to be healthy. We are winning market share with new products,
notably in Metals Filtration and Seal Analytical. The Group has a
strong balance sheet, a promising project pipeline and has made a
good start to 2015."
Note 1. Underlying growth: Revenue growth excluding the impact of large projects.
For further information please contact:
Porvair plc 0207 466 5000 today
Ben Stocks, Chief Executive 01553 765 500 thereafter
Chris Tyler, Group Finance Director
Buchanan Communications 0207 466 5000
Charles Ryland / Stephanie Watson
A copy of the presentation that accompanies these results is
available at www.porvair.com
Operating Review
Overview
Profit before tax for the six months ended 31 May 2015 was up
10% to GBP4.2m (2014: GBP3.8m). Earnings per share grew 15% to 6.9p
(2014: 6.0p). Cash generation was strong again with the Group
holding a net cash balance of GBP6.2m (31 May 2014: net debt of
GBP1.0m) at the end of the period, GBP7.2m higher than the previous
year.
As anticipated in previous statements, revenue at GBP46.3m
(2014: GBP51.0m) was GBP4.7m lower than the prior year due to
revenue from large projects being GBP8.1m lower than in the first
half of 2014. Underlying growth was 8% reflecting encouraging
progress against financial and strategic targets.
The second half of 2015 has started well and order books are
healthy, notably in Seal Analytical which is having a good
year.
Progress towards key operating objectives in the period
include:
-- Large projects running to plan;
-- Expanded facilities attracting new customers;
-- New products introduced in both Seal Analytical and Selee Corp; and
-- A promising pipeline of future work.
Strategic statement
Porvair's strategy has remained consistent for a number of
years. It is to generate shareholder value through the development
of specialist filtration and environmental technology businesses,
both organically and by acquisition. Such businesses have certain
key characteristics in common:
-- specialist design or engineering skills are required;
-- product use and replacement is mandated by regulation,
quality accreditation or a maintenance cycle; and
-- products are often designed into a specification and will typically have long life cycles.
Over the last five years to 31 May 2015 this strategy delivered
11% compound annual revenue growth and cash generated from
operations of GBP53 million. Over the same period, the Group has
invested GBP19 million in capital expenditure and acquisitions and
turned a net debt of GBP14 million into a net cash position of over
GBP6 million.
Business model outline
Our customers require filtration or emission control products
that perform to a given specification; for a minimum amount of
time; often with prescribed physical attributes such as size or
weight. We win business by offering the best technical solutions
for these requirements at an acceptable commercial cost. Filtration
expertise is applicable across all markets with new products
generally being adaptations of existing designs. Experience in
particular markets or applications is valuable in building customer
confidence. Domain knowledge is important, as is deciding where to
focus resources.
This leads us to:
1. Focus on end-markets where we see long term growth potential.
2. Look for applications where product use is mandated and
replacement demand is therefore regular.
3. Make new product development a core business activity.
4. Establish geographic presence where end-markets require.
5. Maintain a conservative balance sheet while re-investing in both organic and acquired growth.
Therefore:
-- We focus on four end-markets: aviation; energy and
industrial; environmental laboratories; and molten metals. All have
clear structural growth drivers.
-- Our products are specialist in nature and typically protect
costly or complex downstream systems. As a result they are replaced
regularly. A high proportion of our annual revenue is from repeat
orders.
-- We encourage new product development in order to generate
growth rates in excess of the underlying market. Where possible we
build robust intellectual property around our product developments.
About 30% of our revenues are derived from patent protected
products.
-- Our geographic presence follows the markets we serve.
Aviation and metals filtration revenues are strong in the Americas.
In Asia, water analysis markets are growing and the demand for
gasification plants is strongest.
-- We aim to maintain a conservative balance sheet, meeting
dividend and investment needs from free cash flow. Porvair is a
cash generative business. In the last three years we have expanded
manufacturing capacity in the UK, Germany, US and China and made
five small acquisitions.
Operating structure
-- The Group has two divisions. The Microfiltration division
serves the aviation, environmental laboratory, and
energy/industrial markets. The Metals Filtration division focuses
on filtration of molten metals, principally aluminium.
-- The Group manufactures in the UK, US, Germany and China.
Plans for investment and future development
As noted in January 2015, the Group is actively investing in
capacity expansion and new product development:
-- The new UK site at New Milton was formally opened in March.
