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ASY Andrews Sykes Group Plc

587.50
0.00 (0.00%)
Last Updated: 08:00:25
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Andrews Sykes Group Plc LSE:ASY London Ordinary Share GB0002684552 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 587.50 570.00 605.00 587.50 587.50 587.50 3,008 08:00:25
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Air Heat & Condition Eq-whsl 83.01M 17.02M 0.4066 14.45 245.92M

Andrews Sykes Group PLC Half Yearly Report (0582P)

27/09/2013 7:01am

UK Regulatory


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TIDMASY

RNS Number : 0582P

Andrews Sykes Group PLC

27 September 2013

Andrews Sykes Group plc

Interim financial statements 2013

Summary of results

for the six months ended 30 June 2013

 
                                                       (Unaudited) 
                                              6 months ended        6 months 
                                                30 June 2013           ended 
                                                               30 June 2012* 
                                                      GBP000          GBP000 
 
Revenue from continuing operations                    29,774          28,570 
EBITDA** from continuing operations                    8,383           8,235 
Operating profit                                       6,427           6,396 
Profit for the financial period                        5,208           4,894 
Basic earnings per share (pence)                      12.32p          11.57p 
Dividends declared per equity share (pence)            8.90p           0.00p 
Net funds                                             20,674          12,642 
 
 
 
   *       Restated following the implementation of IAS 19 (revised), see note 2. 

** Earnings before interest, taxation, depreciation, profit on the sale of property, plant and equipment, amortisation and non-recurring items.

For further information please contact:

 
 Andrews Sykes Group plc 
  Kevin Ford                      +44 (0) 1902 328700 
 
 Altium (Nominated adviser) 
  Paul Lines                    +44 (0) 845 505 
  Adam Sivner                    4343 
 
 Arden Partners plc (Broker)    +44 (0) 20 7614 
  Adrian Trimmings               5920 
 

Chairman's statement

Overview

The group's revenue for the six months ended 30 June 2013 was GBP29.8 million, an increase of GBP1.2 million (4.2%) compared with last half year's figure of GBP28.6 million. Operating profit increased very slightly to GBP6.4 million for the period under review, the positive impact from the increase in revenue being largely offset by a combination of a change in mix across our business sectors and start-up costs. However, the first half of 2012 benefited from a significant one-off contract for the supply of equipment in connection with the Olympic Games. The group continues to demonstrate its ability to return a satisfactory result, achieving an operating profit this period at approximately the same level as last in the face of both unfavourable weather and economic trading conditions.

The group continues to generate strong cash flows, net cash inflow from operating activities being GBP6.0 million in the six months ended 30 June 2013 compared with GBP4.6 million in the same period in 2012. As at 30 June 2013 the group had net funds of GBP20.7 million, an increase of GBP5.1 million compared with 31 December 2012 and an increase of over GBP8.0 million compared with the position as at 30 June 2012. Taking all these factors into account, on 18 June 2013 the Board declared an interim dividend of 8.9 pence per ordinary share which resulted in a payment to shareholders of GBP3.8 million on 24 July 2013.

Management continue to be mindful of the need to maintain the operational structure of the business and the group has invested GBP2.5 million on new hire fleet assets, plant and equipment in the six months under review. In addition we have continued our policy of pursuing organic growth within our market sectors and the associated overhead start-up costs have been expensed as incurred. Continuing investment in both our existing businesses and the ongoing development of new operations and income streams will ensure that we remain in a strong position and will safeguard profitability into the future.

Operations review

Our main hire and sales business in the UK again faced a number of challenges and opportunities during the first half of 2013. The improvements in the pumping business reported in last year's annual report continued into the current period and made a significant contribution to the results for the first half year. Non-weather dependent contracts continue to be sought and investment will continue to be made into this core business. Our heating division also performed well with revenue being slightly ahead of last year mainly due to the colder weather at the beginning of the year continuing longer this period than last. However, the early summer weather was very poor and conditions remained un-seasonably cold until the middle of June when the warmer weather finally arrived. Overall the operating profit of our main UK business was approximately GBP0.1 million better than the first half last year.

Our subsidiary in the Netherlands had a difficult first half of the year also being adversely affected by the late arrival of the warmer summer weather in the middle of June; this had an almost direct impact on operating profit which ended GBP0.4 million lower than the same period in 2012. Our Belgian subsidiary continued to trade successfully.

