TIDMALU
RNS Number : 9481A
Alumasc Group PLC
08 February 2022
Tuesday 8 February 2022
The Alumasc Group plc
Interim results
On track to deliver Full Year expectations
Alumasc (ALU.L) the sustainable building products, systems and
solutions Group today announces results for the six months ended 31
December 2021.
Commenting on the interim results, Paul Hooper, Chief Executive
of Alumasc said:
" The Alumasc Group reported a solid performance during the
first half and is on track to deliver its expectations for the full
year. Although there were some headwinds experienced due to
Covid-19 driven contract delays and cost inflation across the
industry during the period, the business performed well and has
good momentum going into the second half.
Alumasc is at the forefront of providing high-quality, low
carbon, sustainable products, systems and solutions, the majority
of which manage the scarce resources of water and energy and
improve quality of life for the owner/occupier in the built
environment. Our commitment to sustainable business is evidenced by
Timloc, our housebuilding products business, becoming the first
building products manufacturer in the UK to be carbon neutral
across its operations.
I am therefore delighted that Alumasc's green credentials have
been recognised by the award of the London Stock Exchange Green
Economy Mark in November 2021 and that we are well on the way to
becoming a market leader in the provision of sustainable building
products."
Financial Overview: Solid underlying performance
Half year to 31 December 2021 2020
-------------------------------------- ---- ----
Revenue (GBPm) 46.3 45.6
Underlying profit before tax (GBPm) 5.3 6.0
Underlying operating margin (%) (1) 11.9 13.6
Underlying earnings per share (pence) 11.8 13.4
EBITDA (GBPm) (2) 6.8 7.4
Statutory profit before tax (GBPm) 5.1 5.5
Basic earnings per share (pence) 11.2 12.2
Dividends per share (pence) 3.35 3.25
Net bank debt at 31 December (GBPm) 4.1 0.2
A reconciliation of underlying to statutory profit is provided
in note 4 to the interim financial statements.
(1) Underlying operating margin: Underlying operating profit as
a percentage of revenue.
(2) EBITDA: Underlying operating profit before interest, tax,
depreciation and amortisation.
-- Group revenues of GBP46.3m, were 1.6% (GBP0.7m) ahead of H1
FY21 (GBP45.6m, which benefited from some GBP2.5m of business
delayed from FY20 by Covid-19). Excluding this, sales growth was
7.5%.
-- Export sales grew by 41% to GBP8.7 million and represented
19% of total Group revenue (H1 FY21: 13%).
-- The strength of our brand positioning and customer
relationships allowed the successful pass-through of input cost
inflation. As a result, gross margin was only slightly diluted at
34.6% (H1 FY21: 36.7%).
-- Underlying operating margin remained strong at 11.9% (H1
FY21: 13.6%), with statutory operating margin of 11.7% (H1 FY21:
12.9%), after absorbing the lower gross margin as well as the
resumption of business development costs which had been curtailed
by the Covid-19 restrictions. Structural cost savings of GBP3.1m
p.a., achieved over the previous two years, remain.
-- The Group is selectively investing in opportunities to accelerate growth.
-- Underlying profit before tax was GBP5.3m (H1 FY21: GBP6.0m);
with statutory profit before tax of GBP5.1m (H1 FY21: GBP5.5m).
-- Net bank debt at 31 December was GBP4.1m (31 December 2020:
GBP0.2m net bank debt). During the period the Group repaid GBP0.8m
of VAT and pension liabilities deferred from FY20 under the Group's
Covid-19 cash conservation measures. In addition, the Group
actively increased its stock holdings to maintain customer service
and mitigate price increases, in response to the global supply
chain challenges and raw material cost inflation.
-- The defined benefit pension scheme deficit was further
reduced during the first half to GBP2.5m (30 June 2021: GBP4.6m),
mainly as a result of deficit reduction payments and asset
performance.
-- The Board plans to pay an interim dividend of 3.35p per share
in April 2022. This represents an increase of 3.1% on the previous
interim dividend, and reflects the encouraging first half
performance and Board's confidence in the strength of the Group's
strategy and its future prospects.
Divisional Overview
-- Water Management Division made a record profit of GBP4.1m,
17.6% ahead of H1 FY21. Revenues were 18.9% ahead, with strong
export and online sales growth. Operating margins remained in line
with the prior period at 18%, driven by volume growth and cost
savings.
-- The Building Envelope Division reported a reduced revenue and
delivered a profit of GBP0.9m (5% operating margin), GBP1.6m below
H1 FY21. Alumasc Roofing performed well against a prior half year
which included significant business delayed from FY20. Levolux's
performance was affected by Covid-19 in its core UK and USA
markets, resulting in delays in orders, and it reported a loss for
H1 FY22 of GBP1.0m (H1 FY21: GBP0.2m profit). With its restructured
cost base and improved capability, Levolux is well placed to
recover as commercial market activity resumes.