Old facilities have now been sold or handed back. In addition to
generally upgraded facilities, the new plant offers growth capacity
for industrial filters.
-- The new building at Caribou, US is open. Further investment
on this site is planned for the second half of 2015, notably in
clean manufacturing capabilities.
-- The Group is considering plans to expand its US industrial filtration facility in Virginia.
-- Seal Analytical consolidated its US operations by expanding its facility in Wisconsin.
-- The Metals filtration division expansion in China is proceeding on time and to budget.
-- Gasification projects remain on plan. During the period,
commissioning work started in the first of these in Gwangyang,
South Korea. The next stage, running the plant up to operating
conditions, is expected to start in the second half of 2015. Almost
all systems have been shipped to Reliance for assembly on site and
the first revenue has been recognised on the CNOOC project.
-- New product development projects remain central to Porvair's
day to day activities. A new formulation for the filtration of
aluminium is testing well and patent protection is pending. Two
further customers qualified the new aluminium lithium filter.
Bioscience filtration projects continue to show promise.
Metals Filtration
2015 2014 Growth
GBPm GBPm %
Revenue 15.7 14.8 6
----- ----- -------
Operating profit 1.2 1.2 3
----- ----- -------
Revenue was up 6% to GBP15.7m (2014: GBP14.8m). The division is
having a good year despite the strong dollar making export sales
more challenging. Moreover, the prior year included a large
equipment sale to a Chinese customer that, as noted at the time,
will not repeat in 2015.
Despite these issues, Metals Filtration continues to build
market share with its suite of patented products, and as a result
revenue in constant currency is only 2% lower than in a record
2014. In two side-by-side competitive product performance tests in
an aluminium customer's facilities this year, our product
performance was compelling and supports the value-added sales
approach that we prefer. Our rivals compete on price not
performance and while this is occasionally painful, we feel it
positions the business well for the longer term.
In the niche areas of metals filtration we continue to do well
with unusual formulations and technical expertise. Our carbon foam
products are selling steadily, as are our structured products,
which are slowly developing into a higher margin line of work.
The acquisition of the trade and assets of Fiber Ceramics in
June is expected to add annual revenue of around $1m to the
division. More importantly, its range of products improves both the
technical capability of the business in steel filtration and the
production capacity for high temperature products.
Building of our second factory in China finished early in the
year and manufacturing equipment is starting to be assembled. We
expect to start production during the third quarter and have a new
formulation with which to launch in Asia.
Microfiltration
2015 2014 Growth
GBPm GBPm %
Revenue 30.6 36.3 (16)
----- ----- -------
Operating profit 4.3 4.0 8
----- ----- -------
Revenue was GBP30.6m, (2014: GBP36.3m) with large projects
contributing GBP8.1m less than the prior year. Underlying growth
was therefore 9%, close to our five year average. A first set of
patented longer life gasification spares has been shipped; coolant
filtration units for the Boeing 787-9 and 787-10 are in
manufacture; and new filters for both aero inerting and bioscience
are in development. In the US, revenue growth has continued
strongly in most markets, with our plant in Caribou performing
well.
Large projects continue to be a focus. The installation in Korea
is now assembled with only minor modifications required. Final
acceptance testing will start, as planned, later in the year. Most
shipments to the installation in India have been made, and the new
project in China is in the planning and early manufacturing stage.
Discussions on local operational support for these installations
are progressing. Further shipments for the GBP11 million UK
Government nuclear remediation contract are planned for the second
half of the year. The pipeline of future projects is promising.
Seal Analytical sales remained level against the prior year.
Throughout the period Seal Analytical's order book was at record
levels but a three month parts delay from a key supplier held
revenue back. The situation is now resolved and the business had a
strong May and June, with July also looking promising.
Tax
The Group tax charge was GBP1.1 million (2014: GBP1.1 million).
This is an effective rate of 26% (2014: 30%), in line with the rate
recorded for the full year ended 30 November 2014 and higher than
the UK standard corporate tax rate because tax rates are higher on
profits made in Germany and the US.
Earnings per share and dividends
The basic earnings per share for the period increased 15% to 6.9
pence (2014: 6.0 pence). The Board is declaring an increased
interim dividend of 1.3 pence (2014: 1.2 pence) per share, an
increase of over 8%.
Cash flow and net debt
Cash generated from operations in the six months to 31 May 2015
was GBP3.1m (2014: GBP2.7m). Working capital increased in the
period by GBP2.8m (2014: GBP3.0m) principally as a result of strong
revenue in May and a high inventory of gasification spares for
delivery in June.
