We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Norcros Plc | LSE:NXR | London | Ordinary Share | GB00BYYJL418 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 185.00 | 178.50 | 188.00 | 188.50 | 185.00 | 185.00 | 53,440 | 11:00:51 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Ceramic Wall And Floor Tile | 441M | 16.8M | 0.1882 | 9.83 | 165.16M |
From Apr 2019 to Apr 2024
TIDMNXR
RNS Number : 8936W
Norcros PLC
13 November 2014
13 November 2014
Norcros plc
Results for the six months ended 30 September 2014
'Improved performances across all our businesses'
Norcros, the market leading supplier of innovative branded showers, taps, bathroom accessories, tiles and adhesives, today announces its results for the six months ended 30 September 2014.
Financial Summary
Hot Features
Premium
2014 2013 as % change % change
restated as reported at constant
currency
--------------------------------- ---------- ---------- ------------- ---------------
Revenue GBP108.6m GBP111.2m -2.3% +3.3%
--------------------------------- ---------- ---------- ------------- ---------------
Underlying* operating profit GBP7.4m GBP6.6m +10.8% +13.7%
--------------------------------- ---------- ---------- ------------- ---------------
Underlying* profit before
tax GBP6.7m GBP5.9m +12.9% +15.6%
--------------------------------- ---------- ---------- ------------- ---------------
Profit before tax GBP6.3m GBP0.3m n/a
--------------------------------- ---------- ---------- ------------- ---------------
Underlying operating cash
flow** GBP11.6m GBP10.2m 13.7%
--------------------------------- ---------- ---------- ------------- ---------------
Dividend per share 0.185p 0.17p 8.8%
--------------------------------- ---------- ---------- ------------- ---------------
* Underlying means before exceptional operating items,
non-underlying operating items, and, where relevant,
before non-cash finance costs
** Underlying operating cash flow means cash generated from
continuing operations before exceptional cash flows and
pension fund deficit recovery contributions
The results for the previous year have been restated
where required to reflect discontinued operations
Highlights
-- Underlying operating profits increased by 10.8% to GBP7.4m (2013: GBP6.6m) -- Revenue increased by 3.3% on a constant currency basis -- Strong underlying operating cash generation: 112% of underlying EBITDA (2013: 106%) -- Bank facilities renewed through to July 2019 on improved terms -- Disposal of Australian tiles business realising net cash proceeds of GBP3.8m -- Legacy lease exit and freehold acquisition at Sheffield for GBP3.4m in November 2014 -- Interim dividend increased by 8.8% to 0.185p per share
Martin Towers, Chairman, commented:
"I am pleased to announce another solid set of results for the six months ended 30 September 2014. We have seen improved performances across all our businesses despite continued mixed market conditions and a weaker South African Rand.
With our strong brands, leading market positions and continued self-help initiatives focused on market share gains, the Board remains confident that the Group should continue to make progress in line with market expectations."
There will be a presentation today at 9.30 am for analysts at the offices of Hudson Sandler, 29 Cloth Fair, London, EC1A 7NN. The supporting slides will be available on the Norcros website at http://www.norcros.com later in the day.
ENQUIRIES
Norcros plc Tel: 01625 547700 Nick Kelsall, Group Chief Executive Martin Payne, Group Finance Director Hudson Sandler Tel: 0207 796 4133 Nick Lyon Charlie Jack Katie Matthews
Notes to Editors
-- Norcros is a leading supplier of high quality and innovative showers, taps, bathroom accessories, ceramic wall and floor tiles and adhesive products with operations primarily in the UK and South Africa.
-- Based in the UK, Norcros operates under four brands:
- Triton Showers - Market leader in the manufacture and marketing of showers in the UK
- Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom accessories and valves
- Johnson Tiles - A leading manufacturer and supplier of ceramic tiles in the UK
- Norcros Adhesives - Manufacturer of tile & stone adhesives, grouts and related products
-- Based in South Africa, Norcros operates under three brands:
- Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitary ware, showers and adhesives
- Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles
- TAL - The leading manufacturer of ceramic and building adhesives
-- Norcros is headquartered in Wilmslow, Cheshire and employs around 1700 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com/
Chairman's statement
I am pleased to announce another solid set of results for the six months ended 30 September 2014. Underlying operating profit was up 10.8% to GBP7.4m (2013: GBP6.6m) with improved performances across all our businesses despite continued mixed market conditions and a weaker South African Rand. Constant currency revenue growth of 3.3% in the period reflected strong growth in the UK trade sector and double digit constant currency growth in South Africa, but a subdued performance from the UK retail sector and export markets.
Underlying operating cash generation in the period was excellent, with net debt reduced by GBP6.9m from 31 March 2014 to GBP20.0m at 30 September 2014, driven by good working capital control as well as GBP3.8m net proceeds from the sale of our Australian tiles business in May 2014. During the period we also took advantage of favourable market conditions to agree a new five year unsecured GBP70m revolving credit and GBP30m accordion facility to support the Group's growth strategy.
The disposal in May 2014 of our Australian tiles business represents further progress towards our strategic targets, allowing us to focus on our chosen geographies of the UK, Africa and the Middle East. I am delighted to say that as announced on 7 November, further progress has been made on our legacy leases with the lease exit and freehold acquisition at Sheffield for GBP3.4m. With the end of the lease at Drakes Way, Swindon in December 2014, the Group is nearing an end to its legacy lease cash outflows.
UK construction activity and an improving UK housing market continue to drive the UK trade sector recovery, and we have seen strong evidence of this across all our UK businesses. However, the UK retail sector remains subdued with consumer confidence still weak. Conditions in our South African markets have remained challenging, but despite this our businesses have performed strongly, gained market share and delivered 11% constant currency revenue growth. The weak South African Rand has had an adverse impact on prior year Sterling comparisons, but assuming no further devaluation of the Rand in the year, this strong constant currency growth should start to convert to Sterling growth in the second half of the year. With our strong brands, leading market positions and continued self-help initiatives focused on market share gain, the Board remains confident that the Group should continue to make progress in line with market expectations for the year to 31 March 2015.
Results
Revenue increased by 3.3% on a constant currency basis for the six months ended 30 September 2014. A weaker South African Rand left Group revenue on a Sterling reported basis 2.3% lower at GBP106.8m (2013: GBP111.2m).
Underlying operating profit increased by 10.8% to GBP7.4m (2013: GBP6.6m) and was achieved notwithstanding an adverse currency impact of GBP0.2m.
Underlying profit before taxation increased by 12.9% to GBP6.7m (2013: GBP5.9m) reflecting the higher underlying operating profit.
Profit before taxation for the period was GBP6.3m (2013: GBP0.3m), reflecting increased underlying profit before taxation, lower non-underlying interest charges due to a credit of GBP1.6m in respect of the movement on fair value of derivatives (2013: GBP2.5m charge), and exceptional operating items of GBPnil (2013: charge of GBP1.2m).
Basic underlying earnings per share was 0.8p (2013: 0.9p), reflecting improved underlying profit before taxation offset by a higher underlying tax charge due to the full recognition of deferred tax assets relating principally to tax losses and capital allowances in the annual results for the year to 31 March 2014.
Financial
Underlying operating cash generated in the period was GBP11.6m (2013: GBP10.2m), with working capital decreasing by GBP0.6m in the period compared to a GBP0.2m decrease in the first half last year. This represents strong cash conversion at 112% of underlying EBITDA for the period (2013: 106%). A pension deficit recovery payment of GBP1.0m (2013: GBP1.0m) in the period (as part of the GBP2.0m plus CPI per annum contribution agreed with the Trustee in 2013) and cash outflows relating to exceptional items of GBP0.7m (2013: GBP2.6m) resulted in net cash generated from continuing operations at GBP9.9m (2013: GBP6.6m). Investment in capital expenditure in the period amounted to GBP3.4m (2013: GBP2.1m) and represents 1.1 times depreciation.
