TIDMSIXH
RNS Number : 7308R
600 Group PLC
01 July 2015
The 600 Group PLC
Full Year Results for the year ended 28 March 2015
The 600 Group PLC ("the Group"), the AIM listed distributor,
designer and manufacturer of industrial products (AIM: SIXH), today
announces its full year results for the year ended 28 March
2015.
The Group has made substantial changes in the year to improve
the way it operates and invested in and acquired companies to give
it a much stronger presence in its core markets. It has also
strengthened management at Board and operational level and these
changes are improving the operational performance
significantly.
There is now in place a highly motivated team of people
developing new markets for the branded machine tools and ancillary
products, improving the range of machines and the levels of
customer service and at the same time actively looking for
opportunities to acquire companies where they can increase market
share in key areas such as laser marking and the distribution of
industrial products.
CORPORATE AND OPERATIONAL HIGHLIGHTS
-- Increased revenues and improved market share in the US and
Europe in a challenging trading environment
-- Acquisition of TYKMA Inc - a leading laser marking business.
-- Investment in ProPhotonix Ltd - a designer and distributor of
laser related products and LED systems
-- New long term debt package in place including the issue of
GBP7.7m of loan notes with warrants
-- Launch of new Harrison and Colchester lathes and introduction
of Clausing product ranges to Europe
-- Strengthened Board and senior management team
FINANCIAL HIGHLIGHTS
-- Profit before tax GBP3.68m (2014: 2.47m)
-- Underlying profit before tax* GBP2.01m (2014: GBP1.97m)
-- Earnings per share 2.66p (2014:2.19p)
-- Underlying earnings per share* of 2.09p (2014:1.90p)
-- Revenues increased by 5% to GBP43.8m (2014: GBP41.7m)
-- Group net operating margin* maintained at 5.6%
* From continuing activities, before pension credit interest,
amortisation of shareholder loan costs, special items and share
based payment costs
Commenting today, Paul Dupee, Executive Chairman of The 600
Group PLC said:
"This has been a year of substantial change. We have made two
significant investments in TYKMA and the holding in ProPhotonix.
TYKMA is now fully integrated with our Electrox business under the
leadership of David Grimes in the US and is already making a good
contribution to revenues and profits. We continue to maintain a
cordial and constructive relationship with the ProPhotonix
Board.
In our industrial products and machine tools business, we have
an excellent team of sales and engineering professionals where Don
Haselton of our US business is leading the focus on revenue growth
through market development utilising the Colchester, Harrison,
Clausing and Pratt Burnerd brands."
SUMMARY OF FINANCIAL FY15 FY14
RESULTS GBPm GBPm
Revenues 43.79 41.71
Underlying Operating
profit* 2.46 2.35
Bank and other interest (0.45) (0.38)
Underlying Profit before
taxation* 2.01 1.97
Non-bank finance income
(net) 0.70 0.69
Special items (net) 0.97 (0.19)
Profit before taxation 3.68 2.47
Taxation charge (1.33) (0.62)
Total profit for the
year 2.35 1.85
Earnings per share
Underlying basis* 2.09p 1.90p
Total for the year 2.66p 2.19p
* From continuing activities, before pension credit interest,
amortisation of shareholder loan costs, special items and share
based payment costs
More Information on the group can be viewed at:
www.600group.com
Enquiries:
------------------------- ---------------------
The 600 Group PLC Tel: 01924 415000
------------------------- ---------------------
Paul Dupee, Executive
Chairman
------------------------- ---------------------
Neil Carrick, Finance
Director
------------------------- ---------------------
Spark Advisory Partners Tel: 020 3368 3553
Limited (NOMAD)
------------------------- ---------------------
Sean Wyndham-Quin/
Miriam Greenwood
------------------------- ---------------------
Cadogan PR Limited Tel: 020 7499 5002 /
(Financial PR) 07771 713608
------------------------- ---------------------
Alex Walters
------------------------- ---------------------
FinnCap (Broker) Tel: 020 7600 1658
------------------------- ---------------------
Tony Quirke/Mia Gardiner
(Sales/Broking)
------------------------- ---------------------
Chairman's statement
I am pleased to report that the Group has continued to establish
a stronger position in the markets in which it operates and improve
its overall financial performance to deliver increased revenues and
profits. This was achieved despite challenging worldwide market
conditions and in particular a weaker than expected performance
from our Australian subsidiary.
The UK based European business continues to improve. We
successfully launched newly designed lathes and ancillary products
under the widely recognised Colchester, Harrison and Pratt Burnerd
brands along with improvements in delivery times for existing
products.
In addition, we have implemented the worldwide distribution of
the Clausing branded machine tool range. The combination of the
Colchester, Harrison, Clausing and Pratt Burnerd brands, successful
in North America, is now available throughout our worldwide
distributor base. Don Haselton the President of 600 Group Inc. has
played a key role in this activity and will continue to work with
the UK team.
Our laser marking business has been transformed by the
acquisition of TYKMA in February this year, and already we are
seeing substantial improvements to its operating performance.
Electrox is now fully integrated into TYKMA and is run by David
Grimes. David has built up the TYKMA business which, when combined
with the UK business, now ranks it as a world leader in a very
fragmented industry.
We continue to seek and evaluate opportunities for further
strategic acquisitions, particularly in North America.
Strong Brands, distribution and exports
The 600 Group has developed several of the most widely
recognised and respected brands in the machine tool industry. These
brands along with accessories, spare parts and service provide a
well balanced platform that delivers exceptional revenue and profit
potential.
In the UK and Europe, our much improved financial position has
enabled our sales and engineering team to deliver machines and
spare parts from stock quickly. This improvement in customer
service has delivered welcome gains in its market share.