Interest paid was GBP0.1m (2014: GBP0.2m). Tax payments reduced
to GBP0.6m (2014: GBP1.2m) following a repayment in relation to
2013.
Capital expenditure was GBP1.4m (2014: GBP2.9m), mainly spent on
completing the expansion of facilities in US, UK and China. GBP0.5m
(2014: GBPnil) was received on the disposal of a UK facility and
GBP0.5m (2014: GBPnil) was paid in relation to acquisitions
completed in 2013.
Closing net cash at 31 May 2015 was GBP6.2m (30 November 2014:
net cash of GBP5.3m; 31 May 2014 net debt of GBP1.0m).
Return on capital employed
The Group's return on capital employed was 15% (2014:13%).
Excluding the impact of goodwill and the pension liability the
return on operating capital employed was 47% (2014: 40%).
Current trading and outlook
Overall market demand is encouraging and order books continue to
be healthy. We are winning market share with new products, notably
in Metals Filtration and Seal Analytical. The Group has a strong
balance sheet, a promising project pipeline and has made a good
start to 2015.
Ben Stocks
Group Chief Executive
Related parties
There were no related party transactions in the six months ended
31 May 2015 (2014: none).
Principal risks
Each division considers strategic, operational and financial
risks and identifies actions to mitigate those risks. These risk
profiles are reviewed by the Board and updated at least annually.
The principal risks and uncertainties for the remaining six months
of the financial year are discussed below. Further details of the
Group's risk profile analysis can be found in the Strategic Report
section of the Annual Report for the year ended 30 November
2014.
Certain elements of the Group's order position, although healthy
at 31 May 2015, can change quickly in the face of changing economic
circumstances. The Metals Filtration division and environmental
laboratory supplies and general industrial filtration within the
Microfiltration division all have relatively short lead times and
order cycles and, therefore, revenues are subject to fluctuations,
which could have a material effect on the Group's results for the
balance of 2015.
The Microfiltration division serves several customers whose
orders are large relative to Porvair's overall order book. Should
any of these be cancelled or delayed it may affect the Group's
results for the balance of 2015.
Forward looking statements
Certain statements in this half yearly financial information are
forward-looking. Although the Group believes that the expectations
reflected in these forward-looking statements are reasonable, it
can give no assurance that these expectations will prove to have
been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
We undertake no obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Consolidated income statement
For the six months ended 31 May
Six months ended 31
May
----------------------
2015 2014
Note Unaudited Unaudited
GBP'000 GBP'000
Revenue 1 46,261 51,024
Cost of sales (30,560) (36,130)
---------- ----------
Gross profit 15,701 14,894
Other operating expenses (11,218) (10,699)
---------- ----------
Operating profit 1 4,483 4,195
Interest payable and similar charges (319) (413)
Profit before income tax 4,164 3,782
Income tax expense (1,062) (1,149)
Profit for the period attributable to
shareholders 3,102 2,633
---------- ----------
Earnings per share (basic) 2 6.9p 6.0p
Earnings per share (diluted) 2 6.9p 5.9p
Consolidated statement of comprehensive income
For the six months ended 31 May
Six months ended 31
May
------------------------
2015 2014
Unaudited Unaudited
GBP'000 GBP'000
Profit for the period 3,102 2,633
----------- -----------
Other comprehensive income:
Items that may be subsequently reclassified to
profit or loss
Exchange differences on translation of foreign
subsidiaries 409 (794)
Changes in fair value of interest rate swaps
held as a cash flow hedge - 20
Changes in the fair value of foreign exchange
contracts held as a cash flow hedge (160) 11
----------- -----------
249 (763)
Net other comprehensive income 249 (763)
----------- -----------
Total comprehensive income for the period attributable
to shareholders of Porvair plc 3,351 1,870
----------- -----------
The accompanying notes are an integral part of this interim
financial information.