As reported in the Group's 2014 Annual Report, the sale of the Australian tiles business to Kim Hin Industries Berhad completed on 30 May 2014. This disposal resulted in a net cash inflow of GBP3.8m being recognised in the period.
In July 2014 the Group agreed a new unsecured GBP70m revolving credit facility plus a GBP30m accordion facility with Lloyds Bank plc, Barclays Bank plc and HSBC Bank plc. The new banking facility has been secured to July 2019, and at current levels of net debt and leverage is expected to reduce interest costs by approximately GBP0.2m per annum. As a consequence, non-cash financing costs of GBP0.4m relating to the old facility have been expensed to the income statement as exceptional finance costs. A cash outflow of GBP0.7m was incurred in the period in relation to the costs of the new facility. Net debt at 30 September 2014 reduced to GBP20.0m (2013: GBP28.8m) from GBP26.9m at 31 March 2014.
The position of our UK defined benefit pension scheme as calculated under IAS 19R has declined from a deficit of GBP21.8m at 31 March 2014 to a deficit of GBP40.6m at 30 September 2014. The increased deficit principally reflects a decrease in the discount rate to 3.9% and represents a 90% funding level on this basis.
Property
There has been good progress during the period in resolving some of the Group's legacy property issues. In April 2014, a small area of surplus land in Braintree, UK, was sold, realising a profit on sale and net proceeds of GBP0.4m. This has been treated as an exceptional operating item in the income statement.
There have been no significant developments in respect of the contractual dispute arising from the proposed sale of the surplus land in Tunstall to a subsidiary of W M Morrison Supermarkets plc (Morrisons). The Board continues to seek compensation from Morrisons and to market the site to alternative buyers. In the period exceptional costs relating to legal expenses of GBP0.1m connected with the dispute were incurred.
As announced on 7 November 2014 the Group exited its legacy lease and acquired the freehold of the property at Orgreave Drive, Sheffield, for a consideration of GBP3.4m including costs. The lease had 68 years to run and the exit will reduce annual cash outflows by GBP0.4m. It is anticipated that an exceptional charge of approximately GBP2.5m relating to this transaction will be recognised in the second half of the year.
Dividend
The Board is declaring an interim dividend increase of 8.8% to 0.185p per share (2013: 0.17p), reflecting their confidence in the Group's future prospects. The dividend is payable on 7 January 2015 to shareholders on the register on 5 December 2014. The shares will be quoted as ex-dividend on 4 December 2014.
Operating review
UK
For the six months ended 30 September 2014 total revenue in our UK businesses was in line with the prior period at GBP72.8m. Underlying operating profit at GBP6.4m was 7.3% higher than last year at GBP5.9m and represents an improved return on sales of 8.8% (2013: 8.2%).
Triton
Our market leading shower operation, Triton Showers, recorded revenue growth of 1.2% for the six month period to 30 September 2014 to GBP25.4m (2013: GBP25.1m).
The overall UK shower market declined by around 1% over the first six months of the year and Triton's performance in both UK trade and retail sectors was in line with this performance. Both the retail and trade sectors performed below expectations in the first quarter due to customer destocking and internal restructuring in the national merchants, but performance rebounded strongly in the second quarter with UK revenue 2.7% ahead of last year. Good progress continues to be made in the care sector, and Triton's Safeguard+ range, the fulcrum of the "Inclusive Showering" product offering, has been very well received.
Export revenue, which is predominantly derived from Ireland and represents about 16% of overall Triton revenue, was 14.9% higher than the prior year helped by increased activity in the new build sector.
Increased revenue as well as continued input cost reduction initiatives and manufacturing efficiencies resulted in underlying operating profits ahead of the same period last year and excellent cash generation.
Vado
Our leading manufacturer of taps, mixer showers, bathroom accessories and valves, Vado, recorded revenue of GBP14.8m for the period, 0.3% higher than last year (2013: GBP14.7m). UK revenue was 17.9% higher than the prior year, with strong performances in both the trade and retail sectors. The UK trade sector revenue was 20.7% higher, benefiting from an increase in new build activity and our investment in developing the specification market leading to market share gain through new accounts such as Avant Homes. UK retail sector revenue was 15.5% higher than the prior period despite challenging market conditions, demonstrating the success of the Vado Partnership Programme and our developing relationships with independent merchant buying groups.
Export revenue, which accounts for approximately 35% of Vado revenue, was heavily impacted by the timing of commercial projects and distributor destocking in the Middle East. In the first quarter export revenues were 35% lower than the previous period, but overall for the half year 22% lower, reflecting an improving trend. We continue to work on selectively expanding our geographic reach and have recently appointed distributors in Poland, Japan and Cameroon.
Whilst revenue was broadly consistent with the prior period, margins improved as a result of business mix and cost savings, resulting in underlying operating profits ahead of last year.
Johnson Tiles
Our UK market leading ceramic tile manufacturer and a market leader in the supply of both own manufactured and imported tiles, Johnson Tiles, recorded revenue 3.7% lower than the same period last year at GBP29.2m (2013: GBP30.3m).
UK revenue was 1.8% lower than the same period last year. Trade sector revenue was 8.3% ahead of the same period last year driven by improving new house build and commercial specifications as well as new business to supply ceramic poppies that form the main part of the World War I commemorations at the Tower of London. In contrast, we have experienced challenging conditions in the retail sector in the first half with revenue 9.1% lower than the same period last year, reflecting both weaker sales out and destocking by a number of national retailers. Despite the difficult conditions, we have continued to broaden our customer base and have recently launched the Minton Hollins brand of Victoriana tiles with Topps Tiles.
Revenue from our export business, which accounts for approximately 11% of revenue, was 16.1% lower than the same period last year. This was mainly due to lower revenue in the Middle East and the fact that the prior period benefited from certain large commercial projects such as the Waikiki Beach Hilton Hotel mural in Hawaii.
Although we have benefited from a reduced cost base following the business restructuring completed last year, the savings in the first half have been offset by a shortfall in production performance in quarter two as an enforced change to the tiles body recipe in July impacted output levels whilst the new recipe bedded in. Performance has gradually improved and is moving back towards normal levels.
The difficult UK retail and export market conditions together with the period of production inefficiency resulted in a modest underlying operating loss for the first half, and a smaller loss than the same period last year.
Norcros Adhesives
Norcros Adhesives, our manufacturer and supplier of tile and stone adhesives and ancillary products, saw continued strong growth with revenue 27.5% higher at GBP3.4m (2013: GBP2.7m), reflecting further penetration of the DIY multiples and other significant retail account wins. Our patented bag-in-bucket product range aimed at the DIY sector is achieving greater traction and is now listed with a major DIY multiple. Growth has also been achieved in the specification segment, reflecting our ability to offer a fully guaranteed system from substrate to tile, particularly when combined with our fast turnaround specification service and high quality technical support. This strong growth has delivered underlying operating profit ahead of the same period last year.
South Africa
Another period of double digit constant currency growth in the period in our South African businesses resulted in revenue 11.0% higher than prior year on a constant currency basis, although a 19% weaker Rand meant reported Sterling revenue was 6.7% lower at GBP35.8m (2013: GBP38.4m). Underlying operating profit at GBP1.0m was 40% higher than the previous period (2013: GBP0.7m) despite the weaker Rand adversely impacting reported profits by GBP0.2m. This represents an improved return on sales of 2.7% (2013: 1.8%). All three businesses delivered an improvement in local currency underlying operating profit performance.
We have again made excellent progress in our South African operations reflecting the self-help actions to improve the operational stability and performance of the business and the steps taken to strengthen the senior management team. The business today is more resilient and well-placed to capitalise on new growth opportunities.
Johnson Tiles South Africa
Our tile manufacturing business, Johnson Tiles South Africa, achieved independent sector revenue of GBP5.2m which was in line with the prior year on a constant currency basis, but 16.5% lower on a reported Sterling basis.
New product ranges have been launched successfully ahead of schedule using the new inkjet printing machine installed towards the end of the previous financial year and have been well received by customers. This, together with continued production efficiency improvements, has resulted in a substantially reduced loss in the first half of the year compared to last year.