The North American business continues to be successful in
gaining market share and exceeding revenue goals by providing
exceptional customer service and support along with high quality
machine tools that cover the requirements of its target customers.
This model will provide the framework for the marketing and sales
platform that we hope will bring the North American success across
all 600 Group machine tool markets. North America also continues to
develop a line of US built products, including drills, milling
machines and saws. These products broaden the manufacturing base
and deliver the US built products desired by the domestic
market.
We will also expand our distribution network in South East Asia
in the coming year with particular emphasis on the Thailand,
Philippines and Malaysian markets. These markets are high growth
areas where the 600 Group machine tool and components names have a
high level of brand recognition. Early discussions with
distributors in these markets are very promising and we anticipate
incremental revenue growth in the next financial year.
The integration of TYKMA and Electrox has also opened up new
markets and distribution channels for both of these respected laser
marking brands and given the division worldwide credibility to
appeal to multi-national corporations.
Financial Overview
Revenue from continuing operations was GBP43.8m (2014: GBP41.7m)
a 5% increase on the previous year.
After taking account of interest, pensions, taxation special
items and share based payment charge, the Group profit for the
financial year was GBP2.35m (2014: GBP1.85m).
Underlying earnings (from continuing operations before special
items, share based payment charge, pensions interest and
shareholder loan amortisation) amounted to 2.09 pence per share
(2014: 1.90p) and total earnings were 2.66 pence per share
(2014:2.19 p).
At the end of the financial year, group net indebtedness stood
at GBP10.80m (2014: GBP5.31m), and gearing was 31% (2014:24%). The
group had financial headroom on existing borrowing facilities of
GBP4.2m and was in full compliance with all its financial
covenants.
Acquisitions
In August 2014 we acquired a 26.3% share of ProPhotonix Limited,
a company that designs and manufactures LED arrays and laser diode
modules in the UK and Ireland. It has a strong base of technology
and applications knowledge, applicable to high growth sectors
including niche industrial, security and medical markets.
In February 2015 we acquired an 80% controlling stake in TYKMA
Inc. a US based laser marking business run by David Grimes its
Chief Operating Officer. TYKMA is a specialist designer, producer
and distributor of laser marking systems which are used for
traceability, branding and component identification. Electrox, the
600 Group's laser marking company based in Letchworth has been
entirely integrated into TYKMA and the combined business is already
achieving significantly improved results.
Facilities
In June 2014 we acquired the freehold site in Colchester, UK
occupied previously under lease by our Gamet Bearings operation for
a consideration of GBP0.77m. In the US we are re-locating Clausing
to new purpose built leasehold premises in Kalamazoo, Michigan and
TYKMA, again to purpose built leasehold premises, in Chillicothe
Ohio. These new sites are better located with excellent road links
and significantly improved facilities. In the period we also agreed
the sale of our previous Head Office building in Leeds.
People
We have welcomed a number of new people to the Group at Board
and operational level during the year. Stephen Fiamma was appointed
as a Non- Executive Director in May 2015 and we welcome his
experience in cross-border acquisitions, divestitures and joint
ventures.
David Grimes the CEO of TYKMA is now leading our Laser marking
division and his experience in building one of the world's leading
companies in the sector will be of great benefit as we develop this
division even further. Lastly, following the resignation of Nigel
Rogers in April, I was delighted to assume the position of
Executive Chairman with responsibility for managing the operational
activities of the Group as well as pursuing our strategy for growth
and working with my fellow Board and executive team to achieve
this.
On behalf of the Board I would like to thank all our employees
for their ongoing support, commitment and dedication to The 600
Group which has been so important in the last year and I look
forward to working with them in the coming year.
Dividends
The Board continues to believe that the retention of earnings
for deployment in the business is the most appropriate use of
available financial resources. Accordingly they do not recommend
the payment of a dividend at the present time.
Outlook
The 600 Group has begun the process of leveraging our industry
recognised brands to expand our worldwide distribution network and
accelerate our revenue growth. In the coming year, we aim to
deliver additional organic revenue growth through market
development in conjunction with our distribution base throughout
Europe and Asia. We will also continue to evaluate acquisition
opportunities to identify the partners who will best compliment our
core competencies.
Paul Dupee
Chairman
30 June 2015
Results
Revenue
Revenue from continuing operations increased by 5% to GBP43.8m
(2014: GBP41.7m). Excluding the effects of the TYKMA acquisition,
revenue growth was 3% reflecting the difficult market conditions
experienced in our major markets in Europe, the USA and
particularly Australia.
Costs and margins
Gross margins were maintained at 33% and, with Group operating
expenses contained in line with the underlying sales growth, the
overall Group operating margin before special items was also
maintained at 5.6% (excluding special items).
Machine tools and precision engineered components
Group companies design and develop metal cutting machine tools
sold under the brand names Colchester and Harrison and design and
manufacture precision engineering components under the brand names
Pratt Burnerd and Gamet. These are sold worldwide, with direct
sales operations in North America ("Clausing"), Europe, and
Australia and a network of distributors in all other key end-user
markets. Clausing is a customer service led distribution business
and, in addition to branded Group products, carries a broad range
of other machine tools, spares and accessories to serve the North
American market. The Clausing branded machines have now started to
be distributed in Europe through our existing sales channels
The financial results of these activities, before special items,
were as follows:
2015 2014 Restated
GBP'000
GBP'000
Revenues 34,747 33,749
Operating profit 2,931 2,740
Operating margin 8.4% 8.1%
Revenues overall increased by 3% to GBP34.7m. Revenues in local
currency in our North American operations increased by 9% as this
business led by Don Haselton continues to win market share, and
profit margins increased to 8.2% (2014 7.9%).These results now
exclude the results of the Electrox spares and service operation
which was transferred to TYKMA on acquisition. Comparative figures
have been restated accordingly. The overall revenue increase was
held back by very challenging market conditions in Australia where
a fall of 6% in local currency was compounded by the weakness of
the Australian Dollar to give a 13.4% fall in Sterling terms. A
small trading loss was incurred and significant effort was put into
preserving cash. With its strong brands and wide product range, a
great deal of focus is now going into sales opportunities outside
Australia into South East Asia.