-- Housebuilding Products Division grew its revenue by 6.4%,
representing a very commendable performance given a challenging
environment of inflationary pressures and supply-side constraints
holding back site activity. Housebuilding Products continued to
deliver the highest return on sales in the Group, with a 19%
operating margin (H1 FY21: 22%).
Outlook
-- Good momentum across the majority of the Group's businesses,
and a growing pipeline of opportunities at Levolux.
-- A strong balance sheet and cash position allows investment to accelerate future growth.
-- The business is on track to deliver against its full year
expectations and looks forward to the future with confidence.
Enquiries:
The Alumasc Group plc +44 (0) 1536 383844
Paul Hooper, CEO
Simon Dray, Group Finance Director
Peel Hunt (Broker)
Mike Bell +44 (0) 20 7418 8831
finnCap (NOMAD)
Julian Blunt + 44 (0)207 220 0561
Camarco alumasc@camarco.co.uk
Ginny Pulbrook + 44 (0)203 757 4992
Rosie Driscoll + 44 (0)203 757 4981
REVIEW OF INTERIM RESULTS
Chief Executive's Statement
The first half of the 2021/22 financial year saw strong sales
momentum across most markets and the effective management of
ongoing, industry-wide, supply chain and inflationary
pressures.
In our Annual Report and Accounts 2021 we indicated that we
estimated that circa GBP2.5m sales had been carried forward from
the lockdown affected prior year, most of this helping to boost the
prior year first half performance. Excluding this from the
comparator, underlying sales growth in H1 FY22 was GBP3.2m (7.5%).
Price rises and surcharges, necessary to pass through the sustained
increase in cost prices, were responsible for GBP1.9m (4.4%) of
this. The remaining 3.1% increase in revenue includes reduced
volumes at Levolux; revenue growth in the other businesses was
closer to 10%.
In particular, our Water Management Division had an excellent
first half year, increasing its revenue by 19% (GBP3.6m) to
GBP22.8m, a great effort and assisted by increased export sales
and, in particular, the start of the shipments to Hong Kong's Chek
Lap Kok Airport, illustrating the global reputation of our water
management products. Our Roofing business did very well to almost
fully offset the delayed revenues from lockdown and a significant
contract which both benefited H1 FY21. In addition, our
Housebuilding Products Division's revenue grew by 6% and was
assisted once again by new product launches.
Group export sales grew by 41% to GBP8.7 million and represented
19% of total revenue (H1 FY21: 13%).
Levolux's performance was affected by Covid-19 (in the UK and
USA) resulting in delays in orders. It reported a loss for H1 FY22
of GBP1.0m (H1 FY21: GBP0.2m profit). However Levolux, with its
restructured cost base and improved capability, is well placed to
recover as commercial market activity resumes. Enquiry levels are
increasing and we anticipate an improved order intake in the second
half.
Operational Review
Water Management
H1 FY22 H1 FY21
Revenue GBP22.8m GBP19.2m
--------- ---------
Underlying operating GBP4.1m GBP3.5m
profit
--------- ---------
Underlying operating
margin 18.1% 18.3%
--------- ---------
Operating profit GBP4.1m GBP3.5m
--------- ---------
Alumasc Water Management Division delivered another strong and
record performance in the first half year, significantly increasing
underlying operating profit. The drivers of the 18% improvement in
operating profit to GBP4.1 million (18.1% operating margin) were
the continued control of operating costs while accompanied by a
significant revenue increase of GBP3.6m (19%) which saw market
share growth, particularly within the civil drainage and roofline
markets.
Within this the E-Commerce business, Rainclear, returned another
significant revenue increase, this time of 18%, following new
product launches. Gatic Slotdrain performed very strongly in H1
FY22, and was successful in winning several new larger car parks
work and new Amazon facilities, including one in Valencia, Spain. A
Slotdrain project was completed for a highway in Costa Rica.
Although activity was quiet at airports in the UK, the first
shipments to Chek Lap Kok's Airport Runway 3 were made in the
second quarter.
Alumasc Water Management Solutions performed very well, with
successful market and sales initiatives benefiting in particular
sales of its Alumasc Rainwater and Skyline brands.
Building Envelope
H1 FY22 H1 FY21
Revenue GBP17.8m GBP21.1m
--------- ---------
Underlying operating GBP0.9m GBP2.5m
profit
--------- ---------
Underlying operating
margin 4.9% 12.0%
--------- ---------
Operating profit GBP0.8m GBP2.4m
--------- ---------
The Building Envelope Division had a reduced revenue in both
parts of its division and produced a profit of GBP0.9m (5%
operating margin), GBP1.6m below H1 FY21, largely reflecting the
result at Levolux, discussed below.