Building on the success of the first inkjet machine, the second half of the year will see the launch of new rectangular format tiles and the installation of a second inkjet printer. This will accelerate the restructuring and repositioning of our product range and help drive the business to profitability.
As previously announced, Johnson Tiles South Africa had been experiencing a legal strike in its manufacturing facility for a significant part of the period. It is pleasing to report that the dispute has recently been settled and that the plant continued to operate normally during the strike action.
TAL
Our market leading adhesive business, TAL, delivered constant currency independent sector revenue growth of 8.7% in the period, which translated into an 8.5% decline on a Sterling reported basis to GBP8.4m (2013: GBP9.2m). Despite intensified competition, revenue grew in its domestic market as well as outside of the traditional South African market.
Focus on both supply chain and improved production efficiencies was supported by investment in future growth with the addition of new packing heads on our main adhesive line, as well as a new grout line, at our main Olifantsfontein production facility. The new grout line has significantly increased our capacity and at the same time enabled us to convert our paper-based packaging to a more durable and customer-friendly plastic format. During the period, a number of new products have been launched including a powdered bond and StoneFlow, a durable cementitious decorative overlay, both of which have been well received in the market.
Revenue growth and improved plant and procurement efficiencies resulted in higher constant currency underlying operating profits than the same period last year.
Tile Africa
Revenue at our leading retailer of wall and floor tiles, adhesives, showers, sanitaryware and bathroom fittings, Tile Africa, increased by 14.9% on a constant currency basis compared to the prior year, but was 3.3% lower on a Sterling reported basis at GBP22.2m (2013: GBP23.0m). This performance helped deliver an improved underlying operating profit compared to the prior year.
Excellent progress has been made in our store-based retail revenues reflecting improved stock availability and range competitiveness which have been driven off the back of improvements in our supply chain. These initiatives will be further supported by an upgraded visual merchandising concept which will be rolled out across the business in the second half of the year. Our test stores have shown immediate benefits in both sales and stock turns as a result of these self-help initiatives.
We have also been working on a new concept store which will provide the platform for our retail growth over the medium term. Our test store at Garsfontein has been recently upgraded and was successfully launched on 1 November 2014. During the period we also converted our existing store at Silverton to our first factory outlet aimed specifically at the emerging consumer segments which have experienced strong growth. Initial results from this test store have been very positive.
We also completed the purchase of our franchise store at Port Elizabeth after the period end, and as a result now operate from 29 stores and four franchises. We plan to expand our estate through a new store opening programme, with two new stores expected to open in the first quarter of the next financial year.
Discontinued operations
The completion of the sale of 100% of the issued share capital of Norcros Industry (Pty) Limited (NIPL), which owns its Australian tiles business, to Kim Hin Industries Berhad (KHIB), was completed on 30 May 2014. As NIPL represented a major line of business for the Group, its operations have been treated as discontinued and the prior periods have also been restated to conform to this style of presentation. The profit for the period from discontinued operations was GBP0.1m (2013: GBP0.2m).
M. G. Towers
Chairman
13 November 2014
Condensed consolidated income statement
26 weeks ended 30 September 2014
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited)* (audited)
Notes GBPm GBPm GBPm
-------------------------------------- ----- ------------- ------------- ----------
Continuing operations
Revenue 108.6 111.2 218.7
-------------------------------------- ----- ------------- ------------- ----------
Operating profit 6.4 4.5 12.8
-------------------------------------- ----- ------------- ------------- ----------
Underlying operating profit 7.4 6.6 16.1
Non-underlying operating items 4 (1.0) (1.0) (1.8)
Exceptional operating items 4 - (1.2) (1.5)
-------------------------------------- ----- ------------- ------------- ----------
Operating profit 6.4 4.4 12.8
-------------------------------------- ----- ------------- ------------- ----------
Finance costs 7 (0.8) (3.5) (5.7)
Exceptional finance costs 7 (0.4) - -
-------------------------------------- ----- ------------- ------------- ----------
Total finance costs 7 (1.2) (3.5) (5.7)
-------------------------------------- ----- ------------- ------------- ----------
Finance income 7 1.6 - -
IAS 19R finance cost (0.5) (0.6) (1.3)
-------------------------------------- ----- ------------- ------------- ----------
Profit before taxation 6.3 0.3 5.8
Taxation 6 (1.6) - 4.3
-------------------------------------- ----- ------------- ------------- ----------
Profit for the period from continuing
operations 4.7 0.3 10.1
-------------------------------------- ----- ------------- ------------- ----------
Profit/(loss) for the period
from discontinued operations 13 0.1 0.2 (1.4)
-------------------------------------- ----- ------------- ------------- ----------
Profit for the period 4.8 0.5 8.7
-------------------------------------- ----- ------------- ------------- ----------
Earnings per share attributable
to the owners of the Company
Basic earnings per share:
From continuing operations 5 0.8p 0.1p 1.7p
From discontinued operations 5 - - (0.2p)
-------------------------------------- ----- ------------- ------------- ----------
From profit for the period 5 0.8p 0.1p 1.5p
-------------------------------------- ----- ------------- ------------- ----------
Diluted earnings per share:
From continuing operations 5 0.8p 0.1p 1.6p
From discontinued operations 5 - - (0.2p)
-------------------------------------- ----- ------------- ------------- ----------
From profit for the period 5 0.8p 0.1p 1.4p
-------------------------------------- ----- ------------- ------------- ----------
Weighted average number of shares
for basic earnings per share
(millions) 5 589.6 583.2 584.0
-------------------------------------- ----- ------------- ------------- ----------
Non-GAAP measures:
Underlying profit before taxation
(GBPm) 3 6.7 5.9 14.6
Underlying earnings (GBPm) 3 5.0 5.1 17.0
Basic underlying earnings per
share 5 0.8p 0.9p 2.9p
Diluted underlying earnings per
share 5 0.8p 0.8p 2.8p
-------------------------------------- ----- ------------- ------------- ----------
* The results of previous periods have been restated where required to reflect discontinued operations.
Condensed consolidated statement of comprehensive income
26 weeks ended 30 September 2014
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited)* (audited)
Notes GBPm GBPm GBPm
-------------------------------------------- ----- ------------- ------------- ----------
Profit for the period 4.8 0.5 8.7
-------------------------------------------- ----- ------------- ------------- ----------
Other comprehensive income and expense:
Items that will not subsequently
be reclassified to the income statement
Actuarial (losses)/gains on retirement
benefit obligations (14.8) 2.4 6.2
Items that may be subsequently reclassified
to the income statement
Foreign currency translation adjustments (1.2) (6.6) (9.5)
-------------------------------------------- ----- ------------- ------------- ----------
Other comprehensive expense for
the period (16.0) (4.2) (3.3)
-------------------------------------------- ----- ------------- ------------- ----------
Total comprehensive (expense)/income
for the period (11.2) (3.7) 5.4
-------------------------------------------- ----- ------------- ------------- ----------
Attributable to equity shareholders
arising from:
Continuing operations (11.4) (3.1) 7.7
Discontinued operations 13 0.2 (0.6) (2.3)
-------------------------------------------- ----- ------------- ------------- ----------
(11.2) (3.7) 5.4
-------------------------------------------- ----- ------------- ------------- ----------
Items in the statement are disclosed net of tax.
* The results of previous periods have been restated where required to reflect discontinued operations.