Consolidated balance sheet
As at 31 May
As at 30
As at 31 May November
------------------------ ----------
Note 2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 4 12,539 10,865 12,336
Goodwill and other intangible
assets 4 43,331 41,766 43,209
Deferred tax asset 2,900 3,710 3,240
58,770 56,341 58,785
Current assets
Inventories 13,060 12,733 11,363
Trade and other receivables 18,373 18,570 17,067
Derivative financial instruments - 985 66
Cash and cash equivalents 5 8,218 6,428 7,891
----------- ----------- ----------
39,651 38,716 36,387
Current liabilities
Trade and other payables (25,919) (24,230) (24,910)
Current tax liabilities (1,432) (1,103) (919)
Bank overdraft and loans (244) (984) (727)
Derivative financial instruments (151) - (118)
(27,746) (26,317) (26,674)
Net current assets 11,905 12,399 9,713
Non-current liabilities
Bank loans (1,794) (6,440) (1,900)
Deferred tax liability (1,173) (1,242) (1,494)
Retirement benefit obligations (12,732) (11,787) (12,833)
Other payables - (298) -
Provisions for other liabilities
and charges (144) (132) (138)
(15,843) (19,899) (16,365)
----------- ----------- ----------
Net assets 54,832 48,841 52,133
----------- ----------- ----------
Capital and reserves
Share capital 6 896 883 887
Share premium account 6 35,344 35,155 35,334
Cumulative translation reserve 7 1,225 (1,103) 816
Retained earnings 7 17,367 13,906 15,096
----------- ----------- ----------
Total equity 54,832 48,841 52,133
----------- ----------- ----------
The interim financial information on pages 7 to 18 was approved
by the Board of Directors on 26 June 2015 and was signed on its
behalf by:
Ben Stocks Chris Tyler
Group Chief Executive Group Finance Director
The accompanying notes are an integral part of this interim
financial information.
Consolidated cash flow statement
For the six months ended 31 May
Six months ended 31
May
--------------------------------
Note 2015 Unaudited 2014 Unaudited
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 8 3,055 2,658
Interest paid (91) (207)
Tax paid (591) (1,195)
--------------- ---------------
Net cash generated from operating activities 2,373 1,256
--------------- ---------------
Cash flows from investing activities
Acquisition of subsidiaries (net of (490) -
cash acquired)
Purchase of property, plant and equipment 4 (1,385) (2,866)
Purchase of intangible assets 4 (6) (12)
Proceeds from sale of property, plant
and equipment 475 9
Net cash used in investing activities (1,406) (2,869)
--------------- ---------------
Cash flows from financing activities
Net proceeds from the issue of ordinary
shares 6 19 16
(Repayment of)/increase in borrowings 9 (637) 1,333
Net cash (used in)/generated from financing
activities (618) 1,349
--------------- ---------------
Net increase/(decrease) in cash and
cash equivalents 9 349 (264)
Effects of exchange rate changes (22) (81)
--------------- ---------------
327 (345)
Cash and cash equivalents at the beginning
of the period 7,891 6,773
--------------- ---------------
Cash and cash equivalents at the end
of the period 5 8,218 6,428
--------------- ---------------
The accompanying notes are an integral part of this interim
financial information.
Consolidated statement of changes in equity
For the six months ended 31 May (Unaudited)
Share Cumulative
Share premium translation Retained
capital account reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 December 2013 875 35,147 (309) 11,967 47,680
---------- --------- ------------- ----------- ----------
Profit for the period - - - 2,633 2,633
Other comprehensive income
for the period:
Exchange differences on
translation of foreign subsidiaries - - (794) - (794)
Changes in fair value of
interest rate swaps held
as a cash flow hedge - - - 20 20
Changes in the fair value
of foreign exchange contracts
held as a cash flow hedge - - - 11 11
---------- --------- ------------- ----------- ----------
Total comprehensive income
for the period - - (794) 2,664 1,870
---------- --------- ------------- ----------- ----------
Transactions with owners:
Proceeds from shares issued,
net of costs 8 8 - - 16
Employee share option schemes:
Value of employee services
net of tax - - - 70 70
Dividends approved as final
or paid - - - (795) (795)
---------- --------- ------------- ----------- ----------
Balance at 31 May 2014 883 35,155 (1,103) 13,906 48,841
---------- --------- ------------- ----------- ----------
Balance at 1 December 2014 887 35,334 816 15,096 52,133
---------- --------- ------------- ----------- ----------
Profit for the period - - - 3,102 3,102
Other comprehensive income
for the period:
Exchange differences on
translation of foreign subsidiaries - - 409 - 409
Changes in the fair value
of foreign exchange contracts
held as a cash flow hedge - - - (160) (160)
---------- --------- ------------- ----------- ----------
Total comprehensive income
for the period - - 409 2,942 3,351
---------- --------- ------------- ----------- ----------
Transactions with owners:
Proceeds from shares issued,
net of costs 9 10 - - 19
Employee share option schemes:
Value of employee services
net of tax - - - 225 225
Dividends approved as final
or paid - - - (896) (896)
---------- --------- ------------- ----------- ----------
Balance at 31 May 2015 896 35,344 1,225 17,367 54,832
---------- --------- ------------- ----------- ----------
The accompanying notes are an integral part of this interim
financial information.