The European operation, headed up by Mike Berry, experienced
difficult market conditions, particularly in Europe, where the
weakness of the Euro has added to pricing pressure and consequently
revenue was 1% lower year on year. Good control of operating costs,
which was underlined by the business winning the EEF regional and
runner up in the National Business Efficiency Awards, led to
improved margins and operating profit increasing to 10.3% (2014
9.6%)
At a recent open house in the UK, the Group launched a number of
new machines including the Harrison Alpha 1400XC combination Lathe
and the Harrison EziTurn 330. Also under the Colchester brand, the
new Master VS and Triumph VS lathes were launched and have met with
significant success with distributors. In addition, for the first
time products which Clausing has successfully sold in the US were
introduced to the UK and Europe including variables speed drills
and precision manual surface grinders.
Laser marking
Following the acquisition of TYKMA Inc. in early February 2015,
the Electrox UK based laser marking business was entirely
integrated, including the sales, spares and service operations in
the USA, moving from their base within Clausing in Michigan to
TYKMA in Ohio. The segmental analysis includes the twelve months
trading for Electrox and the USA spares and service previously
within Clausing Machine tools, combined with the two months trading
from TYKMA. Comparative figures have been restated accordingly. The
Enlarged laser marking Division is now headed up by David Grimes.
The combined laser marking Division provides a wide range of
industrial marking and product identification systems to
manufacturing industries.
Results for the financial year before special items were as
follows:
2015 2014
Restated
GBP 000 GBP 000
Revenues 9,229 8,254
Operating profit 304 686
Operating Margin 3.3% 8.3%
Revenues increased by 12% as a result of the TYKMA acquisition
to GBP9.2m. Operating profit fell significantly in the second half
of the year as the performance of Electrox in the US deteriorated
and corrective action was delayed pending the completion of the
TYKMA acquisition. In addition development costs previously
capitalized were written off, adding a further GBP0.2m to operating
costs.
Looking forward, the year has started strongly and the
integration benefits are being realised. We are confident that this
division is now back on track and capable of sustained growth in
the coming year under the very experienced management team at
TYKMA.
Profit before taxation
Group profit before tax was GBP3.68m (2014 GBP2.48m) and the
underlying profit figure before special items and share based
payment costs and the pensions interest credit and amortization of
shareholder loan costs was GBP2.01m (2014 GBP1.97m).
Special items
During the financial year, the Group had a number of
transactions which in the opinion of the Director's should be
excluded for a better understanding of the underlying trading
performance of the Group.
A credit of GBP2.35m is included in operating profit as a result
of the work by the trustees of the UK pension scheme and the
company in reducing liabilities. A number of transactions including
a pension increase exchange took place during the year. This
resulted in an actuarial adjustment to the pension liabilities,
which was processed through the Consolidated Income Statement.
Costs incurred on the acquisition of TYKMA amounted to GBP0.3m
and redundancy and restructuring costs incurred on the integration
of the Electrox and TYKMA businesses were GBP0.4m.
The Group disposed of the previous UK head office in Leeds and
the Clausing machine tools site in Michigan during the period and
incurred a loss on valuation of the Colchester site. The total
property related special items were GBP0.4m. In addition share
option costs and amortization of intangible assets acquired which
are non-cash costs to the Group have been included in special
items.
Taxation
The current year charge for taxation amounted to GBP1.33m (2014
GBP0.62m). The majority of this charge relates to deferred taxation
provided on the pension credit of GBP2.35m and interest on pension
surplus of GBP0.86m which is at a rate of 35%, being the rate
applicable to any refund from a pension scheme. The UK businesses
continue to benefit from the substantial previous tax losses and no
taxation is payable in the UK. The US businesses are subject to
taxation on their profits at a rate of 34%.
Net profit and earnings per share
The total profit attributable to equity holders of the parent
for the current financial year amounted to GBP2.33m (2014:
GBP1.85m). The non- controlling interest represents 20% of the
after tax profits of the TYKMA business.
Underlying earnings from continuing operations before pension
and equity adjustments, special items and share based payment
charge and related taxation was 2.09p per share (2014: 1.90p) and
basic earnings per share was 2.66p (2014 2.19p)
Financial position and utilisation of resources
Cash flow
Cash generated from operations before working capital movements
was GBP3.02m (2014: GBP2.71m). The working capital movement
included an increase in inventories as a result of shipments into
the USA caught up in the backlog from the East Coast dock strike
and improved machine availability being offered by the European
business to meet customer requirements. A large multiple machine
sale to an educational establishment just before the period end
increased receivables within the European Lathe business.
Taxation paid related entirely to the Clausing business in the
USA.
Proceeds from the sale of the previous Head Office in Leeds and
the Clausing facility in Kalamazoo contributed GBP0.46m to cash
with the acquisition of the Colchester Gamet Bearings site at
GBP0.72m being the major item of capital expenditure.
The investment in ProPhotonix was entirely funded by the issue
of new shares and the investment and associated costs in relation
to the purchase of 80% of TYKMA Inc. was funded by the issue of new
loan notes.