Condensed consolidated balance sheet
At 30 September 2014
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
------------------------------------ ----- ------------- ------------- ----------
Non-current assets
Goodwill 22.0 22.4 22.1
Intangible assets 4.8 5.2 5.0
Property, plant and equipment 36.8 39.5 36.9
Investment properties 4.3 5.3 4.4
Derivative financial instruments 0.2 - -
Deferred tax assets 6 14.1 7.8 11.6
------------------------------------ ----- ------------- ------------- ----------
82.2 80.2 80.0
------------------------------------ ----- ------------- ------------- ----------
Current assets
Inventories 51.0 55.5 50.2
Trade and other receivables 42.1 43.0 41.9
Pension scheme asset 12 - 0.1 -
Cash and cash equivalents 4.5 5.7 3.9
Assets classified as held-for-sale - - 6.2
------------------------------------ ----- ------------- ------------- ----------
97.6 104.3 102.2
------------------------------------ ----- ------------- ------------- ----------
Current liabilities
Trade and other liabilities (54.1) (56.0) (52.3)
Derivative financial instruments (0.8) (1.0) (1.8)
Current tax liabilities (1.7) (1.8) (1.3)
Financial liabilities - borrowings 8 (4.1) (0.1) (0.8)
Liabilities associated with
assets classified as held-for-sale - - (1.9)
------------------------------------ ----- ------------- ------------- ----------
(60.7) (58.9) (58.1)
------------------------------------ ----- ------------- ------------- ----------
Net current assets 36.9 45.4 44.1
------------------------------------ ----- ------------- ------------- ----------
Total assets less current
liabilities 119.1 125.6 124.1
------------------------------------ ----- ------------- ------------- ----------
Non-current liabilities
Financial liabilities - borrowings 8 (20.4) (34.4) (30.5)
Pension scheme liability 12 (40.6) (26.6) (21.8)
Derivative financial instruments - - (0.3)
Other non-current liabilities (1.5) (2.1) (1.6)
Provisions (3.7) (6.1) (4.4)
------------------------------------ ----- ------------- ------------- ----------
(66.2) (69.2) (58.6)
------------------------------------ ----- ------------- ------------- ----------
Net assets 52.9 56.4 65.5
------------------------------------ ----- ------------- ------------- ----------
Financed by:
Ordinary share capital 9 5.9 5.8 5.8
Share premium 0.9 0.5 0.9
Retained earnings and other
reserves 46.1 50.1 58.8
------------------------------------ ----- ------------- ------------- ----------
Total equity 52.9 56.4 65.5
------------------------------------ ----- ------------- ------------- ----------
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated statement of cash flow
26 weeks ended 30 September 2014
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited)* (audited)
Notes GBPm GBPm GBPm
---------------------------------------------- ----- ------------- ------------- ----------
Cash generated from operations 10 10.0 6.5 13.6
Income taxes paid (0.2) (0.4) (1.7)
Interest paid (0.7) (0.8) (1.6)
---------------------------------------------- ----- ------------- ------------- ----------
Net cash generated from operating activities 9.1 5.3 10.3
---------------------------------------------- ----- ------------- ------------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (3.4) (2.1) (4.2)
Proceeds from sale of property, plant
and equipment 0.4 1.4 1.4
Acquisition of subsidiary undertakings (0.3) 0.1 0.1
Disposal of subsidiary undertakings
net of cash divested 13 3.8 - -
---------------------------------------------- ----- ------------- ------------- ----------
Net cash generated from/(used in) investing
activities 0.5 (0.6) (2.7)
---------------------------------------------- ----- ------------- ------------- ----------
Cash flows from financing activities
Net proceeds from issue of ordinary
share capital - - 0.4
Costs of raising debt finance (0.7) (0.2) (0.2)
Repayment of borrowings (31.1) (2.9) (6.9)
Drawdown of borrowings under new facility 21.0 - -
Dividends paid to equity shareholders (2.0) (1.8) (2.8)
---------------------------------------------- ----- ------------- ------------- ----------
Net cash used in financing activities (12.8) (4.9) (9.5)
---------------------------------------------- ----- ------------- ------------- ----------
Net decrease in cash at bank and in
hand and bank overdrafts (3.2) (0.2) (1.9)
Cash at bank and in hand and bank overdrafts
at beginning of the period 3.7 6.4 6.4
Exchange movements on cash and bank
overdrafts (0.1) (0.5) (0.8)
---------------------------------------------- ----- ------------- ------------- ----------
Cash at bank and in hand and bank overdrafts
at end of the period 0.4 5.7 3.7
---------------------------------------------- ----- ------------- ------------- ----------
Cash at bank and in hand and bank overdrafts
at end of the period comprises:
Cash at bank and in hand and bank overdrafts
per the balance sheet 0.4 5.7 3.2
Cash at bank and in hand included within
assets classified as held-for-sale - - 0.5
---------------------------------------------- ----- ------------- ------------- ----------
0.4 5.7 3.7
---------------------------------------------- ----- ------------- ------------- ----------
Non-GAAP measures:
Underlying operating cash flow 3 11.6 10.2 20.3
---------------------------------------------- ----- ------------- ------------- ----------
* The results of previous periods have been restated where required to reflect discontinued operations.
Condensed consolidated statements of changes in equity
26 weeks ended 30 September 2014 (unaudited)
Ordinary Retained
share Share Treasury Translation earnings/
capital premium reserve reserve (losses) Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- -------- -------- -------- ----------- ---------- ------
At 31 March 2014 5.8 0.9 - (8.5) 67.3 65.5
Comprehensive income:
Profit for the period - - - - 4.8 4.8
Other comprehensive expense:
Actuarial loss on retirement
benefit obligations - - - - (14.8) (14.8)
Foreign currency translation
adjustments - - - (1.2) - (1.2)
Total other comprehensive
expense - - - (1.2) (14.8) (16.0)
----------------------------- -------- -------- -------- ----------- ---------- ------
Transactions with owners:
Dividends paid - - - - (2.0) (2.0)
Share option schemes
and warrants 0.1 - (0.1) - 0.6 0.6
----------------------------- -------- -------- -------- ----------- ---------- ------
At 30 September 2014 5.9 0.9 (0.1) (9.7) 55.9 52.9
----------------------------- -------- -------- -------- ----------- ---------- ------
26 weeks ended 30 September 2013 (unaudited)
Ordinary Retained
share Share Translation earnings/
capital premium reserve (losses) Total
GBPm GBPm GBPm GBPm GBPm
----------------------------- -------- -------- ----------- ---------- -----
At 31 March 2013 5.8 0.5 1.0 54.3 61.6
Comprehensive income:
Profit for the period - - - 0.5 0.5
Actuarial gain on retirement
benefit obligations - - - 2.4 2.4
Total other comprehensive
income - - - 2.9 2.9
----------------------------- -------- -------- ----------- ---------- -----
Other comprehensive expense:
Foreign currency translation
adjustments - - (6.6) - (6.6)
Transactions with owners:
Dividends paid - - - (1.8) (1.8)
Share option schemes
and warrants - - - 0.3 0.3
----------------------------- -------- -------- ----------- ---------- -----
At 30 September 2013 5.8 0.5 (5.6) 55.7 56.4
----------------------------- -------- -------- ----------- ---------- -----
52 weeks ended 31 March 2014 (audited)
Ordinary Retained
share Share Translation earnings/
capital premium reserve (losses) Total
GBPm GBPm GBPm GBPm GBPm
----------------------------- -------- -------- ----------- ---------- -----
At 31 March 2013 5.8 0.5 1.0 54.3 61.6
Comprehensive income:
Profit for the year - - - 8.7 8.7
Actuarial gain on retirement
benefit obligations - - - 6.2 6.2
Total other comprehensive
income - - - 14.9 14.9
----------------------------- -------- -------- ----------- ---------- -----
Other comprehensive expense:
Foreign currency translation
adjustments - - (9.5) - (9.5)
Transactions with owners:
Shares issued - 0.4 - - 0.4
Dividends paid - - - (2.8) (2.8)
Share option schemes
and warrants - - - 0.9 0.9
----------------------------- -------- -------- ----------- ---------- -----
At 31 March 2014 5.8 0.9 (8.5) 67.3 65.5
----------------------------- -------- -------- ----------- ---------- -----
Notes to the accounts
26 weeks ended 30 September 2014
1. Accounting policies
General information
The Company is a public limited company which is listed on the London Stock Exchange and incorporated and domiciled in the UK. This condensed consolidated interim financial information was approved for issue on 13 November 2014. This condensed consolidated financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006.