The Roofing business performed ahead of internal expectations in
both its newbuild and refurbishment markets, against a comparative
that included a large one-off contract as well as significant sales
delayed from the prior year. It has benefited significantly from
the recruitment of high quality sales people who have improved
sales in regions that had been weaker in the past. The Covid-19
impact also meant that there was more external work carried out on
roofing than on internal refurbishment for Academies. The Roofing
business continues to focus on high end specification offers
supported by the highest standards, with a customer focused service
level which delivers low carbon systems combined with safety in
installation; all supported by long-term warranties. This has
allowed the business to increase market share in its core
sectors.
Covid-19 also played a part in slowing down newbuild commercial
market projects, which particularly affected Levolux. This
depressed the order intake in the first half to a position
significantly lower than was anticipated, and led to a GBP1.0m loss
at the half year, compared to a GBP0.2m profit in H1 FY21. However,
levels of customer enquiries are increasing and the business is
actively pursuing several significant opportunities. With its
streamlined operating structure and improved capability, Levolux is
well positioned to benefit as market activity resumes.
Specification sales opportunities are growing from the new
integrated Building Envelope sales approach with an increasing
number of combined project wins taking place.
Housebuilding Products
H1 FY22 H1 FY21
Revenue GBP5.7m GBP5.3m
-------- --------
Underlying operating GBP1.1m GBP1.2m
profit
-------- --------
Underlying operating
margin 19.3% 22.2%
-------- --------
Operating profit GBP1.1m GBP1.1m
-------- --------
Timloc, our Housebuilding Products business, continued to
perform well. Its industry leading next day delivery service and
continued introduction of new products underpins this
performance.
This Division, representing 12% of Group's revenues, grew its
revenue by GBP0.4m (6.4%). This was a very commendable performance
in a challenging environment in which housebuilding activity on
sites was frequently interrupted by commodity product and labour
shortages and inflationary pressures. Despite these, Housebuilding
Products maintained its strong returns with a 19% (H1 FY21: 22%)
operating margin. New product introductions, outstanding service
and rigorous cost controls contributed significantly to this
performance. The achievement of 100% On Time In Full ('OTIF')
delivery performance was, once again, appreciated by its
customers.
New products such as meter boxes, fire rated stop socks,
non-combustible InvisiWeep, and the relaunch of the Cavity Closer
range all had a positive impact on the business. Ongoing investment
in new equipment with much improved energy efficiency, delivering
excellent pay-backs, has made a significant contribution in the
reduction of the Group's carbon footprint. Timloc became the first
building products manufacturer in the UK to source all its energy
from renewable sources. In addition, it has become the first
building products manufacturer in the UK to become carbon neutral
across its operations.
Strategic Overview
The significant improvement in the Group's performance across
the last two years emanate from the execution of the Group's
strategy which includes the stated objectives of:
Short-term:
-- Continuing to simplify, streamline and reduce fixed costs across the Group.
-- Recovery of Levolux's financial performance.
Long-term:
-- Drive organic growth across the Group.
-- Continual efficiency improvements.
-- Geographical expansion within selected territories.
-- New product development focused on environmental and sustainable solutions.
-- Bolt-on M&A to expand products and markets.
-- Use of sustainable materials with recycled and fully recyclable materials.
We have managed to streamline the business and have removed
GBP3.1m p.a. of structural costs in the last two years, with no
reduction in capacity or capability. Of this, GBP2.5m of costs were
removed from Levolux, to ensure the business' cost base is
efficient and provides a good platform for profitable growth as the
order book pipeline and future opportunities are executed.
The Group has continued to progress its long-term strategy to
deliver profitable growth through leveraging its strong strategic
positions in sustainable building products, and to outperform the
UK construction market while continuing development of export
markets. The Group's 2% revenue increase, including the 41% growth
in export revenue, is testament to that.
Alumasc is also in a very strong position to benefit from the
move towards sustainable construction and green buildings, both in
terms of its own actions and through the development of its
portfolio of products to manage energy consumption in buildings, to
produce a greener built environment, and to manage the scarce
resource of water. Many internal initiatives have also been taken
to act in an environmentally sustainable manner, including the
sourcing of electricity from renewable sources for 100% of the
Group's supply. The Group's Net Zero planning is underway.
In recognition of its portfolio of environmental solutions and
contribution to the global green economy, Alumasc was very pleased
to be a recipient of the coveted London Stock Exchange Green
Economy Mark in November 2021.
Financial Review
The Group's underlying tax rate was 19.4%, marginally below H1
FY21 (19.6%). Underlying earnings per share for the period were
11.8p, 11.9% lower than H1 FY21 (13.4p), reflecting the lower
underlying profit before tax. Basic earnings per share were 11.2p
(H1 FY21: 12.2p).
