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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| 600 Group Plc | LSE:SIXH | London | Ordinary Share | GB0008121641 | 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% | 2.65 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Industrial Mach & Eq-whsl | 68.98M | 1.27M | 0.0108 | 2.45 | 3.11M |
From Apr 2019 to Apr 2024
TIDMSIXH
RNS Number : 6271I
600 Group PLC
01 September 2016
The 600 Group PLC
Full Year Results for the year ended 2 April 2016
The 600 Group PLC ("the Group"), the AIM listed distributor, designer and manufacturer of industrial products (AIM: SIXH), today announces its full year results for the year ended 2 April 2016.
The Group has continued to implement structural changes in both its operating divisions to give it a greater opportunity to grow in existing and new markets from a reduced cost base. This included an expanded integration programme for the TYKMA Electrox laser business. In the machine tools sector however market conditions were challenging throughout the year and despite the necessary actions to reduce costs, expand markets in Asia and the improved trading levels achieved in the USA there was a weaker than expected performance in the UK and Europe.
Over 60% of the Group's activities are now conducted in the USA and these businesses are the main profit drivers of the Group. The dollar income from these activities gives a natural hedge against the majority of purchases which are in dollars. In the year 13% of Group sales were to EU countries and the Group is firmly focused on developing new markets outside of this area particularly in South East Asia.
CORPORATE AND OPERATIONAL HIGHLIGHTS
-- Integration of the UK and US laser businesses reduced the overall cost base significantly
-- Manufacturing operations ceased in Letchworth and building sold post year end for GBP2m
-- David Grimes, CEO of TYKMA became a significant shareholder in the 600 Group following the acquisition of the remaining 20% of TYKMA
-- Clausing brand of machine tools well received in the UK, European and Australian markets
-- Strengthened distribution network in the Australia, Thailand, Vietnam, Malaysia, Singapore and the Philippines
-- US machine tool business continues to increase domestic market share
-- Updated supply agreement signed with Taiwanese machine tool supplier and, agreement signed for manufacture and distribution under licence in India
FINANCIAL HIGHLIGHTS
-- Profit for period GBP1.15m (2015: GBP2.35m) -- Underlying profit before tax* GBP1.48m (2015: GBP2.01m) -- Earnings per share 1.26p (2015: 2.66p) -- Underlying earnings per share* of 1.69p (2015: 2.09p) -- Revenues increased by 3% to GBP45.3m (2015: GBP43.8m) -- Group net operating margin* of 5.2% (2015: 5.6%) -- Increased UK Banking facilities agreed up to GBP4.95m.
* From continuing activities, before special items
Commenting today, Paul Dupee, Executive Chairman of The 600 Group PLC said:
"Despite the difficult trading environment which we have experienced this past year we have taken the necessary actions to maintain if not improve the performance of the operating subsidiaries in the USA and UK as well as improve the financial strength of the company. We maintain a strong market position thanks to our industry recognised brands and are taking active steps to increase our worldwide distribution network to accelerate revenue growth. This we expect, coupled with the reduction in overheads, will yield better margins on increased sales in the future."
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SUMMARY OF FINANCIAL RESULTS FY16 FY15
GBPm GBPm
Revenues 45.27 43.79
Underlying Operating profit* 2.36 2.46
Bank and other interest (0.88) (0.45)
Underlying Profit before taxation* 1.48 2.01
Special items (net) (0.47) 1.67
Profit before taxation 1.01 3.68
Taxation credit/(charge) 0.14 (1.33)
Total profit for the year 1.15 2.35
Earnings per share
Underlying basis* 1.69p 2.09p
Total for the year 1.26p 2.66p
* From continuing activities, before special items
More Information on the group can be viewed at: www.600group.com
Enquiries:
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The 600 Group PLC Tel: 01924 415000
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Paul Dupee, Executive Chairman
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Neil Carrick, Finance Director
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Spark Advisory Partners Limited Tel: 020 3368 3553
(NOMAD)
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Sean Wyndham-Quin/ Miriam Greenwood
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Cadogan PR Limited (Financial PR) Tel: 020 7499 5002 / 07771
713608
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Alex Walters
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FinnCap (Broker) Tel: 020 7600 1658
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Tony Quirke/Mia Gardiner (Sales/Broking)
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Chairman's statement
I am pleased to report that we have continued to implement structural changes in both our operating divisions to give the Group a greater opportunity to grow in existing and new markets from a reduced cost base.