This condensed consolidated interim financial information has been neither audited nor reviewed.
Basis of preparation
This condensed consolidated interim financial information for the 26 weeks ended 30 September 2014 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim financial reporting', as adopted by the European Union.
The Directors consider, after making appropriate enquiries at the time of approving the condensed consolidated financial report, that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and, accordingly, that it is appropriate to adopt the going concern basis in the preparation of the condensed consolidated interim financial information.
The condensed consolidated interim financial information should be read in conjunction with the Annual Report and Accounts for the year ended 31 March 2014, which has been prepared in accordance with IFRS as adopted by the European Union. The Annual Report and Accounts was approved by the Board on 19 June 2014 and delivered to the Registrar of Companies. The report of the auditors on the financial statements was unqualified.
Accounting policies
The principal accounting policies applied in the preparation of this condensed consolidated interim financial information are included in the financial report for the year ended 31 March 2014. These policies have been applied consistently to all periods presented.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to the expected total annual profits or losses.
New standards, amendments to standards and interpretations
The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 April 2014.
The Group has adopted the following new standards, amendments and interpretations now applicable. None of these standards and interpretations has had any material effect on the Group's results or net assets.
Applicable
for
financial
years
beginning
Standard or interpretation Content on or after
-------------------------- -------------------------------------------------- ------------
Amendment to IFRS 10 Consolidated financial statements 1 April 2014
Amendment to IFRS 12 Disclosures of interests in other entities 1 April 2014
Amendment to IAS 27 Separate financial statements 1 April 2014
Amendment to IAS 32 Financial instruments: presentation 1 April 2014
Amendment to IAS 36 Impairment of assets 1 April 2014
Amendment to IAS 39 Financial instruments: recognition and measurement 1 April 2014
IFRIC 21 Levies 1 April 2014
-------------------------- -------------------------------------------------- ------------
The following standards, amendments and interpretations are not yet effective and have not been adopted early by the Group:
Applicable
for
financial
years
beginning
Standard or interpretation Content on or after
---------------------------- -------------------------------------------- ------------
Amendment to IAS 19 Employee benefits 1 April 2015
(revised)
Amendment to IFRS 10 Consolidated financial statements 1 April 2016
Amendment to IFRS 11 Joint arrangements 1 April 2016
IFRS 14 Regulatory deferral accounts 1 April 2016
Amendment to IAS 16 Property, plant and equipment 1 April 2016
Amendment to IAS 27 Separate financial statements 1 April 2016
Amendment to IAS 28 Investments in associates and joint ventures 1 April 2016
Amendment to IAS 38 Intangible assets 1 April 2016
Amendment to IAS 41 Agriculture 1 April 2016
Annual improvements
to IFRSs 2012 Various 1 April 2016
Annual improvements
to IFRSs 2014 Various 1 April 2016
IFRS 15 Revenue from contracts with customers 1 April 2017
IFRS 9 Financial instruments: classification 1 April 2018
and measurement
---------------------------- -------------------------------------------- ------------
None of these standards or interpretations is expected to have a material impact on the Group.
Risks and uncertainties
The principal strategic level risks and uncertainties affecting the Group, together with the approach to their mitigation, remain as set out on pages 22 to 25 in the 2014 Annual Report, which is available on the Group's website (www.norcros.com).
In summary the Group's principal risks and uncertainties are:
-- key commercial relationships; -- competition; -- reliance on production facilities; -- staff retention and recruitment; -- foreign currency exchange risk; -- interest rate risk; -- pension scheme management; -- energy price risk; -- additional capital requirements to fund ongoing operations; -- performance against banking covenants; -- changing consumer preferences; -- overseas operations; -- management of the property estate; and -- acquisition risk.
The Chairman's Statement in this condensed consolidated interim financial information includes comments on the outlook for the remaining six months of the financial year.
Forward-looking statements
This condensed consolidated interim financial information contains forward-looking statements. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements.
The Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Accounting estimates and judgments
The preparation of condensed consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the condensed consolidated interim financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 March 2014.
2. Segmental reporting
The Group operates in two main geographical areas: the UK and South Africa. All inter-segment transactions are made on an arm's length basis. The chief operating decision maker, which is considered to be the Board, assesses performance and allocates resources based on geography as each segment has similar economic characteristics, complementary products, distribution channels and regulatory environments.
Continuing operations - 26 weeks ended
30 September 2014 (unaudited)
--------------------------------------------
South
UK Africa Group
Notes GBPm GBPm GBPm
Revenue 72.8 35.8 108.6
------------------------- ---------- ------ ----------- ----------- ----------
Underlying operating
profit 6.4 1.0 7.4
Non-underlying operating
items 4 (1.0) - (1.0)
Exceptional operating
items 4 - - -
------------------------- ---------- ------ ----------- ----------- ----------
Operating profit 5.4 1.0 6.4
------------------------- ---------- ------ ----------- ----------- ----------
Finance costs (net) (0.1)
------------------------- ---------- ------ ----------- ----------- ----------
Profit before taxation 6.3
Taxation 6 (1.6)
------------------------- ---------- ------ ----------- ----------- ----------
Profit from continuing
operations 4.7
------------------------- ---------- ------ ----------- ----------- ----------
Net debt 10 (20.0)
------------------------- ---------- ------ ----------- ----------- ----------
Continuing operations - 26 weeks ended
30 September 2013 (unaudited)
--------------------------------------------
South
UK Africa Group
Notes GBPm GBPm GBPm
Revenue 72.8 38.4 111.2
------------------------- ---------- ------ ----------- ---------- -------------
Underlying operating
profit 5.9 0.7 6.6
Non-underlying operating
items 4 (1.0) - (1.0)
Exceptional operating
items 4 (1.6) 0.4 (1.2)
------------------------- ---------- ------ ----------- ---------- -------------
Operating profit 3.3 1.1 4.4
------------------------- ---------- ------ ----------- ---------- -------------
Finance costs (net) (4.1)
------------------------- ---------- ------ ----------- ---------- -------------
Profit before taxation 0.3
Taxation 6 -
------------------------- ---------- ------ ----------- ---------- -------------
Profit from continuing
operations 0.3
------------------------- ---------- ------ ----------- ---------- -------------
Net debt 10 (28.8)
------------------------- ---------- ------ ----------- ---------- -------------
Continuing operations - 52 weeks ended
31 March 2014 (audited)
------------------------------------------
South
UK Africa Group
Notes GBPm GBPm GBPm
Revenue 148.0 70.7 218.7
------------------------- ----- ----------- --------------- ------------
Underlying operating
profit 14.2 1.9 16.1
Non-underlying operating
items 4 (1.8) - (1.8)
Exceptional operating
items 4 (1.9) 0.4 (1.5)
------------------------- ----- ----------- --------------- ------------
Operating profit 10.5 2.3 12.8
------------------------- ----- ----------- --------------- ------------
Finance costs (net) (7.0)
------------------------- ----- ----------- --------------- ------------
Profit before taxation 5.8
Taxation 6 4.3
------------------------- ----- ----------- --------------- ------------
Profit from continuing
operations 10.1
------------------------- ----- ----------- --------------- ------------
Net debt 10 (26.9)
------------------------- ----- ----------- --------------- ------------
There are no differences from the last Annual Report in the basis of segmentation or in the basis of measurement of segment profit or loss.