Cash flows and net debt
H1 FY22 H1 FY21
GBPm GBPm
EBITDA * 6.8 7.4
Change in working capital (1.8) 0.9
Deferred VAT paid (0.6) (0.6)
Operating cash flow 4.4 7.7
Capital expenditure (1.4) (1.0)
Interest (0.2) (0.1)
Tax (1.3) 0.4
Pension deficit funding (1.3) (1.3)
Lease payments (0.4) (0.4)
Dividend payments (2.2) (0.7)
Purchase of own shares (0.4) -
Sub total (2.8) 4.6
Non-underlying payments (0.3) (0.4)
Net cash flow (3.1) 4.2
======== ==========
Net bank debt at 31 December 4.1 0.2
======== ========
* EBITDA: Underlying operating profit before interest, tax,
depreciation and amortisation
The Group's operating cash inflow was GBP4.4m (H1 FY21:
GBP7.7m), which included a GBP0.6m (H1 FY21: GBP0.6m) repayment to
HMRC for VAT deferred during the initial Covid-19 lockdown. The
cash outflow into working capital was GBP1.8m (H1 FY21: GBP0.9m
inflow), including a GBP2.6m outflow into inventory, resulting from
higher cost prices and increased stock holdings to maintain
continuity of supply and secure pricing on committed orders; and a
net inflow of GBP0.8m from other working capital lines. Average
trade working capital as a percentage of sales for the half year
was 15.5% (H1 FY21: 14.9%).
Capital expenditure was GBP1.4m (H1 FY21: GBP1.0m), representing
111% of depreciation (H1 FY21: 87%). Principal investments were
made on capacity/capability upgrades (GBP0.4m), tooling for new
products (GBP0.4m) and system upgrades (GBP0.2m).
Tax paid of GBP1.3m reflected higher payments on account in
respect of FY21 and FY22. The prior half year included GBP0.4m of
tax refunded from FY19.
The GBP1.3m (H1 FY21: GBP1.3m) of pension fund payments included
the final GBP0.2m (H1 FY21: GBP0.2m) of payments deferred under the
Group's Covid-19 cash conservation measures.
After the GBP2.2m (H1 FY21: GBP0.7m) payment of the prior year
final dividend, GBP0.4m (H1 FY21: GBPnil) of own share purchases to
fulfil the vesting of employee share awards, and GBP0.6m (H1 FY21:
GBP0.5m) of lease and interest payments, net bank debt at December
2021 was GBP4.1m (December 2020: GBP0.2m).
Pensions and net assets
The Group's pension deficit reduced further to GBP2.5m at
December 2021 (June 2021: GBP4.6m, December 2020: GBP12.8m), as a
result of the GBP1.3m of deficit repair payments, investment gains
and the effect of higher bond yields, which offset an increase in
the inflation rate assumption. The scheme's next triennial
actuarial valuation is scheduled for 31 March 2022, and the Group
expects to conclude ongoing funding discussions with the scheme
trustees prior to publication of its full year results later this
year.
Group net assets increased in the period by GBP2.2m to GBP38.3m,
as a result of the profit retained after dividend payments and the
further reduction in the pension deficit. Post tax return on
investment (rolling twelve month underlying operating profit
divided by capital invested) was 17.8% (December 2021: 13.9%, June
2021: 19.8%).
Interim Dividend
The Board has decided to declare an increased interim dividend
of 3.35p per ordinary share, payable on 6 April 2022 to
shareholders on the register on 25 February 2022.
The Board
A new Non-Executive Director, Karen McInerney, joined us at the
start of the second half year. Karen, a Chartered Accountant, is
currently the Group Financial Controller at Computacenter plc, a
FTSE 250 company. Karen took on the chairmanship of the Audit
Committee, which was relinquished by Vijay Thakrar on his
appointment as Chairman of The Alumasc Group.
Vijay became Chairman following the retirement of John McCall in
December 2021. John served as Chairman and Chief Executive on the
buy-out of Alumasc from Consolidated Goldfields in 1984, remaining
as Chief Executive until 2003 and continued as Chairman until his
retirement. The Group is indebted to John for his wise counsel
across the many years. We also said goodbye to Jon Pither who
retired having served for 29 years as a non-executive director.
Once again, the Group is indebted to Jon's wise and sometimes
iconoclastic counsel.
Outlook
The Group has entered the second half of the year with good
momentum, and a growing pipeline of opportunities within Levolux
that should come to fruition once activity resumes within the
commercial market. Challenges are likely to remain around Covid-19
precautions, supply chain delays and input cost inflation, but we
are confident in the resilience of our businesses. We believe our
strong positions in sustainable building products will remain a key
driver of future growth, and our strong balance sheet will allow us
to continue to invest in opportunities to accelerate this.
Accordingly the Board confirms it remains on track to deliver
full year results in line with its expectations.