The financial benefits of these actions began to be evident in the final few months of the 2016 financial year. The improvement in profitability was, however, delayed by a number of factors including the expanded integration programme for the TYKMA Electrox business and the costs associated with staff reductions in the UK. In addition, like many other companies in the sector, we were also affected by the challenging market conditions in the machine tool sector with a much weaker than expected performance in the UK and Europe.
The integration of the two laser businesses has reduced their overall cost base significantly and we have achieved further efficiencies by revising the supply chain and closing down the Electrox manufacturing operation in Letchworth, UK. We consolidated the two businesses onto a single site in Ohio, USA and whilst this proved to be more disruptive and expensive than we first envisaged it is now trading satisfactorily under David Grimes, who became a significant shareholder in the 600 Group following the acquisition of the remaining 20% of TYKMA not already owned in late March 2016.
The integration of TYKMA and Electrox has given the Industrial lasers division worldwide credibility and initial sales have already been made to a number of multi-national corporations. The joint TYKMA Electrox brand now provides laser solutions across a number of industrial laser applications including marking, engraving and micro-material processing.
The performance of our US and Australian machine tool businesses in the period matched their performance of last year which we consider to be quite an achievement considering the difficult state of the markets. However, business conditions in the UK and Europe were very fragile and we took the necessary steps to restructure our activities and reduce our cost base accordingly.
I'm pleased to report that following the appointment of Don Haselton as Managing Director for the machine tools division in August 2015 we have had a good initial response in establishing the Clausing brand of machine tools in the UK, European and Australian markets. Additional resources have been put into sales and marketing for the Colchester, Harrison, Clausing, Pratt Burnerd and Gamet brands and we expect to see continuing improvement in market penetration and revenues as a result of these initiatives.
Since the start of the new financial year our Australian machine tool business has experienced a significant increase in activity. We have expanded our distribution network in the Australian state of Victoria, along with new distributors in Thailand, Vietnam and Malaysia and strengthened our existing distribution relationships in Singapore and the Philippines. We expect these improvements in Australia and South East Asia to continue throughout the fiscal year.
The UK and European markets continue to be challenged by weak economic growth and depressed commodity prices. We have restructured the production operation to provide resources to strengthen the sales and marketing organization. We have seen improvements in market share for the Colchester and Harrison brands in addition to the introduction of the Clausing brand. We expect these improvements to also continue throughout the current fiscal year.
The US market has also been challenged by weak economic growth. The AMT (Association for Manufacturing Technology) reports Manufacturing Technology Orders on a monthly basis. This report shows a decrease in order activity of 17.5% in 2015 with an additional decrease of 16.4% through June 2016. The U.S. Presidential campaign has created further uncertainty. Despite these economic headwinds, the US machine tool business continues to increase market share. Utilisation of contract manufacturing has enabled Clausing to capitalise upon the successful introduction of US built drills with the addition of sawing products. US production of additional product lines is planned for the next few years.
We have signed an updated supply agreement with our important Taiwanese machine tool supplier and, in addition, entered into a supply and distribution agreement with an Indian manufacturer for supply of machine tools and manufacture and distribution under licence in India of our branded products. These important initiatives reduce risk, expand our product offering and increase market coverage of our brands.
Although it is very early to speculate on the effect that the UK leaving the EU may have in the coming year, we would ask shareholders to consider a number of important factors which we believe reduce the risks for the Group associated with this new trading environment. Over 60% of the Group's activity is currently conducted in the USA and these businesses are the main profit drivers of the Group. Furthermore, the dollar income we receive gives us a natural hedge against the majority of our purchases which are in dollars.
In the last year only 13% of Group sales were to EU countries and as I have outlined above we are firmly focused on developing new markets outside of this area particularly in South East Asia. Over 15% of our total revenues are derived from the supply of spares parts and services and this is not dependent on achieving new sales but simply servicing our existing client base. Lastly, the growth of our global industrial laser systems business is largely driven by legislative changes and the requirement for traceability both of which are increasing worldwide irrespective of the situation in the UK.