3. Non-GAAP measures
Condensed Consolidated Income Statement
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------- ------------- ------------- ----------
Profit before taxation from continuing
operations 6.3 0.3 5.8
Adjusted for:
Non-underlying operating items 1.0 1.0 1.8
Exceptional operating items - 1.2 1.5
Amortisation of costs of raising debt
finance 0.1 0.2 0.3
Amortisation of costs of raising debt
finance - exceptional 0.4 - -
Net movement on fair value of derivative
financial instruments (1.6) 2.5 3.7
Discount on property lease provisions - 0.1 0.2
IAS 19R finance cost 0.5 0.6 1.3
----------------------------------------- ------------- ------------- ----------
Underlying profit before taxation 6.7 5.9 14.6
Taxation attributable to underlying
profit before taxation (1.7) (0.8) 2.4
----------------------------------------- ------------- ------------- ----------
Underlying earnings 5.0 5.1 17.0
----------------------------------------- ------------- ------------- ----------
The Directors believe that underlying profit before taxation and underlying earnings provide shareholders with additional useful information on the underlying performance of the Group. Underlying profit before taxation is defined as profit before taxation, non-underlying operating items, exceptional operating items, exceptional finance costs, amortisation of costs of raising finance, net movement on fair value of derivative financial instruments, discounting of property lease provisions and finance costs relating to pension schemes.
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------------------- ------------- ------------- ----------
Operating profit from continuing operations 6.4 4.4 12.8
Adjusted for:
Depreciation 3.0 3.0 5.9
Non-underlying operating items 1.0 1.0 1.8
Exceptional operating items - 1.2 1.5
-------------------------------------------- ------------- ------------- ----------
Underlying EBITDA 10.4 9.6 22.0
-------------------------------------------- ------------- ------------- ----------
EBITDA is a measure commonly used by investors and financiers to assess business performance. Underlying EBITDA has been provided which reflects EBITDA as adjusted for non-underlying and exceptional operating items. The Directors consider that these measures provide shareholders with additional useful information on the performance of the Group.
Condensed Consolidated Statement of Cash Flows
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------------------- ------------- ------------- ----------
Cash generated from continuing operations
(note 10) 9.9 6.6 13.9
Adjusted for:
Cash outflows from exceptional items 0.7 2.6 4.4
Pension fund deficit recovery contributions 1.0 1.0 2.0
-------------------------------------------- ------------- ------------- ----------
Underlying operating cash flow 11.6 10.2 20.3
-------------------------------------------- ------------- ------------- ----------
Underlying operating cash flow is defined as cash generated from continuing operations before cash outflows from exceptional items and pension fund deficit recovery contributions.
The Directors believe that underlying operating cash flow provides shareholders with additional useful information on the underlying cash generation of the Group.
4. Non-underlying and exceptional operating items
As described in note 3, the Directors believe that underlying profit before taxation and underlying earnings provide shareholders with additional useful information on the underlying performance of the Group. In order to arrive at underlying profit before taxation and underlying earnings, certain items including non-underlying and exceptional operating items have been excluded.
An analysis of non-underlying and exceptional operating items is shown below.
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------------- ------------- ------------- ----------
Non-underlying operating items
IAS 19R pension administration expenses(1) 0.8 0.8 1.4
Intangible asset amortisation(2) 0.2 0.2 0.4
------------------------------------------- ------------- ------------- ----------
1.0 1.0 1.8
------------------------------------------- ------------- ------------- ----------
1 The implementation of IAS 19R, 'Employee benefits', has required that certain costs of administering the Group's pension schemes are recognised in the income statement.
2 Following the acquisition of Vado in 2013, the Group recognised an intangible asset which is subject to a non-cash amortisation charge.
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------------ ------------- ------------- ----------
Exceptional operating items
Profit on disposal of surplus property(1) (0.4) (0.5) (0.5)
Restructuring costs(2) - 1.5 1.5
Deferred remuneration(3) 0.3 0.2 0.3
Legal costs(4) 0.1 - 0.2
- 1.2 1.5
------------------------------------------ ------------- ------------- ----------
1 A profit of GBP0.4m was generated in the period following the sale of a small parcel of land in Braintree, UK. During the previous period the Group disposed of a residual manufacturing facility in South Africa generating a profit of GBP0.5m.
2 Restructuring costs related to redundancies and asset write-downs as a result of restructuring initiatives throughout the Group's business units.
3 In accordance with IFRS 3R, a significant proportion of deferred consideration payable to the former shareholders of Vado is required to be treated as remuneration and, accordingly, is expensed to the income statement as incurred.
4 Legal costs related to the ongoing dispute over the disposal of the surplus land at the Highgate site in Tunstall, UK.
5. Earnings per share
Basic and diluted earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year, excluding those held in the Norcros Employee Benefit Trust. For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive ordinary shares. The calculation of EPS is based on the following profits and numbers of shares:
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------------- ------------- ------------- ----------
Profit for the period from continuing
operations 4.7 0.3 10.1
Profit/(loss) for the period from discontinued
operations 0.1 0.2 (1.4)
----------------------------------------------- ------------- ------------- ----------
Profit for the period 4.8 0.5 8.7
----------------------------------------------- ------------- ------------- ----------
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
number number number
-------------------------------------- ------------- ------------- -----------
Weighted average number of shares for
basic earnings per share 589,593,699 583,188,384 583,950,031
Share options and warrants 21,595,473 19,654,417 24,374,489
Weighted average number of shares for
diluted earnings per share 611,189,172 602,842,801 608,324,520
-------------------------------------- ------------- ------------- -----------
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
----------------------------- ------------- ------------- ----------
Basic earnings per share:
From continuing operations 0.8p 0.1p 1.7p
From discontinued operations - - (0.2p)
----------------------------- ------------- ------------- ----------
From profit for the period 0.8p 0.1p 1.5p
----------------------------- ------------- ------------- ----------
Diluted earnings per share:
From continuing operations 0.8p 0.1p 1.6p
From discontinued operations - - (0.2p)
----------------------------- ------------- ------------- ----------
From profit for the period 0.8p 0.1p 1.4p
----------------------------- ------------- ------------- ----------
Basic and diluted underlying earnings per share
Basic and diluted underlying earnings per share has also been provided which reflects underlying earnings from continuing operations divided by the weighted average number of shares set out above.
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------- ------------- ------------- ----------
Underlying earnings for the period (note
3) 5.0 5.1 17.0
----------------------------------------- ------------- ------------- ----------
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
-------------------------------------- ------------- ------------- ----------
Basic underlying earnings per share 0.8p 0.9p 2.9p
Diluted underlying earnings per share 0.8p 0.9p 2.8p
-------------------------------------- ------------- ------------- --------------
6. Taxation
Taxation comprises:
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------------- ------------- ------------- ----------
Current
UK taxation 0.5 0.4 1.1
Deferred
Origination and reversal of temporary
differences 1.1 (0.4) (5.4)
-------------------------------------- ------------- ------------- ----------
Taxation 1.6 - (4.3)
-------------------------------------- ------------- ------------- ----------
Current tax expense is recognised based on management's estimate of the weighted average annual income tax rate expected for the full financial year.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. Deferred tax is calculated in full on temporary differences under the liability method.
The movement on the deferred tax account is as shown below:
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------------------- ------------- ------------- ----------
Deferred tax asset at the beginning of
the period 11.6 8.7 8.7
(Charged)/credited to the income statement (1.1) 0.4 5.4
Credited/(charged) to statement of comprehensive
income 3.7 (1.3) (2.5)
Exchange movement (0.1) - -
Deferred tax asset at the end of the
period 14.1 7.8 11.6
------------------------------------------------- ------------- ------------- ----------
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- ----------
Accelerated capital allowances 2.9 0.4 3.0
Tax losses 3.8 2.5 4.5
Other timing differences (0.7) (0.7) (0.3)
Deferred tax asset relating to pension
deficit 8.1 5.6 4.4
--------------------------------------- ------------- ------------- ----------
14.1 7.8 11.6
--------------------------------------- ------------- ------------- ----------
7. Finance income and costs
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------------- ------------- ------------- ----------
Finance costs
Interest payable on bank borrowings 0.7 0.7 1.5
Amortisation of costs of raising debt
finance 0.1 0.2 0.3
Movement on fair value of derivative
financial instruments - 2.5 3.7
Unwind of discount on property lease
provisions - 0.1 0.2
-------------------------------------- ------------- ------------- ----------
Finance costs 0.8 3.5 5.7
-------------------------------------- ------------- ------------- ----------
Exceptional finance costs(1) 0.4 - -
-------------------------------------- ------------- ------------- ----------
Total finance costs 1.2 3.5 5.7
-------------------------------------- ------------- ------------- ----------
Finance income
Movement on fair value of derivative
financial instruments (1.6) - -
-------------------------------------- ------------- ------------- ----------
Total finance income (1.6) - -
-------------------------------------- ------------- ------------- ----------
1 Following the refinancing of the Group's banking facilities in July 2014, the unamortised costs relating to the previous facility were written off in full.