Paul Hooper, Chief Executive
8 February 2022
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
for the half year to 31 December 2021
Year to
Half year to 31 December Half year to 31 December 30 June
2021 2020 2021
Non-underlying Non-underlying
Underlying Total Underlying Total Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 5 46,269 - 46,269 45,551 - 45,551 90,465
Cost of sales (30,257) - (30,257) (28,851) - (28,851) (57,950)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Gross profit 16,012 - 16,012 16,700 - 16,700 32,515
Net operating
expenses
Net operating
expenses
before
non-underlying
items (10,489) - (10,489) (10,497) - (10,497) (21,511)
IAS 19 past
service
pension cost 4 - - - - (150) (150) (150)
Other
non-underlying
items 4 - (119) (119) - (178) (178) (296)
Net operating
expenses (10,489) (119) (10,608) (10,497) (328) (10,825) (21,957)
4,
Operating profit 5 5,523 (119) 5,404 6,203 (328) 5,875 10,558
Finance expenses 6 (265) (67) (332) (251) (134) (385) (757)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit before
taxation 5,258 (186) 5,072 5,952 (462) 5,490 9,801
Tax expense 7 (1,020) (34) (1,054) (1,167) 33 (1,134) (2,215)
Profit for the
period 4,238 (220) 4,018 4,785 (429) 4,356 7,586
=========== ============== =========== =========== ============== =========== ==========
Other
comprehensive
income:
Items that will
not
be recycled to
profit
or loss:
Actuarial gain
on
defined
benefit
pensions,
net of tax 821 4,373 10,393
----------- ----------- ----------
Items that are or
may be recycled
subsequently
to profit or
loss:
Effective
portion
of changes in
fair
value of cash
flow
hedges, net of
tax 83 (300) (385)
Exchange
differences
on
retranslation
of
foreign
operations 10 (41) (46)
93 (341) (431)
----------- ----------- ----------
Other
comprehensive
gain for the
period,
net of tax 914 4,032 9,962
----------- ----------- ----------
Total
comprehensive
profit for the
period,
net of tax 4,932 8,388 17,548
=========== =========== ==========
Earnings per Pence Pence Pence
share:
Basic earnings
per
share 10 11.2 12.2 21.2
=========== =========== ==========
Diluted earnings
per
share 10 11.0 12.1 20.8
=========== =========== ==========
Alternative
Performance
Measures:
Underlying
earnings
per share
(pence) 10 11.8 13.4 23.7
=========== =========== ==========
Full reco0nciliations of underlying to statutory profits and
earnings per share are provided in notes 4 and 10 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
at 31 December 2021
31 December 31 December 30 June
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment
- owned assets 12,368 11,210 11,734
Property, plant and equipment
- right of use assets 5,081 5,474 5,469
Goodwill 18,705 18,705 18,705
Other intangible assets 3,152 3,389 3,321
Deferred tax assets 630 2,441 1,145
------------- ------------- -----------
39,936 41,219 40,374
Current assets
Inventories 13,488 9,779 10,871
Trade and other receivables 14,369 14,987 18,617
Contract assets 2,526 2,416 2,772
Cash at bank 11 2,878 19,759 4,999
33,261 46,941 37,259
Total assets 73,197 88,160 77,633
------------- ------------- -----------
Liabilities
Non-current liabilities
Interest bearing loans and
borrowings 11 (6,963) (19,935) (5,936)
Lease liability (4,475) (4,914) (4,811)
Employee benefits payable (2,520) (12,847) (4,581)
Provisions (1,251) (1,028) (1,267)
Deferred tax liabilities (1,010) (1,203) (966)
------------- ------------- -----------
(16,219) (39,927) (17,561)
Current liabilities
Trade and other payables (16,289) (17,194) (20,266)
Contract liabilities (160) (662) (745)
Lease liability (1,145) (670) (795)
Provisions (471) (1,172) (834)
Corporation tax payable (419) (758) (1,019)
Derivative financial liabilities (165) (163) (268)
(18,649) (20,619) (23,927)
Total liabilities (34,868) (60,546) (41,488)
------------- ------------- -----------
Net assets 38,329 27,614 36,145
============= ============= ===========
Equity
Called up share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own shares (435) (416) (406)
Hedging reserve (134) (132) (217)
Foreign currency reserve 65 60 55
Profit and loss account reserve 33,871 23,140 31,751
Total equity 38,329 27,614 36,145
============= ============= ===========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2021
Half year Half year
to to Year to
31 December 31 December 30 June
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Operating activities
Operating profit 5,404 5,875 10,558
Adjustments for:
Depreciation 1,166 1,056 2,146
Amortisation 174 157 361
Loss/(gain) on disposal of property,
plant and equipment 17 3 (16)
IAS 19 past service pension cost - 150 150
(Increase)/decrease in inventories (2,617) (1,183) (2,275)
Decrease/(increase) in receivables 4,494 (1,133) (5,119)
(Decease)/increase in trade and
other payables (4,278) 2,516 5,287
Movement in provisions (379) (176) (275)
Cash contributions to retirement
benefit schemes (1,307) (1,307) (2,614)
Share based payments 50 100 397
------------- ------------- -----------
Cash generated by operating activities 2,724 6,058 8,600
Tax (paid)/received (1,320) 409 (161)
Net cash inflow from operating activities 1,404 6,467 8,439
------------- ------------- -----------