Financial Overview
Revenue from continuing operations was GBP45.3m (2015: GBP43.8m) a 3.4% increase on the previous year.
After taking account of interest, taxation, pensions credits and other special items, the Group profit for the financial year was GBP1.15m (2015: GBP2.35m).
Underlying profit (before special items) amounted to GBP1.54m (2015: GBP1.85m) resulting in underlying earnings of 1.69p per share (2015: 2.09p) and total earnings were 1.26p per share (2015: 2.66p).
At the end of the financial year, group net indebtedness stood at GBP13.89m (2015: GBP10.80m), and gearing was 34% (2015: 31%). In addition to the acquisition of the remaining 20% of TYKMA during the year we have invested in new facilities, products and working capital to support our strategic growth plans. At the end of the year the group had financial headroom on the then existing borrowing facilities of GBP3.30m and had complied with all financial covenants in place throughout the year.
I am pleased to report that following the disposal of the Letchworth premises we restructured our UK banking arrangement and new increased facilities were agreed with HSBC in the UK in August 2016 which will provide more flexible support for the Group going forward.
In the USA Bank of America have continued to be very supportive, providing facilities to fund the $1.8m cash element of the TYKMA 20% acquisition and renewal of ongoing working capital facilities for both TYKMA and Clausing.
Acquisitions
At the end of March 2016 we acquired the remaining 20% of TYKMA, the US based industrial laser business we had acquired 80% of in February 2015. The consideration for this was satisfied by the issue of 12m shares in the Group and $1.8m in cash. TYKMA has been fully integrated with Electrox, the 600 Group's original laser business, during the current financial year and the combined business now operates under the TYKMA Electrox brand.
Facilities
In the USA we successfully re-located the Clausing machine tools business to new purpose built leasehold premises in Kalamazoo, Michigan and TYKMA re-located, again to purpose built leasehold premises, in Chillicothe Ohio. These new sites are better located with excellent road links and significantly improved facilities. To the credit of our management teams and their planning there was no significant impact on trading during the period of the moves. At the beginning of July we completed the sale of our Letchworth long leasehold site for GBP2.0m, with the much reduced UK laser operation moving to a new leasehold site in Letchworth.
People
On behalf of the Board I would like to thank all our employees for their ongoing support, commitment and dedication to The 600 Group which has been so important in the last year and I look forward to working with them again in the coming year.
Dividends
The Board continues to believe that the retention of earnings for deployment in the business is the most appropriate use of available financial resources. Accordingly they do not recommend the payment of a dividend at the present time.
Outlook
Trading in the period since the FY16 financial year end has been in line with the Board's expectations. The 600 Group is in the process of leveraging our industry recognised brands through an increased worldwide distribution network to accelerate revenue growth. We expect that the actions taken to reduce overheads and become more efficient will yield better margins on increased sales in the future.
Paul Dupee
Chairman
31 August 2016
Strategic report
Our business
The 600 Group PLC ("the Group") is a leading engineering group with a world class reputation in the design and distribution of machine tools, the design and manufacture of precision engineered components and the design, manufacture and distribution of industrial laser systems. The Group operates these businesses from locations in North America, Europe and Australia selling into more than 180 countries worldwide.
During the 53 week period ended 2 April 2016 31% of revenues came from the sale of metal turning machine tools, with a further 17% from other machine tools and 11% from the sale of precision engineered components. Sales of Industrial laser equipment amounted to 26% with the remaining 15% of revenues being from after sales support, spare parts and services from both divisions.
Group businesses serve customers across a broad range of industry sectors, from niche markets for technical education of young engineering apprentices through to high volume production of automotive, aerospace and defence equipment. A high proportion of revenue is derived from sales via third party distribution channels, in respect of which it is more difficult to track the industry dispersion of end-user customers.
The Group benefits from a high degree of loyalty and repeat business via established distributors in many countries and territories. In the year ended 2 April 2016 the top 20 customers, of which 17 were distributors, contributed less than 26% of revenues.