Notes to the financial information
1. Segmental analyses
The chief operating decision maker has been identified as the
Board of Directors. The Board of Directors review the Group's
internal reporting in order to assess performance and allocate
resources. Management have determined the operating segments based
on this reporting.
As at 31 May 2015, the Group is organised on a worldwide basis
into two operating segments:
1) Metals Filtration
2) Microfiltration
The segment results for the period ended 31 May 2015 are as
follows:
Six months ended 31 May Metals Microfiltration Other unallocated Group
2015 - Unaudited Filtration
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 15,690 30,571 - 46,261
------------ ---------------- ------------------ --------
Operating profit/(loss) 1,206 4,294 (1,017) 4,483
Interest payable and
similar charges - - (319) (319)
------------ ---------------- ------------------ --------
Profit/(loss) before
income tax 1,206 4,294 (1,336) 4,164
Income tax expense - - (1,062) (1,062)
------------ ---------------- ------------------ --------
Profit/(loss) for the
period 1,206 4,294 (2,398) 3,102
------------ ---------------- ------------------ --------
The segment results for the period ended 31 May 2014 are as
follows:
Six months ended 31 May Metals Microfiltration Other unallocated Group
2014 -Unaudited Filtration
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 14,755 36,269 - 51,024
------------ ---------------- ------------------ --------
Operating profit/(loss) 1,166 3,963 (934) 4,195
Interest payable and
similar charges - - (413) (413)
------------ ---------------- ------------------ --------
Profit/(loss) before
income tax 1,166 3,963 (1,347) 3,782
Income tax expense - - (1,149) (1,149)
------------ ---------------- ------------------ --------
Profit/(loss) for the
period 1,166 3,963 (2,496) 2,633
------------ ---------------- ------------------ --------
Other Group operations are included in "Other unallocated".
These mainly comprise Group corporate costs, including new business
development costs, some research and development costs, general
financial costs, and income tax expense.
Segment assets and liabilities
At 31 May 2015 - Unaudited Metals Filtration Microfiltration Other unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000
Segmental assets 28,269 57,791 4,143 90,203
Cash and cash equivalents - - 8,218 8,218
------------------ ---------------- ------------------ ---------
Total assets 28,269 57,791 12,361 98,421
------------------ ---------------- ------------------ ---------
Segmental liabilities (3,929) (20,748) (4,142) (28,819)
Retirement benefit
obligations - - (12,732) (12,732)
Borrowings - - (2,038) (2,038)
------------------ ---------------- ------------------ ---------
Total liabilities (3,929) (20,748) (18,912) (43,589)
------------------ ---------------- ------------------ ---------
At 31 May 2014 - Unaudited Metals Filtration Microfiltration Other unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000
Segmental assets 24,920 57,987 5,722 88,629
Cash and cash equivalents - - 6,428 6,428
------------------ ---------------- ------------------ ---------
Total assets 24,920 57,987 12,150 95,057
------------------ ---------------- ------------------ ---------
Segmental liabilities (3,832) (18,561) (4,612) (27,005)
Retirement benefit
obligations - - (11,787) (11,787)
Borrowings - - (7,424) (7,424)
------------------ ---------------- ------------------ ---------
Total liabilities (3,832) (18,561) (23,823) (46,216)
------------------ ---------------- ------------------ ---------
At 30 November 2014 Metals Filtration Microfiltration Other unallocated Group
- Audited
GBP'000 GBP'000 GBP'000 GBP'000
Segmental assets 27,119 55,481 4,681 87,281
Cash and cash equivalents - - 7,891 7,891
------------------ ---------------- ------------------ ---------
Total assets 27,119 55,481 12,572 95,172
------------------ ---------------- ------------------ ---------
Segmental liabilities (3,249) (20,379) (3,951) (27,579)
Retirement benefit
obligations - - (12,833) (12,833)
Borrowings - - (2,627) (2,627)
------------------ ---------------- ------------------ ---------
Total liabilities (3,249) (20,379) (19,411) (43,039)
------------------ ---------------- ------------------ ---------