Investing activities
Purchase of property, plant and
equipment (1,361) (804) (1,666)
Payments to acquire intangible fixed
assets (5) (194) (330)
Proceeds from sales of property,
plant and equipment - 41 46
Net cash outflow from investing
activities (1,366) (957) (1,950)
------------- ------------- -----------
Financing activities
Bank interest paid (141) (141) (207)
Equity dividends paid (2,233) (715) (1,878)
Draw down/(repayment) of amounts
borrowed 1,000 - (14,000)
Principal paid on lease liabilities (352) (340) (692)
Interest paid on lease liabilities (83) (90) (178)
Purchase of own shares (430) - -
Exercise of share based payments 70 - -
Refinancing costs - - (65)
Net cash outflow from financing
activities (2,169) (1,286) (17,020)
------------- ------------- -----------
Net (decrease)/increase in cash
at bank and bank overdrafts (2,131) 4,224 (10,531)
Net cash at bank and bank overdraft
brought forward 4,999 15,576 15,576
Net (decrease)/increase in cash
at bank and bank overdraft (2,131) 4,224 (10,531)
Effect of foreign exchange rate
changes 10 (41) (46)
Net cash at bank and bank overdraft
carried forward 11 2,878 19,759 4,999
============= ============= ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2021
Profit
Capital reserve Foreign and loss
Share Share - Hedging currency account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2021 4,517 445 (406) (217) 55 31,751 36,145
Profit for the period - - - - - 4,018 4,018
Exchange differences on retranslation
of foreign operations - - - - 10 - 10
Net gain on cash flow hedges - - - 103 - - 103
Tax on derivative financial liability - - - (20) - - (20)
Share based payments - - - - - 50 50
Actuarial gain on defined benefit
pension schemes, net of tax - - - - - 616 616
Own shares used to satisfy exercise
of share awards - - 402 - - - 402
Acquisition of own shares - - (431) - - - (431)
Exercise of share based incentives - - - - - (331) (331)
Dividends - - - - - (2,233) (2,233)
At 31 December 2021 4,517 445 (435) (134) 65 33,871 38,329
======= ======= =============== ========= ========== ========== =======
Profit
Capital reserve Foreign and loss
Share Share - Hedging currency account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 4,517 445 (416) 168 101 15,026 19,841
Profit for the period - - - - - 4,356 4,356
Exchange differences on retranslation
of foreign operations - - - - (41) - (41)
Net loss on cash flow hedges - - - (370) - - (370)
Tax on derivative financial liability - - - 70 - - 70
Share based payments - - - - - 100 100
Actuarial gain on defined benefit
pension schemes, net of tax - - - - - 4,373 4,373
Dividends - - - - - (715) (715)
At 31 December 2020 4,517 445 (416) (132) 60 23,140 27,614
======= ======= =============== ========= ========== ========== =======
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
for the half year to 31 December 2020
1. Basis of preparation
The condensed consolidated interim financial statements of The
Alumasc Group plc and its subsidiaries have been prepared in
accordance with International Financial Reporting Standards (IFRS)
in conformity with the requirements of the Companies Act 2006 that
are effective at 31 December 2021.
The condensed consolidated interim financial statements have
been prepared using the accounting policies set out in the
statutory accounts for the financial year to 30 June 2021 and in
accordance with AIM Rule 18, and the same accounting policies will
be adopted in the 2022 annual financial statements.
The consolidated financial statements of the Group as at and for
the year ended 30 June 2021 are available on request from the
Company's registered office at Burton Latimer, Kettering,
Northants, NN15 5JP or on the website www.alumasc.co.uk .
The comparative figures for the financial year ended 30 June
2021 are not the Company's statutory accounts for that financial
year but have been extracted from those accounts. Those accounts
have been reported on by the Company's auditors and delivered to
the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements for the
half year ended 31 December 2021 are not statutory accounts and
have been neither audited nor reviewed by the Group's auditors.
They do not contain all of the information required for full
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 30 June 2021.
These condensed consolidated interim financial statements were
approved by the Board of Directors on
8 February 2022.
The Group performed ahead of the Base Case trading scenario
modelled as part of the 30 June 2021 year end Going Concern review,
and also compared to the stress testing performed in relation to
additional National lockdowns. On the basis of the Group's
financing facilities and current financial plans and sensitivity
analyses, the Board is satisfied that the Group has adequate
resources to continue in operational existence for twelve months
from the date of signing this report and accordingly continues to
adopt the going concern basis in preparing these condensed
consolidated interim financial statements.
2. Estimates
The preparation of condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amount of assets and liabilities, income and expense.