Net borrowings
Group net debt at 28 March 2015 stood at GBP10.80m (2014:
GBP5.31m) comprising net bank and finance lease indebtedness of
GBP4.02m (2014: GBP3.02m) and the amount outstanding on the new
loan notes of GBP6.78m (2014 shareholder loans of GBP2.29m). The
amount outstanding is net of unamortised costs of GBP0.7m in the
current financial year (2014 GBP0.21m).
New facilities were agreed with Santander in the UK in May 2014
and with Bank of America in April 2015. The Group has a mixture of
term loans and revolving facilities with maturities between 2 and 6
years in addition to annual credit and tradeline facilities.
Headroom on bank facilities was GBP4.2m at the year-end (2014:
GBP2.72m) and all financial covenants were met in full.
During February and March 2015 the Group issued GBP7.69m of New
8% Loan Notes with a maturity of February 2020 under an GBP8.5m
Loan Note programme. These Loan Notes, following shareholder
approval in March 2015, also entitled holders to warrants of equal
value to subscribe for new ordinary shares at 20p.
Gearing amounted to 31% of aggregate net assets (2014: 24%)
Going concern
In accordance with FRC guidelines, the Board has assessed the
Group's funding and liquidity position. The Directors confirm that,
after having made appropriate enquiries, they have a reasonable
expectation that the Group and the Company have adequate resources
to continue operations for the foreseeable future. Accordingly, the
directors continue to adopt the going concern basis in preparation
of the financial statements.
Retirement Benefits
The accounting surplus at 28 March, 2015 was GBP34.29m (2014:
GBP19.02m). This surplus has been calculated in accordance with the
scheme rules and recognized accounting requirements.
As a result of liability reduction exercises undertaken by the
UK scheme's Trustees in conjunction with the company, including
pension increase Exchanges, a credit has been taken in the period
in the Income Statement of GBP2.35m to reflect the actuarial
reduction in Scheme liabilities.
In accordance with the current legislation on taxation of
pension surplus returns to a company, deferred taxation has been
provided for on the pension entries at 35% as opposed to the normal
20% rate.
In October 2013 the Company reached agreement with the Trustee
of the scheme regarding the funding position on a more prudent
Technical Provisions basis as at 31 March 2013, which indicated a
funding deficit of GBP25.4m at that date, and estimated a deficit
on a full buy-out basis of GBP51.1m.
It was further agreed that the Technical Provisions deficit
would be resolved by an outperformance of the investment returns on
the scheme assets of 1% above the return on UK gilts, and that no
cash contributions would be required until at least the next
funding valuation due as at 31 March 2016.
At 28 March 2015, the subsequent performance of the scheme
assets and changes in the underlying market conditions in respect
of the fund liabilities, indicate that the deficit on a Technical
Provisions basis had reduced to GBP9.5m. The performance has
continued to improve since that time and in mid May 2015 the
deficit was GBP5.9m. On a full buy-out basis the deficit had
reduced to GBP31m by the end of March 2015.
The directors and the Trustees work together on a collaborative
basis to continue to monitor investment performance and market
conditions closely, to mitigate the risk of mis-matching assets and
liabilities to a tactically appropriate level, and to pursue
opportunities to secure a full or partial buy-out of UK pension
liabilities when conditions permit.
The US retiree health scheme and pension fund deficits increased
slightly during the year due to changes in actuarial assumptions to
GBP1.10.m (2014: GBP0.91m.)
Property Transactions and Revaluations
The Group disposed of the former Head Office in Leeds and the
Clausing business sold its existing facility in Michigan during the
period. Net proceeds were GBP0.46m and the loss on sale was
GBP0.1m.
In addition, as required by the accounting rules for revaluing
assets, the remaining freehold properties in the Group were
revalued as at 28 March 2015. This has resulted in a reduction of
GBP0.3m on the UK Colchester site, which is taken through the
income statement and an increase of GBP0.6m on the UK Letchworth
site, which is taken directly to revaluation reserve.