In June 2011 we opened a new operation in Italy, Nolo Climat, and following additional investment in both staff and hire fleet in the first half of 2013, we remain optimistic for further growth in this business in the future.

In December 2012 we opened a new subsidiary in France that commenced trading in January 2013. We are also currently establishing another new subsidiary in the French-speaking region of Switzerland to become fully operational by the end of 2013.

Our UK air conditioning installation business benefited last year from the one-off contract for the supply of equipment for the Olympic Games. This year, despite the poor start to the season and lacking the Olympics contract, we have produced a result very close to last year's.

Khansaheb Sykes, our long established business based in the UAE, continued to benefit from improved market conditions in the region. Both of its main trading locations in Dubai and Abu Dhabi produced strong results in the first half of the year from its traditional dewatering, sewage and general pump hire activities. Overall revenue and operating profit increased in the first half of 2013 compared with the same period in 2012.

Profit for the financial period and earnings per share

Profit before tax was very slightly ahead of the first half of 2012 at GBP6.7 million.

The tax charge reduced by GBP0.3 million from GBP1.8 million* last half year to GBP1.5 million in the six months ended 30 June 2013. The group's effective tax rate fell from 26.3% to 22.0% mainly due to (i) a 1.25% reduction in the UK annualised corporation tax rate to 23.25% and (ii) an increase in the proportion of profits earned in lower tax rate overseas countries in the first half of 2013. A reconciliation of the theoretical corporation tax charge based on the accounts profits multiplied by 23.25% and the actual tax charge is given in note 4 of these interim accounts.

The profit for the financial period increased by GBP0.3 million from GBP4.9 million* in the first half of 2012 to GBP5.2 million in the current period. Basic earnings per share increased by 6.5% from 11.57 pence* to 12.32 pence reflecting both the above increase in profit and the group's share buyback programme in earlier years. No shares have been purchased for cancellation in the current half year.

Dividends

On 18 June 2013 the Board declared an interim dividend of GBP3.8 million, equal to 8.9 pence per ordinary share, and this was paid to shareholders on the register as at 28 June 2013 on 24 July 2013. This interim dividend has been charged against reserves during the six months ended 30 June 2013 and included on the balance sheet as a current liability as at 30 June 2013.

The Board continues to adopt the policy of returning value to shareholders whenever possible and accordingly the decision regarding a further interim dividend will be taken later in the year in the light of profitability and cash resources.

Renewal of bank loan facilities

As advised in the 2012 Annual Report and Financial Statements, a new bank loan of GBP8 million was taken out on 30 April 2013 which was used to finance the repayment of the previous loan on the same day. The group is currently in compliance with the loan covenants and forecasts indicate that this will continue to be the case for the foreseeable future. Accordingly the loan has been split between current and non-current liabilities in accordance with the agreed repayment profile.

Outlook

Trading in the third quarter to date has been encouraging. During July and August the UK and Northern Europe saw sustained periods of warm weather conditions which benefited our air conditioning business. Both the UK pumping business and the Middle East business sector have continued to trade ahead of last year and these factors will therefore have a positive impact on the results for the second half of 2013.

However, it must be remembered that the results for 2012 had a one-off benefit of a significant contract in connection with the Olympic and Paralympic Games and therefore this will distort any comparison with 2013. In addition the weather for the final quarter of 2013 is currently an unknown factor. Overall, however, the Board is cautiously anticipating a reasonable performance for the remainder of 2013.

 
 JG Murray 
  Chairman 
             26 September 2013 
 

* Restated due to the implementation of IAS 19 (revised), see note 2.