8. Borrowings
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
--------------------------------------------- ------------- ------------- ----------
Non-current
Bank borrowings (unsecured):
- bank loans 21.0 35.0 31.0
- less: costs of raising finance (0.6) (0.6) (0.5)
--------------------------------------------- ------------- ------------- ----------
Total non-current 20.4 34.4 30.5
--------------------------------------------- ------------- ------------- ----------
Current
Bank borrowings (unsecured):
- finance leases and hire purchase contracts - 0.1 0.1
- bank overdrafts 4.1 - 0.7
--------------------------------------------- ------------- ------------- ----------
Total current 4.1 0.1 0.8
--------------------------------------------- ------------- ------------- ----------
Total borrowings 24.5 34.5 31.3
--------------------------------------------- ------------- ------------- ----------
The fair value of bank loans equals their carrying amount as they bear interest at floating rates.
The repayment terms of borrowings are as follows:
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------- ------------- ------------- ----------
Not later than one year 4.1 0.1 0.8
------------------------------------- ------------- ------------- ----------
After more than one year:
- between one and two years - - 31.0
- later than two years and not later
than five years 21.0 35.0 -
- costs of raising finance (0.6) (0.6) (0.5)
------------------------------------- ------------- ------------- ----------
20.4 34.4 30.5
------------------------------------- ------------- ------------- ----------
Total borrowings 24.5 34.5 31.3
------------------------------------- ------------- ------------- ----------
In July 2014 the Group agreed a new unsecured GBP70m revolving credit facility with a GBP30m accordion facility with Lloyds Bank plc, Barclays Bank plc and HSBC Bank plc. The new banking facility is in force for five years to July 2019.
Net debt
The Group's net debt is calculated as follows:
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------------ ------------- ------------- ----------
Cash and cash equivalents (4.5) (5.7) (3.9)
Cash and cash equivalents included within
assets classified as held-for-sale - - (0.5)
Total borrowings 24.5 34.5 31.3
------------------------------------------ ------------- ------------- ----------
Net debt 20.0 28.8 26.9
------------------------------------------ ------------- ------------- ----------
9. Called up share capital
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- ----------
Issued and fully paid
594,917,377 ordinary shares of 1p each 5.9 5.8 5.8
--------------------------------------- ------------- ------------- ----------
During the period the Company issued 6,997,419 ordinary shares to the Norcros Employee Benefit Trust in order to satisfy vestings of options under the Company's Approved Performance Share Plan. A further 34,467 ordinary shares were issued to members of a SAYE scheme who exercised options during the period.
10. Consolidated Cash Flow Statements
(a) Cash generated from continuing operations
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------------ ------------- ------------- ----------
Profit before taxation 6.3 0.3 5.8
Adjustments for:
- non-underlying operating items included
in the above 1.0 1.0 1.8
- exceptional operating items included
in the above - 1.2 1.5
- cash outflows from exceptional items (0.7) (2.6) (4.4)
- depreciation 3.0 3.0 5.9
- difference between current service
cost and normal pension contributions - - (0.1)
- pension fund deficit recovery plan
contributions (1.0) (1.0) (2.0)
- profit on disposal of property, plant
and equipment - 0.1 0.1
- total finance costs 1.2 3.5 5.7
- finance income (1.6) - -
- IAS 19R finance cost 0.5 0.6 1.3
- share-based payments 0.6 0.3 0.9
------------------------------------------ ------------- ------------- ----------
Operating cash flows before movements
in working capital 9.3 6.4 16.5
Changes in working capital:
- increase in inventories (1.4) (5.7) (5.7)
- increase in trade and other receivables (0.8) (1.7) (1.9)
- increase in payables 2.8 7.6 5.0
------------------------------------------ ------------- ------------- ----------
Cash generated from continuing operations 9.9 6.6 13.9
------------------------------------------ ------------- ------------- ----------
Cash flows from exceptional items includes expenditure utilised against exceptional provisions created in prior periods relating to onerous property leases, acquisition fees, business rationalisation and restructuring including severance and other employee costs.
(b) Cash generated from discontinued operations
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------------- ------------- ------------- ----------
Profit before taxation - 0.2 0.2
Adjustments for:
- depreciation - 0.1 0.1
Operating cash flows before movements
in working capital - 0.3 0.3
Changes in working capital:
- decrease/(increase) in inventories 0.4 (0.4) (0.4)
- increase in trade and other receivables (0.1) (0.4) (0.2)
- (decrease)/increase in payables (0.2) 0.4 -
------------------------------------------- ------------- ------------- ----------
Cash generated from/(used in) discontinued
operations 0.1 (0.1) (0.3)
------------------------------------------- ------------- ------------- ----------
Cash generated from operations 10.0 6.5 13.6
------------------------------------------- ------------- ------------- ----------
(c) Analysis of net debt
Cash included
within assets
held-for-sale Cash and overdrafts Debt Total
GBPm GBPm GBPm GBPm
--------------------------- -------------- ------------------- ------ ------
At 1 April 2013 - 6.4 (37.1) (30.7)
Reclassification to assets
held-for-sale 1.0 (1.0) - -
Cash flow (0.3) (1.6) 6.9 5.0
Other non-cash movements - - (0.4) (0.4)
Exchange movement (0.2) (0.6) - (0.8)
--------------------------- -------------- ------------------- ------ ------
At 31 March 2014 0.5 3.2 (30.6) (26.9)
--------------------------- -------------- ------------------- ------ ------
At 1 April 2013 - 6.4 (37.1) (30.7)
Cash flow - (0.2) 2.8 2.6
Other non-cash movements - - (0.2) (0.2)
Exchange movement - (0.5) - (0.5)
--------------------------- -------------- ------------------- ------ ------
At 30 September 2013 - 5.7 (34.5) (28.8)
--------------------------- -------------- ------------------- ------ ------
At 1 April 2014 0.5 3.2 (30.6) (26.9)
Cash flow (0.5) (2.7) 10.1 6.9
Other non-cash movements - - 0.1 0.1
Exchange movement - (0.1) - (0.1)
--------------------------- -------------- ------------------- ------ ------
At 30 September 2014 - 0.4 (20.4) (20.0)
--------------------------- -------------- ------------------- ------ ------
11. Dividends
A final dividend in respect of the year ended 31 March 2014 of GBP2.0m (0.34p per share) was paid on 30 July 2014. On 13 November 2014 the Board declared an interim dividend in respect of the year ended 31 March 2015 of GBP1.1m (0.185p per share). This dividend will be paid on 7 January 2015 and is not reflected in this condensed consolidated interim financial information.
12. Retirement benefit obligations
(a) Pension costs
Norcros Security Plan
The Norcros Security Plan (the Plan), the principal UK pension scheme of Norcros plc subsidiaries, is funded by a separate trust fund which operates under UK trust law and is a separate legal entity from the Company. The Plan is governed by a Trustee board which is required by law to act in the best interests of the Plan members and is responsible for setting policies together with the Company. It is predominantly a defined benefit scheme with a modest element of defined contribution benefits.
The valuation used for IAS 19R disclosures has been produced by KPMG, a firm of qualified actuaries, to take account of the requirements of IAS 19R in order to assess the liabilities of the scheme at 30 September 2014. Scheme assets are stated at their market value at 30 September 2014.