By geographical territory of destination
Revenues are generated across many diverse geographical territories, with the principal markets in:
Percentage of worldwide 2016 2015
revenues (by destination)
% %
United States of America 60 55
United Kingdom 19 18
Europe (excluding UK) 13 16
Rest of the World 8 11
Total 100 100
Macroeconomic and industry trends
Machine tools and precision engineered components
The worldwide machine tool industry is estimated at over $70bn in annual sales and is determined by the investment intentions of manufacturers, and is sensitive to changes in the economic and financial climate. Demand responds to economic trends and typically lags the main cycle of the economy.
Gardner Research identified the largest five producer countries of machine tools to be China, Germany, Japan, South Korea and Italy with the largest five countries ranked by consumption as China, USA, Germany, Japan and South Korea.
The global consumption of machine tools was reported as being negative at 10.3% in the latest Oxford Economics data for the year to December 2015 against a relatively flat 2014. In our most important markets USA was -15.6%, Germany -11.9% and UK -8.3%.
Industrial laser systems
Industry use of industrial lasers for material processing has continued to expand worldwide. Laser systems have now become a mainstream manufacturing process covering the areas of laser machining including cutting and drilling, marking, ablation and a host of other niche applications.
Industry spending for the entire global industrial laser market is reported to be $3.3bn and growing between 4% and 6% each year. The laser marking and micro-materials subset of the overall laser industry continues to grow due to enhanced techniques in the speed, cost and quality of the systems being implemented and legislative changes driving a requirement for greater traceability.
Results
Machine tools and precision engineered components
This division operates from Heckmondwike in the UK, Kalamazoo Michigan in the USA, and Sydney and Brisbane in Australia. It designs and develops metal processing machine tools sold under the brand names Colchester, Harrison and Clausing and designs and manufactures precision engineering components under the brand names Pratt Burnerd and Gamet. There is also a spares, accessories and service operation to support the significant number of machines sold over the Group's long history of supplying quality equipment. Sales are made worldwide, with direct sales operations in North America, Europe, and Australia and a network of distributors in all other key end-user markets.
The financial results of these activities, before special items, were as follows:
2016 2015
GBP'000 GBP'000
Revenues 32,127 34,747
Operating profit 2,073 2,931
Operating
margin 6.5% 8.4%
Revenues overall fell by 7.5% with a 16% fall in the UK and European business and 22% fall in Australia. Revenues and operating profit in our North American operations remained level with the prior year which we consider to be a significant achievement given a 15% industry-wide fall in US consumption. Although the Australian business had a difficult year and was forced to reduce overheads and preserve cash by operating on a four day week basis it has since the financial year end returned to full time working to cope with increased demand and has traded profitably so far this financial year. The Australian operation is also leading the expansion into the South East Asian markets and is responsible for signing up the new distributors in Malaysia, Thailand and Vietnam and it is clear there remains brand recognition in these markets with orders and quotations actively being undertaken.
The UK and European operation experienced difficult market conditions, particularly in Germany, where the weakness of the Euro added pricing pressure. In response to these difficult conditions direct and overhead costs were reduced and the mix of products manufactured in the UK revised during the second half of the financial year. The fall in volume was concentrated on the higher margin component product resulting in a disproportionate fall in operating margins. This was the principal reason for the division's poor overall performance.
Since his appointment as Divisional Managing Director of the machine tool division in August 2015 Don Haselton has been focusing on the introduction to the UK and Europe of the Clausing product range of drills, mills, saws and grinders which are now becoming a regular feature of the package of products we supply in the UK and Europe.
The Clausing range of products has been one of the key reasons behind the sustained growth in the North American operations and represent over 1/3 of their product sales compared to a figure of just 4% for the UK and European operation at present.
Industrial laser systems
Following the acquisition of 80% of TYKMA Inc. in early February 2015, both the TYKMA and Electrox operations were merged into a single industrial laser systems business under a unified management structure. The remaining 20% of TYKMA was purchased at the end of March 2016 just before the financial year end. The integration of the two businesses continued throughout the year with all manufacturing operations centered in a new purpose built facility in Chillicothe, Ohio USA. In the UK we took steps to expand our UK sales presence by signing a distribution agreement with Needham Coding based in Shropshire. This new relationship provides a customer centric operation and increased presence throughout the UK and Ireland and is in addition to the TYKMA Electrox sales and service center located in Letchworth Garden City.