Consolidated income statement

for the 6 months ended 30 June 2013 (unaudited)

 
                                        6 months  6 months     12 months 
                                           ended     ended         ended 
                                         30 June   30 June   31 December 
                                            2013     2012*         2012* 
Continuing operations                     GBP000    GBP000        GBP000 
 
Revenue                                   29,774    28,570        58,380 
Cost of sales                           (13,324)  (12,930)      (25,455) 
 
Gross profit                              16,450    15,640        32,925 
 
Distribution costs                       (5,256)   (4,927)      (10,088) 
Administrative expenses                  (4,767)   (4,317)       (8,616) 
 
Operating profit                           6,427     6,396        14,221 
 
EBITDA**                                   8,383     8,235        17,825 
Depreciation and impairment losses       (2,201)   (2,019)       (4,006) 
Profit on sale of plant and equipment        245       180           402 
 
Operating profit                           6,427     6,396        14,221 
 
 
Income from trade investments                  -       265           592 
Finance income                               860       850         1,723 
Finance costs                              (813)     (851)       (1,701) 
Intercompany foreign exchange gains 
 and losses                                  206      (16)          (81) 
 
Profit before taxation                     6,680     6,644        14,754 
 
Taxation                                 (1,472)   (1,750)       (3,685) 
 
Profit for the financial period            5,208     4,894        11,069 
 
 

There were no discontinued operations in any of the above periods.

Earnings per share from continuing operations

 
 
Basic and diluted (pence)             12.32p  11.57p  26.18p 
 
Dividends declared per equity share 
 (pence)                               8.90p       -   7.10p 
 
   *    Restated due to the implementation of IAS 19 (revised), see note 2. 

** Earnings before interest, taxation, depreciation, profit on the sale of property plant and equipment, amortisation and non-recurring items

Consolidated balance sheet

as at 30 June 2013 (unaudited)

 
                                          30 June    30 June  31 December 
                                             2013       2012         2012 
                                           GBP000     GBP000       GBP000 
Non-current assets 
Property, plant and equipment              15,923     14,374       15,522 
Lease prepayments                              54         55           55 
Trade investments                             164        164          164 
Deferred tax asset                            383      1,107          609 
Retirement benefit pension surplus          2,906        632        1,809 
 
                                           19,430     16,332       18,159 
 
Current assets 
Stocks                                      4,280      3,678        3,197 
Trade and other receivables                14,283     14,878       15,248 
Cash and cash equivalents                  29,067     21,166       24,108 
 
                                           47,630     39,722       42,553 
 
Current liabilities 
Trade and other payables                  (9,923)    (8,791)      (9,881) 
Ordinary dividend                         (3,761)          -            - 
Current tax liabilities                   (1,429)    (1,482)      (1,481) 
Overseas tax (denominated in Euros)          (75)       (88)         (11) 
Bank loans                                  (980)    (8,000)      (8,000) 
Obligations under finance leases            (169)      (129)        (124) 
Provisions                                   (13)       (13)         (13) 
Derivative financial instruments                -       (11)            - 
 
                                         (16,350)  (18,514)`     (19,510) 
 
Net current assets                         31,280     21,208       23,043 
 
Total assets less current liabilities      50,710     37,540       41,202 
 
Non-current liabilities 
Bank loans                                (6,945)          -            - 
Obligations under finance leases            (299)      (384)        (342) 
Provisions                                   (15)       (28)         (21) 
 
                                          (7,259)      (412)        (363) 
 
Net assets                                 43,451     37,128       40,839 
 
Equity 
Called up share capital                       423        423          423 
Share premium                                  13         13           13 
Retained earnings                          39,763     34,060       37,825 
Translation reserve                         2,997      2,377        2,323 
Other reserves                                245        245          245 
 
Surplus attributable to equity holders 
 of the parent                             43,441     37,118       40,829 
 
Minority interest                              10         10           10 
 
Total equity                               43,451     37,128       40,839 
 
 

Consolidated cash flow statement

for the six months ended 30 June 2013 (unaudited)

 
                                             6 months  6 months     12 months 
                                                ended     ended         ended 
                                              30 June   30 June   31 December 
                                                 2013     2012*         2012* 
                                               GBP000    GBP000        GBP000 
Cash flows from operating activities 
Cash generated from operations                  7,560     6,604        16,602 
Interest paid                                   (194)     (170)         (326) 
Net UK corporation tax paid                   (1,101)   (1,378)       (2,543) 
Net withholding tax paid                            -      (76)         (140) 
Overseas tax paid                               (284)     (380)         (825) 
 
Net cash inflow from operating activities       5,981     4,600        12,768 
 
Investing activities 
Dividends received from trade investments           -       265           592 
Sale of plant and equipment                       431       252           559 
Purchase of property, plant and equipment     (2,096)   (1,902)       (4,715) 
Interest received                                 111        90           193 
 