Geographical analysis
Revenue
Six months ended 31 May
--------------------------------------------------------
2015 2014
Unaudited Unaudited
By destination By origin By destination By origin
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 6,407 17,985 8,515 25,639
Continental Europe 6,367 3,819 6,339 4,014
United States of America 18,602 23,782 15,845 20,631
Other NAFTA 3,514 - 3,232 -
South America 817 - 834 -
Asia 10,006 675 15,579 740
Africa 548 - 680 -
--------------- ---------- --------------- ----------
46,261 46,261 51,024 51,024
--------------- ---------- --------------- ----------
2. Earnings per share
Six months ended 31 May
--------------------------------------------------------------
2015 2014
Unaudited Unaudited
Earnings Weighted Per share Earnings Weighted Per share
average amount average amount
number number
GBP'000 of shares Pence GBP'000 of shares Pence
--------- ------------- ---------- --------- ------------- ----------
Basic EPS - Earnings
attributable to
ordinary shareholders 3,102 44,659,379 6.9 2,633 44,017,345 6.0
Effect of dilutive
securities - share
options - 146,675 - - 283,053 (0.1)
--------- ------------- ---------- --------- ------------- ----------
Diluted EPS 3,102 44,806,054 6.9 2,633 44,300,398 5.9
--------- ------------- ---------- --------- ------------- ----------
3. Dividends per share
Six months ended 31 May
------------------------------------------
2015 2014
Unaudited Unaudited
Per share GBP'000 Per share GBP'000
Final dividend approved 2.00p 896 1.80p 795
---------- -------- ---------- --------
The final dividend approved was paid to shareholders on 6 June
2015.
The Directors have declared an interim dividend of 1.3 pence
(2014: 1.2 pence) per share to be paid on 4 September 2015 to
shareholders on the register at the close of business on 31 July
2015. The ex-dividend date for the shares is 30 July 2015.
4. Property, plant and equipment and goodwill and other intangible assets
Six months ended 31 May 2015 Property, Goodwill Total
- Unaudited plant and other
and equipment intangible
assets
--------------- ------------ --------
GBP'000 GBP'000 GBP'000
Opening net book amount at 1
December 2014 12,336 43,209 55,545
Additions 1,385 6 1,391
Disposals (397) - (397)
Depreciation and amortisation (912) (182) (1,094)
Exchange movements 127 298 425
Closing net book amount at 31
May 2015 12,539 43,331 55,870
--------------- ------------ --------
Six months ended 31 May 2014 Property, Goodwill Total
- Unaudited plant and other
and equipment intangible
assets
--------------- ------------ --------
GBP'000 GBP'000 GBP'000
Opening net book amount at 1
December 2013 9,006 42,535 51,541
Additions 2,866 12 2,878
Disposals (18) - (18)
Depreciation and amortisation (849) (177) (1,026)
Exchange movements (140) (604) (744)
Closing net book amount at 31
May 2014 10,865 41,766 52,631
--------------- ------------ --------
5. Cash and cash equivalents
As at
As at 31 May 30 November
------------------------ -------------
2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 8,218 6,428 7,891
Cash and cash equivalents 8,218 6,428 7,891
----------- ----------- -------------
6. Share capital and premium
Number Ordinary Share premium
of shares shares account Total
(thousands) Unaudited Unaudited Unaudited
------------- ----------- -------------- ------------
GBP'000 GBP'000 GBP'000
At 1 December 2013 43,734 875 35,147 36,022
Employee share options
schemes:
Exercise of options under
share option schemes 433 8 8 16
------------- ----------- -------------- ------------
At 31 May 2014 44,167 883 35,155 36,038
------------- ----------- -------------- ------------
At 1 December 2014 44,363 887 35,334 36,221
Employee share options
schemes:
Exercise of options under
share option schemes 450 9 10 19
------------- ----------- -------------- ------------
At 31 May 2015 44,813 896 35,344 36,240
------------- ----------- -------------- ------------
The authorised number of ordinary shares is 75 million (2014: 75
million) shares with a par value of 2.0 pence (2014: 2.0 pence) per
share. All issued shares are fully paid. 450,221 (2014: 433,345)
ordinary shares of 2p each were issued in the period on the
exercise of employee share options for a cash consideration of
GBP19,000 (2014: GBP16,000).