As a result of these actions, operating efficiencies and savings (including those from supplier consolidation) are evidenced in the increased margins we saw towards the end of the financial year. In addition, the restructuring of our entire global sales structure resulted in reduced overall costs and sales operations coming under common leadership.
The worldwide industrial laser systems business now operates under the TYKMA Electrox brand. Industrial laser system solutions are sold for a variety of applications including marking, engraving and micro-material processing to a wide range of industries which includes small companies to large multi-national corporate customers.
The enlarged industrial laser systems division is headed up by David Grimes, the previous CEO of TYKMA, who became a substantial shareholder in the Group as a result of the purchase of the remaining 20% of TYKMA Inc. by the Group at the end of March 2016.
Revenues in this division increased by 43% following the TYKMA contribution being included for a full year for the first time. Operating profit increased substantially but with only the last few months benefitting from the integration of the two companies. We expect this trend will continue to grow and show through in increased margins in the first few months of the current financial year.
Results for the financial year before special items were as follows:
2016 2015
GBP 000 GBP 000
Revenues 13,142 9,229
Operating profit 1,179 304
Operating margin 8.9% 3.3%
Group revenue
Revenue from continuing operations increased by 3.4% to GBP45.3m (2015: GBP43.8m) which although representing only a modest increase over last year was achieved despite the difficult market conditions experienced in the machine tools business in the UK and Europe where turnover fell by 16% and in Australia which suffered a 22% decline.
Costs and margins
Gross margins in the Industrial laser systems division improved as the year progressed and the benefits of the TYKMA Electrox business integration began to take effect. Margins in machine tools were however inevitably affected by the reduced volumes in the UK and European operation, particularly in the higher margin precision components.
Profit before taxation
Group profit before tax was GBP1.00m (2015: GBP3.68m) and the underlying profit figure before special items was GBP1.48m (2015: GBP2.02m).
Special items
During the financial year, the Group had a number of transactions, which in the opinion of the directors should be reported seperately for a better understanding of the underlying trading performance of the Group.
A credit of GBP0.94m (2015: GBP2.35m) is included in operating profit as a result of the work by the trustees of the UK pension scheme and the company in reducing pension liabilities. A number of transactions took place over the previous and current year including a pension increase exchange, commutation of small pensions and other flexible retirement options. This resulted in actuarial adjustments to the pension liabilities, which are processed through the Consolidated Income Statement.
In addition, as a result of the scheme being in surplus on an accounting basis, a credit of GBP1.17m (2015: GBP0.86m) is recorded in interest. No cash was paid to or received from the scheme in respect of these transactions.
As a result of the settlement of the contingent deferred consideration on the acquisition of the remaining 20% of TYKMA Inc. a credit is recorded within financial income of GBP2.03m. The acquisition occurred earlier than was originally envisaged under the put and call options in place and consequently the amount paid was less than that accrued based on the earnings of the combined industrial laser systems division over the next few years.
Costs incurred on the acquisition of the remaining 20% of TYKMA Inc. amounted to GBP0.2m. Redundancy and restructuring costs incurred on the integration of the Electrox and TYKMA businesses and the overhead and operating cost reduction in Head Office and UK machine tools business amounted to GBP1.72m.
During the integration process of TYKMA and Electrox it became clear that the capitalised cost of the software developed by Electrox was not going to be realised as originally envisaged ,would not be sold as a distinct product and that further work would be required to integrate the software with existing systems. As a result it has been decided to impair the value of the work so far and an impairment charge of GBP2.39m has been shown within special items.
In addition share option costs, amortisation of intangible assets and amortisation of loan note costs which are non-cash costs to the Group have been included in special items.
Taxation
The current year resulted in a small credit for taxation of GBP0.14m (2015: charge of GBP1.33m). Deferred taxation is provided on the pension credits of GBP2.11m at a rate of 35%, being the rate applicable to any refund from a pension scheme.
The UK businesses continue to benefit from the substantial previous tax losses and no taxation is payable in the UK. The US businesses are subject to taxation on their profits at a rate of 35%.
Net profit and earnings per share
The total profit attributable to equity holders of the parent for the current financial year amounted to GBP1.16m (2015: GBP2.33m).