(b) IAS 19R, 'Retirement benefit obligations'
The principal assumptions used to calculate the scheme liabilities of the Norcros Security Plan under IAS 19R are:
At At At
30 September 30 September 31 March
2014 2013 2014
--------------------- ------------- ------------- ---------
Discount rate 3.90% 4.30% 4.30%
Inflation rate (RPI) 3.05% 3.10% 3.20%
Inflation (CPI) 2.05% 2.10% 2.20%
Salary increases 3.30% 3.35% 3.45%
--------------------- ------------- ------------- ---------
The amounts recognised in the Condensed Consolidated Balance Sheet are determined as follows:
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------------ ------------- ------------- ----------
Total market value of scheme assets 385.0 381.4 383.8
------------------------------------ ------------- ------------- ----------
Present value of scheme liabilities (425.6) (407.9) (405.6)
------------------------------------ ------------- ------------- ----------
Pension deficit (40.6) (26.5) (21.8)
Comprising:
- Norcros Security Plan (40.6) (26.6) (21.8)
- other - 0.1 -
------------------------------------ ------------- ------------- ----------
Pension deficit (40.6) (26.5) (21.8)
------------------------------------ ------------- ------------- ----------
13. Discontinued operations and assets held-for-sale
On 25 March 2014, the Company entered into a conditional agreement to dispose of 100% of the issued share capital of Norcros Industry (Pty) Limited (NIPL), which owns its Australian tiles business, to Kim Hin Industries Berhad (KHIB). As KHIB is listed on the Malaysian Bursa, it required shareholder approval to allow the transaction to take place, and this was duly received allowing the disposal to be completed on 30 May 2014. Consequently, NIPL was classified as held-for-sale in the Consolidated Balance Sheet at 31 March 2014.
In accordance with IFRS 5, an impairment loss of GBP1.5m to remeasure the carrying value of the assets to fair value less costs to sell was recognised following the reclassification of the net assets of NIPL as held-for-sale in the year ended 31 March 2014. Including an estimated tax charge arising from the transaction of GBP0.1m, a total loss on disposal of GBP1.6m was anticipated. Following the completion of the transaction, the Company made an actual loss on disposal of GBP1.5m. Taking into account the loss of GBP1.6m reflected in the income statement in the year ended 31 March 2014, this means that a profit of GBP0.1m was recognised in the period. The actual loss on disposal of GBP1.5m is calculated as follows:
GBPm
Property, plant and equipment 1.8
Inventories 3.1
Trade and other receivables 1.4
Cash 0.6
Trade and other payables (1.2)
Net assets disposed of 5.7
----------------------------------------------- ------
Disposal proceeds:
Cash 4.7
Less: directly attributable costs (0.3)
Net proceeds 4.4
----------------------------------------------- ------
Loss on disposal before tax and recycling
of foreign exchange (1.3)
----------------------------------------------- ------
Tax charge on loss on disposal (0.1)
----------------------------------------------- ------
Loss on disposal before recycling of
foreign exchange (1.4)
----------------------------------------------- ------
Recycling of foreign exchange (0.1)
Loss on disposal (1.5)
----------------------------------------------- ------
The net cash inflow from the disposal, reported in investing activities, was as follows:
GBPm
Disposal proceeds 4.7
Directly attributable costs (0.3)
Cash divested (0.6)
Net cash inflow 3.8
--------------------------------- ------
As NIPL represented a major line of business for the Group and was classified as held-for-sale in the year ended 31 March 2014, its operations have been treated as discontinued with a single amount shown on the face of the Condensed Consolidated Income Statement. As NIPL is no longer classed as a continuing operation the prior periods have also been restated to conform to this style of presentation. The table below provides further detail of the amount presented in the Condensed Consolidated Income Statement.
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------------- ------------- ------------- ----------
Revenue 1.8 5.5 10.6
----------------------------------------------- ------------- ------------- ----------
Expenses (1.8) (5.3) (10.4)
----------------------------------------------- ------------- ------------- ----------
Profit before tax and loss recognised
on remeasurement to fair value less
costs to sell - 0.2 0.2
----------------------------------------------- ------------- ------------- ----------
Loss recognised on remeasurement to
fair value less costs to sell - - (1.5)
Tax charge on loss recognised on remeasurement
to fair value less costs to sell - - (0.1)
Loss on disposal (1.5) - -
Reversal of loss recognised on remeasurement
to fair value (including associated
tax charge) 1.6 - -
Profit/(loss) for the period from discontinued
operations 0.1 0.2 (1.4)
----------------------------------------------- ------------- ------------- ----------
The net cash flows of NIPL reported in the Condensed Consolidated Statement of Cash Flow are as follows.
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
---------------------------------- ------------- ------------- ----------
Operating activities (note 10(b)) 0.1 (0.1) (0.3)
Investing activities 3.8 - -
---------------------------------- ------------- ------------- ----------
Net cash inflow/(outflow) 3.9 (0.1) (0.3)
---------------------------------- ------------- ------------- ----------
The total comprehensive income and expense of NIPL reported in the Condensed Consolidated Statement of Comprehensive Income are as follows:
At At At
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
--------------------------------------------- ------------- ------------- ----------
Profit/(loss) for the year from discontinued
operations 0.1 0.2 (1.4)
Foreign currency translation adjustments 0.1 (0.8) (0.9)
--------------------------------------------- ------------- ------------- ----------
Total comprehensive income/(expense)
from discontinued operations 0.2 (0.6) (2.3)
--------------------------------------------- ------------- ------------- ----------
14. Principal subsidiaries
The principal Group subsidiaries and associates are disclosed below. Transactions between subsidiaries and between the Parent Company and its subsidiaries are eliminated on consolidation.
United Kingdom
-- Norcros Group (Holdings) Limited (incorporated in the United Kingdom)
Overseas
-- Norcros SA (Pty) Limited* trading as Johnson Tiles South Africa, TAL and Tile Africa (incorporated in South Africa)
* The Group interest is owned by Group companies other than Norcros plc.
Notes
All companies are 100% owned and operate principally in the countries in which they are incorporated.
Only those subsidiary undertakings whose results principally affect the financial statements of the Group are included above.
15. Related party transactions
The following transactions were carried out with related parties:
Purchases of goods and services
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------- -------------- ------------- ----------
Purchases of goods:
- Prism Cement Limited N/A 0.6 0.6
----------------------- -------------- ------------- ----------
Goods are purchased from related parties on normal commercial terms and conditions.
Prism Cement Limited was classed as a related party due to the fact that one of its directors, Vijay Aggarwal, was also a Director of the Company, and one of its subsidiaries, Lifestyle Investments PVT Limited, owned 29.6% of the Company's issued share capital as of 1 April 2013. On 11 April 2013, Lifestyle Investments PVT Limited sold 27,000,000 ordinary shares to reduce its holding in the Company to 24.97%, and on 18 September 2013, sold the remainder of its holding in the Company and consequently ceased to be a related party from that date. Additionally, Mr Aggarwal ceased to be a Director of the Company from 20 September 2013.
Prior to the divestment, dividends of GBP0.4m were paid to Lifestyle Investments PVT Limited.
16. Post-balance sheet events
As announced on 7 November 2014 the Group exited its legacy lease and acquired the freehold of the property at Orgreave Drive, Sheffield, for a consideration of GBP3.4m including costs. The lease had 68 years to run and the exit will reduce annual cash outflows by GBP0.4m. It is anticipated that an exceptional charge of approximately GBP2.5m relating to this transaction will be recognised in the second half of the year.
Statement of Directors' responsibilities
The Directors confirm that this condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34, 'Interim financial reporting', as adopted by the European Union and that the Interim Report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed consolidated interim financial information and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related party transactions in the first six months and any changes in the related party transactions disclosed in the last Annual Report.
The Directors of Norcros plc are listed on the Group's website (www.norcros.com/about_us/our_board_and_management/).
By order of the Board
N. P. Kelsall M. K. Payne Group Chief Executive Group Finance Director 13 November 2014 13 November 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRBDBLXBBGSD
1 Year Norcros Chart |
1 Month Norcros Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