Share Capital and Reserves
Following approval by Shareholder at the AGM in September 2014
an application to reduce the deferred shares, share premium and
capital redemption reserve were processed through the High Court
and GBP34.2m of capital was released to accumulated reserves,
Neil Carrick
Finance Director
30 June 2015
Consolidated Income Statement 52 weeks 52 weeks
For the 52 weeks ended 28 March
2015
ended ended
28 March 29 March
2015 2014
GBP000 GBP000
-------------------------------------- -------- -------------------
Continuing
Revenue 43,794 41,707
Cost of sales (29,374) (27,850)
--------------------------------------- -------- -------------------
Gross profit 14,420 13,857
Other operating income 42 134
Net operating expenses (11,998) (11,643)
Pensions credit 2,347 _
Acquisition costs (335) _
Share option costs (131) (57)
Other special items (896) (128)
Amortisation of intangible assets (27) _
acquired
-------- -------------------
Total Net operating expenses (11,040) (11,828)
Operating profit 3,422 2,163
Bank and other interest 2 7
Interest on pension surplus 857 827
-------- -------------------
Financial income 859 834
Bank and other interest (451) (388)
Amortisation of shareholder
loan expenses (155) (134)
-------- -------------------
Financial expense (606) (522)
Profit before tax 3,675 2,475
Income tax charge (1,325) (623)
--------------------------------------- -------- -------------------
Profit for the period from continuing
operations 2,350 1,852
Attributable to equity holders
of the parent 2,333 1,852
Attributable to non controlling 17 _
interests
-------------------------------------- -------- -------------------
2,350 1,852
-------------------------------------- -------- -------------------
Basic earnings per share 2.66p 2.19p
Diluted earnings per share 2.58p 2.15p
52-week 52-week
period period
ended ended
Consolidated statement of comprehensive 28 March 29 March
income
for the 52-week period ended 28 March
2015
2015 2014
GBP000 GBP000
------------------------------------------- --------- ---------
Profit for the period 2,350 1,852
Other comprehensive income/(expense)
Items that will not be reclassified
to the Income Statement:
Remeasurement of the net defined benefit
assets - (229)
Impact of changes to defined benefit
asset limit 12,188 -
Deferred taxation (4,296) 139
-------------------------------------------- --------- ---------
Total items that will not be reclassified
to the Income Statement: 7,892 (90)
-------------------------------------------- --------- ---------
Items that are or may in the future
be reclassified to the Income Statement:
Foreign exchange translation differences (13) 2
Total items that are or may in the
future be reclassified to the Income
Statement: (13) 2
-------------------------------------------- --------- ---------
Other comprehensive income/(expense)
for the period, net of income tax 7,879 (88)
Total comprehensive income for the
period 10,229 1,764
-------------------------------------------- --------- ---------
Attributable to:
Equity holders of the Parent Company 10,212 1,764
Non controlling interests 17 -
Total recognised income 10,229 1,764
-------------------------------------------- --------- ---------
Consolidated statement of financial As at As at
position any Number 00196730
As at 28 March 2015
28 March 29 March
2015 2014
GBP000 GBP000
------------------------------------ -------- --------------------
Non-current assets
Property, plant and equipment 5,159 4,348
Goodwill 7,144 -
Other Intangible assets 2,347 1,780
Investments 525 -
Deferred tax assets 3,022 2,723
Employee benefits 34,292 19,019
52,489 27,870
------------------------------------ -------- --------------------
Current assets
Inventories 11,036 8,505
Trade and other receivables 7,070 6,209
Cash and cash equivalents 902 1,149
------------------------------------- -------- --------------------
19,008 15,863
------------------------------------ -------- --------------------
Total assets 71,497 43,733
------------------------------------- -------- --------------------
Non-current liabilities
Loans and other borrowings (8,405) (2,475)
Trade and other payables (4,175) -
Deferred tax liabilities (13,358) (7,737)
------------------------------------- -------- --------------------
(25,938) (10,212)
------------------------------------ -------- --------------------
Current liabilities
Trade and other payables (6,792) (6,425)
Income tax payable (135) (140)
Provisions (611) (429)
Loans and other borrowings (3,295) (3,982)
(10,833) (10,976)
------------------------------------ -------- --------------------
Total liabilities (36,771) (21,188)
------------------------------------- -------- --------------------
Net assets 34,726 22,545
------------------------------------- -------- --------------------
Shareholders' equity
Called-up share capital 896 14,581
Share premium account - 16,885
Revaluation reserve 1,494 862
Capital redemption reserve - 2,500
Equity reserve 124 180
Translation reserve 806 938
Retained earnings 31,270 (13,401)
------------------------------------- -------- --------------------
34,590 22,545
------------------------------------ -------- --------------------
Non-controlling interests 136 -
------------------------------------- -------- --------------------
Total equity 34,726 22,545
------------------------------------- -------- --------------------
Consolidated statement of changes in equity
As at 28 March 2015
Ordinary Share Capital
Ordinary Share Capital Non
share premium Revaluation redemption Translation Equity Retained Controlling Total
capital account reserve reserve([1]) reserve reserve Earnings Total Interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
At 30 March 2013 14,579 16,858 909 2,500 1,860 173 (15,222) 21,657 - 21,657
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
At 31 March 2013 14,579 16,858 909 2,500 1,860 173 (15,222) 21,657 - 21,657
Profit for the
period
(restated) - - - - - - 1,852 1,852 - 1,852
Other
comprehensive
income:
Foreign currency
translation - - (90) - (922) - 2 (1,010) - (1,010)
Net defined
benefit asset
movement - - - - - - (229) (229) - (229)
Revaluation of
properties - - 43 - - - - 43 - 43
Deferred tax - - - - - - 139 139 - 139
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
Total
comprehensive
income - - (47) - (922) - 1,764 795 - 795
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
Transactions
with owners:
Share capital
subscribed for 2 27 - - - - - 29 - 29
Shareholder loan
issue - - - - - 7 - 7 - 7
Credit for
share-based
payments - - - - - - 57 57 - 57
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
Total
transactions
with owners 2 27 - - - 7 57 93 - 93
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
At 29 March 2014 14,581 16,885 862 2,500 938 180 (13,401) 22,545 - 22,545
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
At 30 March 2014 14,581 16,885 862 2,500 938 180 (13,401) 22,545 - 22,545
Profit for the
period - - - - - - 2,333 2,333 17 2,350
Other
comprehensive
income:
Foreign currency
translation - - (24) - 490 - (13) 453 - 453
Net defined
benefit asset
movement - - - - - - 12,188 12,188 - 12,188
Fair value
revaluation of
Investments - - - - (622) - - (622) - (622)
Revaluation of
properties - - 656 - - - - 656 - 656
Deferred tax - - - - - - (4,296) (4,296) - (4,296)
Total
comprehensive
income - - 632 - (132) - 10,212 10,712 17 10,729
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
Transactions
with owners:
Share capital
subscribed for 51 1,094 - - - - - 1,145 - 1,145
Cancellation of
deferred shares,
share premium
and capital (13,736) (17,979) - (2,500) - - 34,215 - - -
redemption
reserve
Shareholder loan
issue - - - - - (56) 104 48 - 48
Credit for
share-based
payments - - - - - - 131 131 - 131
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
Total
transactions
with owners (13,685) (16,885) - (2,500) - (56) 34,450 1,324 - 1,324
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
Non controlling
interest - - - - - - - - 119 119
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
At 28 March 2015 896 - 1,494 - 806 124 31,261 34,581 136 34,717
---------------- -------- -------- ----------- ------------ ----------- ------- -------- ------- ----------- -------
(1) The capital redemption reserve was set up on cancellation
and repayment of cumulative preference shares in 2001.