7. Other reserves
Cumulative
translation Retained
reserve earnings
Unaudited Unaudited
------------- ------------
GBP'000 GBP'000
At 1 December 2013 (309) 11,967
Profit for the period attributable
to shareholders - 2,633
Direct to equity:
Final dividends approved - (795)
Share based payments - 238
Tax on share based payments - (168)
Interest rate swap cash flow hedge - 20
Foreign exchange contract cash
flow hedge - 11
Exchange differences (794) -
At 31 May 2014 (1,103) 13,906
------------- ------------
At 1 December 2014 816 15,096
Profit for the period attributable
to shareholders - 3,102
Direct to equity:
Final dividends approved - (896)
Share based payments - 238
Tax on share based payments - (13)
Foreign exchange contract cash
flow hedge - (160)
Exchange differences 409 -
At 31 May 2015 1,225 17,367
------------- ------------
8. Cash generated from operations
Six months ended 31
May
------------------------
2015 2014
Unaudited Unaudited
GBP000 GBP000
Operating profit 4,483 4,195
Non-cash pension charge 166 120
Share based payments 238 238
Depreciation and amortisation 1,094 1,026
(Profit)/loss on disposal of property,
plant and equipment (78) 9
----------- -----------
Operating cash flows before movement
in working capital 5,903 5,588
----------- -----------
Increase in inventories (1,694) (1,273)
Increase in trade and other receivables (1,338) (4,558)
Increase in payables 184 2,901
Increase in working capital (2,848) (2,930)
----------- -----------
Cash generated from operations 3,055 2,658
----------- -----------
9. Reconciliation of net cash flow to movement in net debt
Six months ended 31
May
------------------------
2015 2014
Unaudited Unaudited
GBP'000 GBP'000
Net increase/(decrease) in cash and cash equivalents 349 (264)
Effects of exchange rate changes (70) 22
Repayment of / (increase in) borrowings 637 (1,333)
Net cash at the beginning of the period 5,264 579
----------- -----------
Net cash/(debt) at the end of the period 6,180 (996)
----------- -----------
10. Financial risk management and financial instruments
The Group's finance department includes a team that performs the
valuations of financial assets and liabilities required for
financial reporting purposes, including Level 3 fair values. This
team reports directly to the Group Finance Director and the Audit
Committee. Discussions of valuation processes and results are held
between the Group Finance Director, the Audit Committee and the
valuation team at least twice a year, in line with the Group's
external reporting dates.
The table below analyses financial instruments carried at fair
value, by valuation method. The different levels have been defined
below:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
-- Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2).
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
Level Level Level Total
1 2 3
--------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets and (liabilities)
at fair value through profit
or loss:
* Trading derivatives - (57) - (57)
Deferred and contingent consideration - - (328) (328)
Foreign exchange contracts
used for hedging - (94) - (94)
---------- -------- -------- --------
At 31 May 2015 - (151) (328) (479)
---------- -------- -------- --------
Financial assets and (liabilities)
at fair value through profit
or loss:
* Trading derivatives - (118) - (118)
Deferred and contingent consideration - - (924) (924)
Foreign exchange contracts
used for hedging - 66 - 66
---------- -------- -------- --------
At 30 November 2014 - (52) (924) (976)
---------- -------- -------- --------
There were no transfers between levels during the period, and
there were no changes in valuation techniques in the period.
11. Post balance sheet event - Acquisition
Agreement has been reached to acquire the goodwill, business and
trading assets of Fiber Ceramics, Inc on 29 June 2015. This small
acquisition provides filtration products for steel foundry
applications.
12. Exchange rates
Exchange rates for the US dollar during the period were:
Average rate Average rate Closing rate Closing rate
to 31 May to 31 May at 31 May at 30 Nov
15 14 15 14
Unaudited Unaudited Unaudited Unaudited
US dollar 1.53 1.66 1.53 1.57
13. Seasonality
The results for the six months ended 31 May 2015 are impacted by
a lower number of working days in the first six months of the year
than in the second half of the year.
14. Basis of preparation
Porvair plc is a public limited company registered in the UK and
listed on the London Stock Exchange.