Net cash outflow from investing activities    (1,554)   (1,295)       (3,371) 
 
Financing activities 
Loan repayments                               (8,000)   (6,000)       (6,000) 
New loans raised                                8,000         -             - 
Finance lease capital repayments                (102)      (84)         (132) 
Equity dividends paid                               -         -       (3,001) 
Purchase of own shares                              -     (826)         (825) 
 
Net cash outflow from financing activities      (102)   (6,910)       (9,958) 
 
Net increase/(decrease) in cash and 
 cash equivalents                               4,325   (3,605)         (561) 
 
Cash and cash equivalents at beginning 
 of period                                     24,108    24,986        24,986 
Effect of foreign exchange rate changes           634     (215)         (317) 
 
Cash and cash equivalents at end of 
 period                                        29,067    21,166        24,108 
 
Reconciliation of net cash flow to 
 movement in net funds in the 
 period 
 
Net increase/(decrease) in cash and 
 cash equivalents                               4,325   (3,605)         (561) 
Cash outflow from the decrease in 
 debt                                             102     6,084         6,132 
Non-cash movements re new finance 
 leases                                         (104)         -             - 
Non-cash movements in the fair value 
 of derivative instruments                          -        13            23 
Non-cash movements re loan finance 
 costs                                             75         -             - 
 
Increase in net funds during the period         4,398     2,492         5,594 
 
Opening net funds at the beginning 
 of period                                     15,642    10,365        10,365 
Effect of foreign exchange rate changes           634     (215)         (317) 
 
Closing net funds at end of period             20,674    12,642        15,642 
 
 

Consolidated statement of comprehensive total income (CSOCTI)

for the six months ended 30 June 2013 (unaudited)

 
                                       6 months  6 months     12 months 
                                          ended     ended         ended 
                                        30 June   30 June   31 December 
                                           2013     2012*         2012* 
                                         GBP000    GBP000        GBP000 
 
Profit for the financial period           5,208     4,894        11,069 
 
Other comprehensive income 
Currency translation differences on 
 foreign currency net investments           674     (281)         (335) 
Defined benefit plan actuarial gains 
 and losses                                 638   (1,409)         (667) 
Deferred tax on other comprehensive 
 income                                   (147)       355           204 
 
Other comprehensive income/(charges) 
 for the period net of tax                1,165   (1,335)         (798) 
 
Total comprehensive income for the 
 period                                   6,373     3,559        10,271 
 
 
   *    Restated due to the implementation of IAS 19 (revised), see note 2. 

Notes to the consolidated interim financial statements

for the six months ended 30 June 2013

   1              General information 

Basis of preparation

These interim financial statements have been prepared in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Companies Act 2006.

The information for the 12 months ended 31 December 2012 does not constitute the group's statutory accounts for 2012 as defined in Section 434 of the Companies Act 2006. Statutory accounts for 2012 have been delivered to the Registrar of Companies. The Auditor's report on those accounts was unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These interim financial statements, which were approved by the Board of Directors on 26 September 2013, have not been audited or reviewed by the auditors.

The interim financial statement has been prepared using the historical cost basis of accounting except for:

   (i)      properties held at the date of transition to IFRS which are stated at deemed cost; 

(ii) assets held for sale which are stated at the lower of fair value less anticipated disposal costs and carrying value; and

(iii) derivative financial instruments (including embedded derivatives) which are valued at fair value.

Functional and presentational currency

The financial statements are presented in pounds Sterling because that is the functional currency of the primary economic environment in which the group operates.

   2              Accounting policies 

With the exception of the adoption of IAS 19 (revised), which became mandatory for periods commencing on or after 1 January 2013, these interim financial statements have been prepared on a consistent basis and in accordance with the accounting policies set out in the group's Annual Report and Financial Statements 2012.

IAS 19 (revised) had the following impact on the group's results:

-- Pension scheme administration costs and the costs of managing the plan assets have been reported as an operating expense, within administration expenses, and not as a deduction from the expected return on assets within finance income.

-- Interest income included within finance income is no longer based on the expected return from the pension scheme's assets but has been restricted to the discount rate as used to discount the pension scheme's liabilities.