Consolidated cash flow statement
For the 52-week period ended 28
March 2015
52-week 52-week
period period
ended ended
28 March 29 March
2015 2014
GBP000 GBP000
----------------------------------------- -------- --------
Cash flows from operating activities
Profit for the period 2,350 1,852
Adjustments for:
Amortisation of development expenditure 133 28
Depreciation 450 467
Net financial income (253) (312)
Net pension credit (2,347) -
Other Special Items 1,231 -
Equity share option expense 131 57
Income tax expense 1,325 623
------------------------------------------ -------- --------
Operating cash flow before changes
in working capital and provisions 3,020 2,715
Decrease/(increase) in trade and
other receivables 203 (255)
(Increase)/decrease in inventories (1,051) 1,143
Decrease in trade and other payables (1,626) (1,243)
Restructuring and redundancy expenditure (170) (371)
Cash generated/(used) in operations 376 1,989
Interest paid (414) (290)
Income tax paid (205) (496)
------------------------------------------ -------- --------
Net cash flows from operating activities (243) 1,203
Cash flows from investing activities
Interest received 2 7
Proceeds from sale of property,
plant and equipment 460 42
Purchase of Tykma (3,802) -
Investment in Prophotonics (1,147) -
Purchase of property, plant and
equipment (944) (545)
Development expenditure capitalised (299) (511)
Refinancing expenditure (487) -
Net cash flows from investing activities (6,217) (1,007)
------------------------------------------ -------- --------
Cash flows from financing activities
Proceeds from issue of ordinary
shares 1,145 29
Proceeds from issue of Loan Notes 7,694 -
Net Repayment of external borrowing (2,505) (72)
Net Finance lease (expenditure)/income (107) 58
------------------------------------------ -------- --------
Net cash flows from financing activities 6,227 15
------------------------------------------ -------- --------
Net (decrease)/increase in cash
and cash equivalents (233) 211
Cash and cash equivalents at the
beginning of the period 1,149 1,025
Effect of exchange rate fluctuations
on cash held (14) (87)
------------------------------------------ -------- --------
Cash and cash equivalents at the
end of the period 902 1,149
------------------------------------------ -------- --------
Notes relating to the Group financial statments
Basis of preparation
The Group financial statements have been prepared and approved
by the Directors in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU and with those
parts of the Companies Act 2006 applicable to companies reporting
under adopted IFRS.
IFRS and IFRIC are issued by the International Accounting
Standards Board (the IASB) and must be adopted into European Union
law, referred to as endorsement, before they become mandatory under
the IAS Regulation.
1. Segment information
IFRS 8 - "Operating Segments" requires operating segments to be
identified on the basis of internal reporting about components of
the Group that are regularly reviewed by the chief operating
decision maker to allocate resources to the segments and to assess
their performance.
The chief operating decision maker has been identified as the
Executive Directors. The Executive Directors review the Group's
internal reporting in order to assess performance and allocate
resources.
The Executive Directors consider there to be two continuing
operating segments being Machine Tools and Precision Engineered
Components and Laser Marking .
The executive directors assess the performance of the operating
segments based on a measure of operating profit/(loss). This
measurement basis excludes the effects of Special Items from the
operating segments. Head Office and unallocated represent central
functions and costs.
Continuing
52 Weeks ended 28 March Machine
2015 Tools
& Precision Head
Engineered Laser Office Total
Components Marking & unallocated continuing
Segmental analysis of
revenue GBP000 GBP000 GBP000 GBP000
------------------------------- ------------ -------- -------------- -----------
Revenue from external
customers 34,747 9,047 - 43,794
Inter-segment revenue - 182 - 182
------------------------------- ------------ -------- -------------- -----------
Total segment revenue 34,747 9,229 - 43,976
Less: inter-segment revenue - (182) - (182)
------------------------------- ------------ -------- -------------- -----------
Total revenue 34,747 9,047 - 43,794
------------------------------- ------------ -------- -------------- -----------
Segmental analysis of
operating Profit/(loss)
before Special Items 2,931 304 (771) 2,464
------------------------------- ------------ -------- -------------- -----------
Special Items 1,965 (772) (235) 958
------------------------------- ------------ -------- -------------- -----------
Group profit from operations 4,896 (468) (1,006) 3,422
------------------------------- ------------ -------- -------------- -----------
Other segmental information:
Reportable segment assets 29,443 6,622 35,432 71,497
Reportable segment liabilities (19,614) (2,619) (14,538) (36,771)
Fixed asset additions 919 353 - 1,272
Depreciation and amortisation 305 278 - 583
52-weeks ended 29 March Machine
2014 (restated) Tools
& Precision Head
Engineered Laser Office
Components Marking & unallocated Total
Segmental analysis of
revenue GBP000 GBP000 GBP000 GBP000
------------------------------- ------------ -------- -------------- --------------------
Revenue from external
customers 33,749 7,958 - 41,707
Inter-segment revenue - 296 - 296
------------------------------- ------------ -------- -------------- --------------------
Total segment revenue 33,749 8,254 - 42,003
Less: inter-segment revenue - (296) - (296)
------------------------------- ------------ -------- -------------- --------------------
Total revenue 33,749 7,958 - 41,707
------------------------------- ------------ -------- -------------- --------------------
Segmental analysis of
operating Profit/(loss)
before special Items 2,740 686 (1,078) 2,348
------------------------------- ------------ -------- -------------- --------------------
Special Items - - (185) (185)
Group (Loss)/profit from
operations 2,740 686 (1,263) 2,163
------------------------------- ------------ -------- -------------- --------------------
Other segmental information:
Reportable segment assets 37,454 6,153 126 43,733
Reportable segment liabilities (13,007) (1,522) (6,659) (21,188)
Fixed asset additions 412 643 - 1,055
Depreciation and amortisation 308 159 28 495
The comparative figures have been restated to reflect the move
of the laser marking spares and service activity from within
Clausing Machine Tools to TYKMA in the current year.