Actual results may differ from these estimates.
Except as described below, in preparing these condensed
consolidated interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
as at and for the year ended 30 June 2021, namely the valuation of
defined benefit pension obligations, the valuation of the Group's
acquired goodwill and the recognition of revenue and profit on
contracts with customers where revenue is recognised over time.
During the six months ended 31 December 2021, management
reassessed and updated its estimates in respect of retirement
benefit obligations based on market data available at 31 December
2021. The resulting impact was a GBP0.8 million pre-tax actuarial
gain, calculated using IAS 19 conventions, recognised in the six
month period to 31 December 2021.
3. Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
provided on pages 46 to 49 of Alumasc's Report and Accounts for the
year ended 30 June 2021. The Board considers these risks and
uncertainties remain relevant to the current financial year.
Specific risks and uncertainties relating to the Group's
performance in the second half year are:
- Continued global economic uncertainty surrounding the Covid-19 pandemic;
- The impact of disruption to our customers' operations from
shortages of building materials, labour and road haulage, and
delays in the global container shipping industry;
- Prolonged period of bad weather impacting the Group's construction markets; and
- Potential impact of the current geopolitical uncertainty globally.
4. Underlying to statutory profit reconciliation
Half year Half year Year to
to 31 December to 31 December 30 June
Profit before tax 2021 2020 2021
GBP'000 GBP'000 GBP'000
Underlying profit before tax 5,258 5,952 10,515
Brand amortisation (119) (119) (238)
IAS 19 net pension scheme finance costs (67) (134) (268)
IAS 19 past service cost in respect
of GMP equalisation - (150) (150)
Restructuring & relocation costs - (59) (58)
Statutory profit before tax 5,072 5,490 9,801
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
Operating profit 2021 2020 2021
GBP'000 GBP'000 GBP'000
Underlying operating profit 5,523 6,203 11,004
Brand amortisation (119) (119) (238)
IAS 19 past service cost in respect
of GMP equalisation - (150) (150)
Restructuring & relocation costs - (59) (58)
Statutory operating profit 5,404 5,875 10,558
=============== =============== ========
In the presentation of underlying profits, management treats the
amortisation of acquired brands and IAS 19 pension costs
consistently as non-underlying items because they are material
non-cash and non-trading items that typically would be excluded in
assessing the value of the business.
In addition, management presented the following items as
non-underlying in the prior period, as they are non-recurring items
that are judged to be significant enough to affect the
understanding of the underlying trading performance of the
business:
- One-off costs of material restructuring and relocation of
separate businesses within the Group in 2020/21;
- One-off IAS 19 past service pension cost relating to
Guaranteed Minimum Pension ("GMP") equalisation between men and
women, following a High Court decision on 20 November 2020; and
- One-off deferred tax rate change adjustment charge of GBP319k
relating to the increase in main rate of UK corporation tax from
19% to 25% with effect from 1 April 2023.
5. Segmental analysis
In accordance with IFRS 8 Operating Segments, the segmental
analysis below follows the Group's internal management reporting
structure.
Half year Half year Year to
to 31 December to 31 December 30 June
Revenue 2021 2020 2021
GBP'000 GBP'000 GBP'000
Water Management 22,783 19,160 38,370
Building Envelope 17,817 21,064 41,022
Housebuilding Products 5,669 5,327 11,073
Group Revenue 46,269 45,551 90,465
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
Operating profit 2021 2020 2021
GBP'000 GBP'000 GBP'000
Water Management 4,118 3,501 6,115
Building Envelope 881 2,519 4,255
Housebuilding Products 1,096 1,184 2,552
Unallocated central costs (572) (1,001) (1,918)
Underlying operating profit 5,523 6,203 11,004
Non-underlying items (119) (328) (446)
Statutory operating profit 5,404 5,875 10,558
=============== =============== ========
6. Finance expenses
Half year Half year
to to Year to
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Finance costs - Bank overdrafts 19 8 24
- Revolving credit facility 163 153 287
- Interest on lease liabilities 83 90 178
------------ ------------ --------
265 251 489
- IAS 19 net pension scheme finance
costs 67 134 268
332 385 757
============ ============ ========
7. Tax expense
Half year Half year Year to
to 31 December to 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Current tax:
UK corporation tax 671 652 1,443
Overseas tax 54 29 46
Amounts under provided in previous
years - - 23
Total current tax 725 681 1,512
Deferred tax:
Origination and reversal of temporary
differences 329 450 405
Amounts under/(over) provided in previous
years - 3 (21)
Rate change adjustment - - 319
Total deferred tax 329 453 703
Total tax expense 1,054 1,134 2,215
---------------- ---------------- ---------
Deferred tax recognised in other comprehensive
income:
Actuarial gains on pension schemes 205 1,026 2,099
Cash flow hedges 20 (70) (90)
Tax charged to other comprehensive
income 225 956 2,009
Total tax charge in the statement of
comprehensive income 1,279 2,090 4,224
================ ================ =========
8. Dividends
The Directors have approved an interim dividend per share of
3.35 pence (2020/21: 3.25 pence) which will be paid on 6 April 2022
to shareholders on the register at the close of business on 25
February 2022. The cash cost of the dividend is expected to be
GBP1,202,000. In accordance with accounting requirements, as the
dividend was approved after the statement of financial position
date, it has not been accrued in the interim consolidated financial
statements. A final dividend per share of 6.25 pence in respect of
the 2020/21 financial year was paid at a cash cost of GBP2,233,000
during the six months to 31 December 2021.