The results for the prior periods have been restated on a consistent basis with the current period and the following changes have been made:

 
                                                       (Unaudited) 
                                                    6 months     12 months 
                                                       ended         ended 
                                                30 June 2012   31 December 
                                                                      2012 
                                                      GBP000        GBP000 
Increase in administration expenses                       52            91 
Decrease in interest income included within 
 finance income                                            3            27 
Decrease in actuarial losses recognised in 
 the statement of comprehensive total income              55           118 
 
 

In addition the tax charge in the income statement has been reduced by GBP13,000 for the 6 months ended 30 June 2012 (GBP29,000 for the 12 months ended 31 December 2012) and the tax charge in the Consolidated Statement of Comprehensive Total Income has been increased by the same amount as a result of the above changes.

   2              Accounting policies (continued) 

There has not been any impact on the net pension scheme surplus or the consolidated retained earnings as a result of the implementation of IAS 19 (revised). The remaining changes required by IAS 19 (revised), including the abolition of the "corridor" method of accounting for certain actuarial gains and losses and changes in the treatment of interest on service costs did not have any impact on the group's results.

   3              Revenue 

An analysis of the group's revenue is as follows:

 
                                                6 months       6 months     12 months 
                                                   ended          ended         ended 
                                            30 June 2013   30 June 2012   31 December 
                                                                                 2012 
                                                  GBP000         GBP000        GBP000 
Continuing operations 
Hire                                              24,379         21,469        47,453 
Sales                                              3,451          4,789         6,083 
Installations                                      1,944          2,312         4,844 
 
Group consolidated revenue from the 
 sale of goods and provision of services          29,774         28,570        58,380 
 
 
   4              Taxation 
 
                                               6 months        6 months     12 months 
                                                  ended           ended         ended 
                                           30 June 2013   30 June 2012*   31 December 
                                                                                2012* 
                                                 GBP000          GBP000        GBP000 
Current tax 
UK corporation tax                                1,048           1,172         2,580 
Adjustments in respect of prior periods               -               -         (245) 
 
                                                  1,048           1,172         2,335 
Overseas tax                                        344             444           813 
Adjustments to overseas tax in respect 
 of prior periods                                     -              49            42 
Withholding tax                                       -              76           140 
 
Total current tax charge                          1,392           1,741         3,330 
 
Deferred tax 
Deferred tax on the origination and 
 reversal of temporary differences                   80               9           162 
Adjustments in respect of prior periods               -               -           193 
 
Total deferred tax charge                            80               9           355 
 
Total tax charge for the financial 
 period attributable to 
 continuing operations                            1,472           1,750         3,685 
 
 

The tax charge for the financial period can be reconciled to the profit before tax per the income statement multiplied by the standard effective annualised corporation tax rate in the UK of 23.25% (June 2012 and December 2012: 24.5%) as follows:

 
                                                   6 months        6 months     12 months 
                                                      ended           ended         ended 
                                               30 June 2013   30 June 2012*   31 December 
                                                                                    2012* 
                                                     GBP000          GBP000        GBP000 
 
Profit before taxation from continuing 
 and total operations                                 6,680           6,644        14,754 
 
Tax at the UK effective annualised 
 corporation tax rate of 23.25% 
 (June 2012 and December 2012: 24.5%)                 1,553           1,628         3,615 
 
Effects of: 
Expenses not deductible for tax purposes                 61              58           122 
Movement in overseas trading losses                      51              35            71 
Effect of different tax rates of 
 subsidiaries operating abroad                        (193)            (78)         (217) 
Withholding tax                                           -              76           140 
Non-taxable income from other participating 
 interests                                                -            (65)         (145) 
Effect of change in rate of corporation 
 tax                                                      -              47           109 
Adjustments to tax charge in respect 
 of previous periods                                      -              49          (10) 
 
Total tax charge for the financial 
 period                                               1,472           1,750         3,685 
 
 

The total effective tax charge for the financial period represents the best estimate of the weighted average annual effective tax rate expected for the full financial year applying tax rates that have been substantively enacted by the balance sheet date. Accordingly UK corporation tax has been provided at 23.25%; the reduction to 23% for the tax year ending 31 March 2014 having been substantially enacted on 2 July 2012. UK deferred tax has been provided at 23% being the rate substantially enacted at the balance sheet date at which the timing differences are expected to reverse.