Underlying earnings from continuing operations before special items and related taxation was 1.69p per share (2015: 2.09p) and basic earnings per share was 1.26p (2015: 2.66p)
Financial position and utilisation of resources
Cash flow
Cash generated from operations before working capital movements was GBP3.03m (2015: GBP3.02m). Working capital movement was largely due to a reduction in creditors of which part was professional costs relating to the original purchase of 80% of TYKMA towards the end of the prior financial year. GBP0.81m was expended on redundancy and restructuring costs which largely consisted of redundancy payments at Electrox, UK machine tools and head office, including to the previous CEO.
Interest paid has increased to GBP0.96m as a result of a full year of interest paid on the loan notes with the final tranche of GBP806k of loan notes issued in August 2015.
Capital expenditure included replacement machinery for the UK machine tools business and the fit out costs and plant, machinery and fixtures of the two new facilities in the USA; Clausing machine tools in Michigan and TYKMA in Ohio.
Net borrowings
Group net debt at 2 April 2016 stood at GBP13.89m (2015: GBP10.8m) comprising net bank and finance lease indebtedness of GBP6.2m (2015: GBP4.0m) and the amount outstanding on the new loan notes of GBP7.70m (2015: GBP6.78m). The amount outstanding is net of unamortised costs and amounts disclosed in equity reserve of GBP0.8m in the current financial year (2015: GBP0.7m).
New increased facilities were agreed with HSBC in the UK in August 2016 following the sale of the Letchworth property. A package of facilities to support the working capital of the UK machine tools business and a term loan secured on the remaining freehold site in Colchester have been put in place totaling GBP4.95m. In the USA Bank of America supported the 20% TYKMA acquisition in March 2016 with an additional term loan of $1.8m in addition to their existing term and working capital facilities. The Group has a mixture of term loans and revolving working capital facilities with maturities between 1 and 5 years. Headroom on bank facilities was GBP3.2m at the year-end (2015: GBP4.2m) and all financial covenants in place were met during the year.
During August 2015 the Group issued the remaining GBP806k of New 8% loan notes with a maturity of February 2020 to bring the total gross amount issued to the GBP8.5m agreed under the loan note programme. These loan notes also entitled holders to warrants of equal value to subscribe for new ordinary shares at 20p.
Gearing amounted to 34% of aggregate net assets (2015: 31%)
Going concern
In accordance with FRC guidelines, the Board has assessed the Group's funding and liquidity position. The directors confirm that, after having made appropriate enquiries, they have a reasonable expectation that the Group and the Company have adequate resources to continue operations for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparation of the financial statements.
Retirement benefits
The accounting surplus at 2 April 2016 was GBP40.94m (2015: GBP34.29m). This surplus has been calculated in accordance with the scheme rules and recognised accounting requirements.
As a result of liability reduction exercises undertaken by the UK scheme's Trustees in conjunction with the company, a credit has been taken in the period in the Income Statement of GBP0.97m to reflect the actuarial reduction in scheme liabilities.
In accordance with the current legislation on taxation of pension surplus returns to a company, deferred taxation has been provided for on the pension entries at 35% as opposed to the normal 20% rate.
In October 2013 the Company reached agreement with the Trustees of the scheme regarding the funding position on a more prudent Technical Provisions basis as at 31 March 2013, which indicated a funding deficit of GBP25.4m at that date, and estimated a deficit on a full buy-out basis of GBP51.1m.
It was further agreed that the Technical Provisions deficit would be resolved by an outperformance of the investment returns on the scheme assets of 1% above the return on UK gilts, and that no cash contributions would be required until at least the next funding valuation due as at 31 March 2016.
The formal Actuarial Technical Provisions calculation for 31 March 2016 is currently in
progress but it is expected that a similar agreement will be reached with the Trustees following its completion.
At 2 April 2016, the subsequent performance of the scheme assets, changes in the underlying market conditions and the various liability reduction exercises, indicate that the estimated deficit on a Technical Provisions basis had reduced to GBP10.6m. On a full buy-out basis the estimated deficit had reduced to GBP44m by the end of March 2016.
The directors and the Trustees work together on a collaborative basis to continue to monitor investment performance and market conditions closely, to mitigate the risk of mis-matching assets and liabilities to a tactically appropriate level, and to pursue opportunities to secure a full or partial buy-out of UK pension liabilities when conditions permit.