9. Share Based Payments
During the period the Group awarded 160,000 options (2020/21:
170,000) under the Executive Share Option Scheme ("ESOS"). These
options have an exercise price of 226 pence and require certain
criteria to be fulfilled before vesting. 78,810 existing options
were exercised during the period (2020/21: none) and 41,190
existing options lapsed (2020/21: 120,000).
Total awards granted under the Group's Long Term Incentive Plans
("LTIP") amounted to 214,020 (2020/21: 265,760). LTIP awards have
no exercise price but are dependent on certain vesting criteria
being met. 228,511 existing LTIP awards were exercised during the
period (2020/21: none) and 109,713 existing LTIP awards lapsed
(2020/21: 257,688).
10. Earnings per share
Basic earnings per share is calculated by dividing the net
profit for the period attributable to ordinary equity shareholders
of the parent by the weighted average number of ordinary shares in
issue during the period. Diluted earnings per share is calculated
by dividing the net profit attributable to ordinary equity
shareholders of the parent by the weighted average number of
ordinary shares in issue during the period, after allowing for the
exercise of outstanding share options. The following sets out the
income and share data used in the basic and diluted earnings per
share calculations:
Half year Half year Year to
to 31 December to 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Net profit attributable to equity
holders of the parent 4,018 4,356 7,586
================ ================ =============
000s 000s 000s
Basic weighted average number of
shares 35,821 35,764 35,766
Dilutive potential ordinary shares
- employee share options 549 169 637
Diluted weighted average number of
shares 36,370 35,933 36,403
================ ================ ===============
Half year Half year Year to
to 31 December to 31 December 30 June
2021 2020 2021
Pence Pence Pence
Basic earnings per share 11.2 12.2 21.2
================ ================ ===============
Diluted earnings per share 11.0 12.1 20.8
================ ================ ===============
Calculation of underlying earnings per share:
Half year Half year Year to
to 31 December to 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Reported profit before taxation 5,072 5,490 9,801
Brand amortisation 119 119 238
IAS 19 net pension scheme finance
costs 67 134 268
Pension GMP equalisation - 150 150
Restructuring & relocation costs - 59 58
Underlying profit before taxation 5,258 5,952 10,515
Tax at underlying Group tax rate
of 19.4%
(2020/21 first half year: 19.6%;
full year: 19.5%) (1,020) (1,167) (2,050)
Underlying earnings 4,238 4,785 8,465
---------------- ---------------- -------------
Weighted average number of shares 35,821 35,764 35,766
---------------- ---------------- -------------
Underlying earnings per share 11.8p 13.4p 23.7p
================ ================ =============
11. Movement in borrowings
Cash at
bank /bank Bank loans Net bank Lease Total borrowings
overdrafts cash/(debt) liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2021 4,999 (5,936) (937) (5,606) (6,543)
Cash flow movements (2,131) (1,000) (3,131) 352 (2,779)
Non-cash movements - (27) (27) (366) (393)
Effect of foreign exchange
rates 10 - 10 - 10
At 31 December 2021 2,878 (6,963) (4,085) (5,620) (9,705)
============ ============ ============= ============= ==================
Cash at
bank /bank Bank loans Net bank Lease liabilities Total borrowings
overdrafts cash/(debt)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 15,576 (19,909) (4,333) (5,924) (10,257)
Cash flow movements 4,224 - 4,224 340 4,564
Non-cash movements - (26) (26) - (26)
Effect of foreign exchange
rates (41) - (41) - (41)
At 31 December 2020 19,759 (19,935) (176) (5,584) (5,760)
=========== ============ ============= =================== ==================
12. Related party disclosure
The Group has a related party relationship with its Directors
and with its UK pension schemes. There has been no material change
in the nature of the related party transactions described in note
29 of Alumasc's Report and Accounts for the year ended 30 June
2021.
Responsibility Statement
The Directors confirm that, to the best of their knowledge, the
condensed consolidated interim financial statements have been
prepared in accordance with Alternative Investment Market ("AIM")
Rule 18.
On behalf of the Board
Paul Hooper Simon Dray
Chief Executive Group Finance Director
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END
IR BKOBNFBKDPBK
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