Inter-segment pricing is determined on an arm's length basis.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
Segment capital expenditure is the total cost incurred during
the period to acquire segment assets that are expected to be used
for more than one period.
Geographical segmental analysis of revenue is shown by origin
and destination in the following two tables:
Segmental analysis by origin 2015 2014
------------- ----------------------
GBP000 % GBP000 %
----------------------------- ------ ----- --------------- -----
Gross sales revenue:
----------------------------- ------ ----- --------------- -----
UK 20,806 47.5 20,803 49.9
North America 21,083 48.1 18,703 44.8
Australasia 1,905 4.4 2,201 5.3
Total Revenue 43,794 100.0 41,707 100.0
----------------------------- ------ ----- --------------- -----
1. Segment information (CONTINUED)
Segmental analysis by destination:
2015 2014
------------- -------------
GBP000 % GBP000 %
--------------------- ------ ----- ------ -----
Gross sales revenue:
--------------------- ------ ----- ------ -----
UK 8,043 18.4 8,223 19.7
Other European 7,045 16.1 6,486 15.6
North America 24,087 55.0 22,360 53.6
Africa 187 0.4 315 0.8
Australasia 1,709 3.9 2,057 4.9
Central America 148 0.3 112 0.3
Middle East 893 2.1 914 2.2
Far East 1,682 3.8 1,240 2.9
--------------------- ------ ----- ------ -----
43,794 100.0 41,707 100.0
--------------------- ------ ----- ------ -----
There are no customers that represent 10% or more of the Group's
revenues.
2. SPECIAL ITEMS, ACQUISITION COSTS And Share based payment
charges
In order for users of the financial statements to better
understand the underlying performance of the Group the Board have
separately disclosed transactions which by virtue of their size or
incidence, are considered to be one off in nature. In addition the
charge for share based payments and amortization of intangible
assets acquired have also been separately identified.
Special items include acquisition costs, abortive transaction
costs, gains and losses on the sale of properties and assets,
exceptional costs relating to reorganisation, redundancy and
restructuring, legal disputes and inventory,asset and intangibles
impairments.
2015 2014
GBP000 GBP000
------------------------------------------- ------- ------
Operating costs
Abortive transaction costs - 128
Inventory write downs 268 -
Reorganisation and restructuring costs 157 -
Property disposals 193 -
Property write-downs 278 -
Other Special Items 896 128
------------------------------------------- ------- ------
Pensions credit (2,347) -
------------------------------------------- ------- ------
Acquisition costs 335 -
------------------------------------------- ------- ------
Share option costs 131 57
------------------------------------------- ------- ------
Amortisation of intangible assets acquired 27 -
------------------------------------------- ------- ------
During the year the Group incurred costs with regard to the
acquisition of TYKMA Inc. Property disposals in both the UK and US
and the revaluation of properties led to losses. Reorganisation and
restructuring costs were principally related to the integration of
TYKMA Inc and the Electrox Laser marking division.
The pension credit relates to liability reduction exercises
undertaken by the trustees of the main scheme including pensions
increase exchange.
During the prior year the Group incurred costs with regard to
the abortive acquisition of the Group by Qinddao D&D Investment
Group Co. Ltd. Costs were also incurred with regard to the granting
of share options.