The US retiree health scheme and pension fund deficits reduced slightly during the year due to changes in actuarial assumptions to GBP1.04m (2015: GBP1.10m)
Electrox site
As a result of the merger of TYKMA and Electrox, and the centralisation of manufacturing in the USA, the long leasehold UK site in Letchworth became too large for the remaining sales and service operation which has moved to smaller leased premises. The sale of the existing site for a net GBP2.0m was completed on 11 July 2016 with proceeds used to reduce the UK senior bank debt. A reduction in valuation of GBP0.45m down to the net proceeds has been taken in the revaluation reserve at the year-end and the property has been classified as an asset held for sale within current assets in the Consolidated Statement of Financial Position.
Share capital and reserves
Share capital and share premium reflect the exercise of 2.75m of share options by Nigel Rogers in August 2015 and the issue of 12m shares at the end of March 2016 in part settlement of the consideration for the remaining 20% of TYKMA Inc.
Neil Carrick
Finance Director
31 August 2016
Consolidated income statement
for the 53-week period
ended
2 April 2016
Before After Before After
Special Special Special Special Special Special
Items Items Items Items Items Items
53 weeks 53 weeks 53 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
2 April 2 April 2 April 28 March 28 March 28 March
2016 2016 2016 2015 2015 2015
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------- -------- -------- -------- -------- --------
Continuing
Revenue 45,269 - 45,269 43,794 - 43,794
Cost of sales (29,899) (894) (30,793) (29,374) - (29,374)
-------------------------------- -------- -------- -------- -------- -------- --------
Gross profit 15,370 (894) 14,476 14,420 - 14,420
Net operating expenses (13,014) (2,626) (15,640) (11,956) 958 (10,998)
Operating profit/(loss) 2,356 (3,520) (1,164) 2,464 958 3,422
Financial income 10 1,171 1,181 2 857 859
Financial expense (890) (150) (1,040) (451) (155) (606)
Contingent consideration
settlement - 2,032 2,032 - - -
Profit/(loss) before
tax 1,476 (467) 1,009 2,015 1,660 3,675
Income tax (charge)/credit 65 72 137 (166) (1,159) (1,325)
-------------------------------- -------- -------- -------- -------- -------- --------
Profit/(loss) for the
period 1,541 (395) 1,146 1,849 501 2,350
Attributable to equity
holders of the parent 1,552 (395) 1,157 1,832 501 2,333
Attributable to non controlling
interests (11) - (11) 17 - 17
-------------------------------- -------- -------- -------- -------- -------- --------
1,541 (395) 1,146 1,849 501 2,350
-------------------------------- -------- -------- -------- -------- -------- --------
Basic earnings per share 1.69p (0.43)p 1.26p 2.09p 0.57p 2.66p
Diluted earnings per
share 1.68p (0.43)p 1.25p 2.03p 0.55p 2.58p
Consolidated statement of comprehensive income
for the 53-week period ended
2 April 2016
53-week 52-week
period period ended
ended
2April 28 March
2016 2015
GBP000 GBP000
---------------------------------------------------------- --------- ------------
Profit for the period 1,146 2,350
Other comprehensive income/(expense)
Items that will not be reclassified to the Income
Statement:
Impact of changes to defined benefit asset limit 4,436 12,188
Deferred taxation (515) (4,296)
---------------------------------------------------------- --------- ------------
Total items that will not be reclassified to the
Income Statement: 3,921 7,892
---------------------------------------------------------- --------- ------------
Items that are or may in the future be reclassified
to the Income Statement:
Foreign exchange translation differences 286 462
Fair valuation of assets held for sale (450) 656
Fair valuation of investments (29) (622)
Total items that are or may in the future be reclassified
to the Income Statement: (193) 496
---------------------------------------------------------- --------- ------------
Other comprehensive income for the period, net
of income tax 3,728 8,388
Total comprehensive income for the period 4,874 10,738
---------------------------------------------------------- --------- ------------
Attributable to:
Equity holders of the Parent Company 4,885 10,721
Non controlling interests (11) 17
Total recognised income 4,874 10,738
---------------------------------------------------------- --------- ------------
Consolidated statement of financial position
As at 2 April 2016
As at As at