In accordance with IAS 12 no account has been taken in these interim financial statements of the 2012 Finance Act that was substantively enacted on 2 July 2013 as this was after the balance sheet date. This Act provided for the further reduction in the rate of UK corporation tax from 23% to 21% for the tax year commencing 1 April 2014 and from 21% to 20% for the tax year commencing 1 April 2015. It is estimated that if these rate changes had been enacted by the balance sheet date it would have had the effect of reducing the deferred tax asset recognised at that date by approximately GBP30,000 and they will reduce the group's future corporation tax charge accordingly.

* Restated due to the implementation of IAS 19 (revised) see note 2.

   5              Earnings per share 

Basic earnings per share

The basic figures have been calculated by reference to the weighted average number of ordinary shares in issue and the earnings as set out below. There are no discontinued operations in any period.

 
                                                        6 months ended 30 
                                                                June 2013 
                                                   Continuing   Number of 
                                                     earnings      shares 
                                                       GBP000 
 
Basic earnings/weighted average number of shares        5,208  42,262,082 
 
Basic earnings per ordinary share (pence)              12.32p 
 
 
 
                                                        6 months ended 30 
                                                               June 2012* 
                                                   Continuing   Number of 
                                                     earnings      shares 
                                                       GBP000 
 
Basic earnings/weighted average number of shares        4,894  42,297,624 
 
Basic earnings per ordinary share (pence)              11.57p 
 
 
 
                                                          12 months ended 
                                                        31 December 2012* 
                                                   Continuing   Number of 
                                                     earnings      shares 
                                                       GBP000 
 
Basic earnings/weighted average number of shares       11,069  42,279,853 
 
Basic earnings per ordinary share (pence)              26.18p 
 
 

Diluted earnings per share

There were no dilutive instruments outstanding at 30 June 2013 or either of the comparative periods and, therefore, there is no difference in the basic and diluted earnings per share for any of these periods. There were no discontinued operations in any period.

* Restated due to the implementation of IAS 19 (revised) see note 2.

   6              Dividend payments 

The directors declared the following interim dividend during the 6 months ended 30 June 2013:

 
                                                        6 months ended 30 
                                                                June 2013 
                                                Pence per  Total dividend 
                                                    share        declared 
                                                                   GBP000 
 
Interim dividend declared on 18 June 2013 and 
 paid to shareholders on the register 
 as at 28 June 2013 on 24 July 2013                 8.90p           3,761 
 
 

The above interim dividend has been charged against reserves during the 6 months ended 30 June 2013 and included on the balance sheet as a current liability as at 30 June 2013. The amount was paid on 24 July 2013.

The directors declared the following interim dividend during the 12 month period ended 31 December 2012:

 
                                                  12 months ended 31 
                                                     December 2012 
                                               Pence per  Total dividend 
                                                   share        declared 
                                                                  GBP000 
 
Interim dividend declared on 29 October 2012 
 and paid to shareholders on the register 
 as at 9 November 2012 on 3 December 2012          7.10p           3,001 
 
 

The above interim dividend was charged against reserves and paid during the 12 months ended 31 December 2012.

The directors did not declare or pay any interim dividends during the 6 months ended 30 June 2012.

   7              Retirement benefit obligations - defined benefit pension scheme 

The group closed the UK group defined benefit pension scheme to future accrual as at 29 December 2002. The assets of the defined benefit pension scheme continue to be held in a separate trustee administered fund.

As at 30 June 2013 the group had a net defined benefit pension scheme surplus, calculated in accordance with IAS 19 using the assumptions as set out below, of GBP2,906,000 ( June 2012: GBP632,000; 31 December 2012: GBP1,809,000). The asset has been recognised in the financial statements as the directors are satisfied that it is recoverable in accordance with IFRIC 14.

Following the triennial recalculation of the funding deficit as at 31 December 2010, and taking into account the significant market movements since that date, a revised schedule of contributions and recovery plan has been agreed with the pension scheme trustees. Based on this schedule of contributions, which is effective from 1 January 2011, the best estimate of the employer contributions to be paid during the year commencing 1 January 2013 is GBP960,000.