3. Financial income and expense
2015 2014
GBP000 GBP000
------------------------------------------ ------ ------
Interest income 2 7
Interest on pensions surplus 857 827
------------------------------------------ ------ ------
Financial income 859 834
------------------------------------------ ------ ------
Bank overdraft and loan interest (174) (169)
Shareholder loan interest (238) (200)
Other loan interest (22) -
Other finance charges - (1)
Finance charges on finance leases (17) (18)
Amortisation of shareholder loan expenses (155) (134)
Financial expense (606) (522)
------------------------------------------ ------ ------
4. Taxation
2015 2014
GBP000 GBP000
----------------------------------------- ------- ------
Current tax:
Corporation tax at 21% (2014: 23%):
- current period - -
Overseas taxation:
- current period (339) (62)
----------------------------------------- ------- ------
Total current tax charge (339) (62)
----------------------------------------- ------- ------
Deferred taxation:
- current period (1,060) (400)
- prior period 74 (161)
----------------------------------------- ------- ------
Total deferred taxation charge (Note 13) (986) (561)
----------------------------------------- ------- ------
Taxation charged to the income statement (1,325) (623)
----------------------------------------- ------- ------
Tax reconciliation
The tax charge assessed for the period is higher than the
standard rate of corporation tax in the UK of 21% (2014: 23%). The
differences are explained below:
2015 2014
------------- --------------
GBP000 % GBP000 %
------------------------------------- ------ ----- ------ ------
Profit before tax 3,675 2,475
------------------------------------- ------ ----- ------ ------
Profit before tax multiplied
by the standard rate of corporation
tax
in the UK of 21% (2014: 23%) 772 21.0 569 23.0
Effects of:
- expenses not deductible 252 6.9 152 6.1
- overseas tax rates 114 3.1 48 1.9
- pension fund surplus taxed
at higher rate 454 12.3 100 4.0
- property disposals - - - -
- deferred tax prior period
adjustment (74) (2.0) 161 6.5
- (unrecognised losses utilised)/tax
not recognised on losses (193) (5.2) (520) (21.0)
- impact of rate change - - 113 4.6
------------------------------------- ------ ----- ------ ------
Taxation charged to the income
statement 1,325 36.1 623 25.2
------------------------------------- ------ ----- ------ ------
5. Earnings per share
The calculation of the basic earnings per share of 2.66p (2014:
2.19p) is based on the earnings for the financial period
attributable to the Parent Company's shareholders of a profit of
GBP2,383,000 (2014: GBP1,852,000) and on the weighted average
number of shares in issue during the period of 87,771,514 (2014:
84,430,346). At 28 March 2015, there were 9,900,000 (2014:
4,500,000) potentially dilutive shares on option with a weighted
average effect of 2,783,270 (2014: 1,553,045) shares giving a
diluted profit per share of 2.58p (2014: 2.15p)
2015 2014
----------------------------------------- ---------- -----------
Weighted average number of shares
Issued shares at start of period 84,430,346 84,256,091
Effect of shares issued in the year 3,341,168 174,255
----------------------------------------- ---------- -----------
Weighted average number of shares at end
of period 87,771,514 84,430,346
----------------------------------------- ---------- -----------
GBP000 GBP000
------------------------------------------- ----------------
Total post tax earnings 2,350 1,852
Share Option Costs 131 57
Pensions Interest (857) (827)
Amortisation of Shareholder loan expenses 155 134
Pensions credit (2,347) -
Amortisation of intangible assets acquired 27 -
Property sales and revaluation 462 -
Other special items 434 128
Acquisition costs 335 -
Associated Taxation 1,159 258
Underlying Earnings before tax 2,015 1,967
-------------------------------------------- ------- -----
Underlying Earnings after tax 1,849 1,602
-------------------------------------------- ------- -----
Underlying EPS 2.09p 1.90p
6. Cash and cash equivalents
2015 2014
GBP000 GBP000
------------------------------------------------ ------ ------
Cash at bank 802 1,049
Short-term deposits 100 100
------------------------------------------------ ------ ------
Cash and cash equivalents per statement of
financial position and per cash flow statement 902 1,149
------------------------------------------------ ------ ------
7. RECONCILIATION OF NET CASH FLOW TO NET DEBT
2015 2014
GBP000 GBP000
-------------------------------------- -------- -------
Increase in cash and cash equivalents (233) 211
Decrease in debt and finance leases (5,200) 14
-------------------------------------- -------- -------
Decrease in net debt from cash flows (5,433) 225
Net debt at beginning of period (5,308) (5,407)
Shareholder loan deferred costs 701 (126)
Cash and debt through acquisitions (697) -
Exchange effects on net funds (61) -
-------------------------------------- -------- -------
Net debt at end of period (10,798) (5,308)
-------------------------------------- -------- -------
8. Analysis of net DEBT
At At
30 March Exchange 28 March
2014 movement Other Cash 2015
flows
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------- -------- -------- ------ ------- --------
Cash at bank and in hand 1,049 (14) - (233) 802
Term deposits (included within
cash and cash equivalents on
the balance sheet) 100 - - - 100
1,149 (14) - (233) 902
Debt due within one year (3,881) (54) (697) 1,426 (3,206)
Debt due after one year - - - (1,539) (1,539)
Loan notes due after one year - - 912 (7,695) (6,783)
Shareholder loan (2,289) - (211) 2,500 -
Finance leases (287) 7 - 108 (172)
Total (5,308) (61) 4 (5,433) (10,798)
------------------------------- -------- -------- ------ ------- --------
9. ACQUISITION
On 13 February 2015 the Group acquired 80%of the issued share
capital of TYKMA Inc., a US laser marking company. The provisional
net assets at the date of acquisition were as follows:
GBP000
----------------------------------------------- ------
Fair value of assets and liabilities acquired:
Intangible assets - Development costs 114
Plant and equipment 514
Inventories 610
Trade and other receivables 364
Cash and cash equivalents 218
Trade and other payables (534)
Current tax liabilities (19)
Deferred tax liabilities (140)
Loans and other borrowings (660)
----------------------------------------------- ------
Net Assets 467
Intangible assets identified 207
Fair value provisions identified (479)
Goodwill 7,144
----------------------------------------------- ------
Total Consideration 7,339
----------------------------------------------- ------
10 Statutory accounts
The Financial information set out in this preliminary
announcement does not constitute the company's Consolidated
Financial Statements for the financial years ended 28 March 2015 or
29 March 2014 but are derived from those Financial Statements.
Statutory Financial Statements for 2014 have been delivered to the
Registrar of Companies and those for 2015 will be delivered
following the company's AGM. The Auditors KPMG LLP have reported on
those financial statements. Their reports were unqualified, did not
draw attention to any matters by way of emphasis without qualifying
their report and did not contain statements under Section 498(2) or
(3) of the Companies Act 2006 in respect of the Financial
Statements for 2015 or 2014.
The Statutory accounts are available on the Company's web site
and will be posted to shareholders who have requested a copy and
thereafter by request to the company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BUGDLUSXBGUG
600 (LSE:SIXH)
Historical Stock Chart
From Apr 2024 to May 2024
600 (LSE:SIXH)
Historical Stock Chart
From May 2023 to May 2024