This unaudited condensed half-yearly consolidated financial
information for the six months ended 31 May 2015 has been prepared
in accordance with the Disclosure and Transparency Rules ('DTR') of
the Financial Conduct Authority and with IAS 34, 'Interim financial
reporting' as adopted by the European Union. The condensed
half-yearly consolidated financial information should be read in
conjunction with the annual financial statements for the year ended
30 November 2014, which were approved by the Board of Directors on
23 January 2015 and which have been prepared in accordance with
IFRSs as adopted by the European Union.
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 30 November 2014, as
described in those financial statements.
Taxes on income in the interim period are accrued using the tax
rate that would be applicable to expected total annual
earnings.
This condensed half-yearly consolidated financial information
has been prepared on a going concern basis under the historical
cost convention, as modified by the revaluation of certain current
assets, financial assets and financial liabilities held for trading
and derivative contracts, which are held at fair value.
The preparation of condensed half-yearly consolidated financial
information in conformity with generally accepted accounting
principles requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the condensed half-yearly consolidated financial information and
the reported amounts of revenues and expenses during the reporting
period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results may
ultimately differ from those estimates.
After having made appropriate enquiries, including a review of
progress against the Group's budget for 2015, its medium term plans
and taking into account the banking facilities available until
January 2018, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing this condensed half-yearly
consolidated financial information.
This condensed half-yearly consolidated financial information
and the comparative figures does not constitute full accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 30 November 2014, which
include an unqualified audit report, no emphasis of matter
paragraph and no statements under sections 498(2) or (3) of the
Companies Act 2006, have been delivered to the Registrar of
Companies.
The condensed half-yearly consolidated financial information
does not include all financial risk management information and
disclosures required in the annual financial statements; it should
be read in conjunction with the Group's annual financial statements
for the year ended 30 November 2014. There have been no changes in
any risk management policies since the year end.
This report will be available at Porvair plc's registered office
at 7 Regis Place, Bergen Way, King's Lynn, PE30 2JN and on the
Company's website www.porvair.com.
Statement of directors' responsibilities
The Directors confirm that this condensed half-yearly
consolidated financial information has been prepared in accordance
with IAS 34 as adopted by the European Union and that the interim
management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months of the year, their impact on the condensed
half-yearly consolidated financial information and a description of
the principal risks and uncertainties for the remaining six months
of the financial year; and
-- material related party transactions in the first six months
of the year and any material changes in the related party
transactions described in the last annual report.
The Directors of Porvair plc are listed in the Porvair plc
Annual Report for the year ended 30 November 2014. A list of
current Directors is maintained on the Porvair plc website
www.porvair.com.
By order of the board
Ben Stocks
Group Chief Executive
Chris Tyler
Group Finance Director
26 June 2015
Independent review report to Porvair plc
Report on the condensed half-yearly consolidated financial
information
Our conclusion
We have reviewed the condensed half-yearly consolidated
financial information defined below, in the half-yearly results of
Porvair plc for the six months ended 31 May 2015. Based on our
review, nothing has come to our attention that causes us to believe
that the condensed half-yearly consolidated financial information
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.
This conclusion is to be read in the context of what we say in
the remainder of this report.
What we have reviewed
The condensed half-yearly consolidated financial information
which is prepared by Porvair plc comprises:
-- the consolidated balance sheet as at 31 May 2015;
-- the consolidated income statement and consolidated statement
of comprehensive income for the period then ended;
-- the consolidated statement of cash flows for the period then ended;
-- the consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the condensed half-yearly consolidated financial information.
As disclosed in note 14, the financial reporting framework that
has been applied in the preparation of the full annual financial
statements of the group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The condensed half-yearly consolidated financial information
included in the half-yearly results have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
What a review of condensed half-yearly consolidated financial
information involves
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.
We have read the other information contained in the half-yearly
results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed half-yearly consolidated financial information.
Responsibilities for the condensed half-yearly consolidated
financial information and the review
Our responsibilities and those of the directors
The half-yearly results, including the condensed half-yearly
consolidated financial information, is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly results in accordance with the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express to the company a conclusion on
the condensed half-yearly consolidated financial information in the
half-yearly results based on our review. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of complying with the Disclosure and Transparency Rules of
the Financial Conduct Authority and for no other purpose. We do
not, in giving this conclusion, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
26 June 2015
Cambridge
Notes
(a) The maintenance and integrity of the Porvair plc website is
the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the condensed half-yearly consolidated
financial information since it was initially presented on the
website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of condensed half-yearly consolidated financial
information may differ from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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