Assumptions used to calculate the scheme surplus

The last full actuarial valuation was carried out as at 31 December 2010. A qualified independent actuary has updated the results of this valuation to calculate the position as disclosed below.

The major assumptions used in this valuation to determine the present value of the scheme's defined benefit obligation were as follows:

 
                                               30 June  30 June  31 December 
                                                  2013     2012         2012 
                                                     %        %            % 
Rate of increase in: 
 Pensionable salaries                              n/a      n/a          n/a 
 Pensions in payment                              3.20     2.80         2.90 
Discount rate applied to scheme liabilities       4.60     4.40         4.30 
Inflation assumption: 
 RPI                                              3.30     2.80         3.00 
 CPI for the first six years                      2.30     1.80         2.00 
 CPI after the first six years                    2.30     1.80         2.00 
 
 

From 1 January 2011, the government amended the basis for statutory increases to deferred pensions and pensions in payment. Such increases are now based on inflation measured by the Consumer Price Index (CPI) rather than the Retail Price Index (RPI). Having reviewed the scheme rules and considered the impact of the change on this pension scheme, the directors consider that future increases to (i) all deferred pensions and (ii) Guaranteed Minimum Pensions accrued between 6 April 1988 and 5 April 1997 and currently in payment will be based on CPI rather than RPI. Accordingly, this assumption was adopted as at 31 December 2010 and for all subsequent periods.

Assumptions regarding future mortality experience are set based on advice in accordance with published statistics. The mortality table used at 30 June 2013 is 110% S1NA CMI2012 (30 June 2012 and 31 December 2012: 110% S1NA CMI2011).

The assumed average life expectancy in years of a pensioner retiring at the age of 65 given by the above tables is as follows:

 
                           30 June     30 June  31 December 
                              2013        2012         2012 
 
Male, current age 45    22.7 years  22.6 years   22.6 years 
Female, current age 45  24.0 years  23.9 years   23.9 years 
 
 

Valuations

The fair value of the scheme's assets, which are not intended to be realised in the short term and may be subject to significant change before they are realised, and the present value of the scheme's liabilities, which are derived from cash flow projections over long periods and are inherently uncertain, were as follows:

 
                                           30 June    30 June  31 December 
                                              2013       2012         2012 
                                            GBP000     GBP000       GBP000 
 
Total fair value of plan assets             34,946     32,200       34,195 
Present value of defined benefit 
 funded obligation calculated in 
 accordance with stated assumptions       (32,040)   (31,568)     (32,386) 
 
Surplus in the scheme calculated 
 in accordance with stated 
 assumptions recognised in the balance 
 sheet                                       2,906        632        1,809 
 
 

The movement in the fair value of the scheme's assets during the period were as follows:

 
                                     30 June  30 June  31 December 
                                        2013    2012*        2012* 
                                      GBP000   GBP000       GBP000 
 
Fair value of plan assets at the 
 start of the period                  34,195   31,447       31,447 
Expected return on plan assets           726      743        1,499 
Actuarial gains recognised in the 
 CSOCTI                                  244      320        1,794 
Employer contributions - normal          480      420          840 
Benefits paid                          (634)    (678)      (1,294) 
Scheme administration expenses          (65)     (52)         (91) 
 
Fair value of plan assets at the 
 end of the period                    34,946   32,200       34,195 
 
 

The movement in the present value of the defined benefit obligation during the period was as follows:

 
                                           30 June    30 June  31 December 
                                              2013       2012         2012 
                                            GBP000     GBP000       GBP000 
 
Opening present value of defined 
 benefit funded obligation calculated 
 in accordance with stated assumptions    (32,386)   (29,818)     (29,818) 
Interest on defined benefit obligation       (682)      (699)      (1,401) 
Actuarial gain/(loss) recognised 
 in the CSOCTI calculated in 
 accordance with stated assumptions            394    (1,729)      (2,461) 
Benefits paid                                  634        678        1,294 
 
Closing present value of defined 
 benefit funded obligation calculated 
 in accordance with stated assumptions    (32,040)   (31,568)     (32,386) 
 
 

Amounts recognised in the income statement

The amounts (charged)/credited in the income statement were:

 
                                             30 June  30 June  31 December 
                                                2013    2012*        2012* 
                                              GBP000   GBP000       GBP000 
 
Expected return on pension scheme 
 assets credited within finance 
 income                                          726      743        1,499 
Interest on pension scheme liabilities 
 charged within finance costs                  (682)    (699)      (1,401) 
 
Net pension interest credit                       44       44           98 
Scheme expenses charged in administration 
 expenses                                       (65)     (52)         (91) 
 
Net pension (charge)/credit in the 
 income statement                               (21)      (8)            7 
 
 

Actuarial gains and losses recognised in the consolidated statement of comprehensive total income (CSOCTI)

The amounts credited/(charged) in the CSOCTI were:

 
                                          30 June   30 June  31 December 
                                             2013     2012*        2012* 
                                           GBP000    GBP000       GBP000 
 
Actual return less expected return 
 on scheme assets                             244       320        1,794 
Experience gains and losses arising 
 on plan obligation                           (6)     (437)        (278) 
Changes in demographic and financial 
 assumptions underlying the 
 present value of plan obligations            400   (1,292)      (2,183) 
 
Actuarial gain/(loss) calculated 
 in accordance with stated assumptions 
 recognised in the CSOCTI                     638   (1,409)        (667) 
 
 

* Restated due to the implementation of IAS 19 (revised), see note 2.

   8              Called up share capital 
 
                                       30 June  30 June  31 December 
                                          2013     2012         2012 
                                        GBP000   GBP000       GBP000 
Issued and fully paid: 
42,262,082 ordinary shares of one 
 pence each (June 2012 and December 
 2012: 42,262,082 ordinary shares 
 of one pence each)                        423      423          423 
 
 

The company did not buy back any shares for cancellation during the 6 months ended 30 June 2013 (June 2012 and December 2012: 426,506 shares for a total consideration of GBP814,934). The company did not issue any shares in the period or either of the comparative periods. No share options were granted, forfeited or expired during either the current or comparative financial periods. There were no share options outstanding at any period end.

The company has one class of ordinary shares which carry no right to fixed income.

   9              Cash generated from operations 
 
                                             6 months  6 months     12 months 
                                             ended 30     ended         ended 
                                            June 2013   30 June   31 December 
                                                          2012*         2012* 
                                               GBP000    GBP000        GBP000 
 
Profit for the period attributable 
 to equity shareholders                         5,208     4,894        11,069 
Adjustments for: 
 Taxation charge                                1,472     1,750         3,685 
 Finance costs                                    813       851         1,701 
 Finance income                                 (860)     (850)       (1,723) 
 Inter-company foreign exchange gains 
  and losses                                    (206)        16            81 
 Income from trade investments                      -     (265)         (592) 
 Profit on the sale of property, 
  plant and equipment                           (245)     (180)         (402) 
 Depreciation                                   2,201     2,019         4,006 
 Excess of normal pension contributions 
  compared with service cost                    (415)     (368)         (749) 
 
Cash generated from operations before 
 movements in working capital                   7,968     7,867        17,076 
 
Movement in stocks                            (1,419)     (301)         (246) 
Movement in trade and other receivables           988      (96)         (462) 
Movement in trade and other payables               29     (860)           247 
Movement in provisions                            (6)       (6)          (13) 
 
Cash generated from operations                  7,560     6,604        16,602 
 
 

* Restated due to the implementation of IAS 19 (revised) see note 2.

   10           Analysis of net funds 
 
                                      30 June  30 June  31 December 
                                         2013     2012         2012 
                                       GBP000   GBP000       GBP000 
 
Cash and cash equivalents per cash 
 flow statement                        29,067   21,166       24,108 
 
 
Bank loans                            (7,925)  (8,000)      (8,000) 
Obligations under finance leases        (468)    (513)        (466) 
Derivative financial instruments            -     (11)            - 
 
Gross debt                            (8,393)  (8,524)      (8,466) 
 
Net funds                              20,674   12,642       15,642 
 
 
   11           Distribution of interim financial statements 

Following a change in regulations in 2008, the company is no longer required to circulate this half year report to shareholders. This enables us to reduce costs associated with printing and mailing and to minimise the impact of these activities on the environment. A copy of the interim financial statements is available on the company's website, www.andrews-sykes.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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