2 April 2016 28 March 2015
GBP000 GBP000
--------------------------------------------- ------------ -------------
Non-current assets
Property, plant and equipment 3,235 5,159
Goodwill 7,144 7,144
Other Intangible assets 322 2,347
Investments 496 525
Deferred tax assets 3,832 3,022
Employee benefits 40,937 34,292
55,966 52,489
--------------------------------------------- ------------ -------------
Current assets
Inventories 11,271 11,036
Trade and other receivables 6,771 7,070
Assets held for sale 1,999 -
Cash and cash equivalents 765 902
--------------------------------------------- ------------ -------------
20,806 19,008
--------------------------------------------- ------------ -------------
Total assets 76,772 71,497
--------------------------------------------- ------------ -------------
Non-current liabilities
Loans and other borrowings (11,376) (8,405)
Trade and other payables - (4,175)
Deferred tax liabilities (14,538) (13,358)
--------------------------------------------- ------------ -------------
(25,914) (25,938)
--------------------------------------------- ------------ -------------
Current liabilities
Trade and other payables (6,318) (6,792)
Income tax payable - (135)
Provisions (425) (611)
Loans and other borrowings (3,275) (3,295)
(10,018) (10,833)
--------------------------------------------- ------------ -------------
Total liabilities (35,932) (36,771)
--------------------------------------------- ------------ -------------
Net assets 40,840 34,726
--------------------------------------------- ------------ -------------
Shareholders' equity
Called-up share capital 1,044 896
Share premium account 1,013 -
Revaluation reserve 1,273 1,494
Available for sale reserve (651) (622)
Equity reserve 139 124
Translation reserve 1,714 1,428
Retained earnings 36,308 31,270
--------------------------------------------- ------------ -------------
40,840 34,590
--------------------------------------------- ------------ -------------
Non-controlling interests - 136
--------------------------------------------- ------------ -------------
Total equity 40,840 34,726
--------------------------------------------- ------------ -------------
Consolidated statement of
financial position
As at 2 April 2016
Ordinary Share Capital Available Non
share premium Revaluation redemption for sale Translation Equity Retained Controlling Total
capital account reserve reserve([1]) reserve reserve reserve Earnings Total Interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
At 29 March 2014 14,581 16,885 862 2,500 - 938 180 (13,401) 22,545 - 22,545
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
At 30 March 2014 14,581 16,885 862 2,500 938 180 (13,401) 22,545 - 22,545
Profit for the period - - - - - - - 2,333 2,333 17 2,350
Other comprehensive income:
Foreign currency translation - - (24) - - 490 - (4) 462 - 462
Net defined benefit asset
mvmt - - - - - - - 12,188 12,188 - 12,188
Fair value of Investments - - - - (622) - - - (622) - (622)
Revaluation of properties - - 656 - - - - - 656 - 656
Deferred tax - - - - - - - (4,296) (4,296) - (4,296)
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Total comprehensive income - - 632 - (622) 490 - 10,221 10,721 17 10,738
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Transactions with owners:
Share capital subscribed for 51 1,094 - - - - - - 1,145 - 1,145
Cancellation in period (13,736) (17,979) - (2,500) - - - 34,215 - - -
Equity element of shareholder
loan issued in period - - - - - - (56) 104 48 - 48
Credit for share-based
payments - - - - - - - 131 131 - 131
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Total transactions with
owners (13,685) (16,885) - (2,500) - - (56) 34,450 1,324 - 1,324
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Non controlling interest - - - - - - - - - 119 119
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
At 28 March 2015 896 - 1,494 - (622) 1,428 124 31,270 34,590 136 34,726
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
At 29 March 2015 896 - 1,494 - (622) 1,428 124 31,270 34,590 136 34,726
Profit for the period - - - - - - - 1,157 1,157 (11) 1,146
Other comprehensive income:
Foreign currency translation - - - - - 286 - - 286 - 286
Net defined benefit asset
mvmt - - - - - - - 4,436 4,436 - 4,436
Fair valuation of Investments - - - - (29) - - - (29) - (29)
Fair valuation of assets held
for sale - - (450) - - - - - (450) - (450)
Transfer on revalued
properties - - 229 - - - - (229) - - -
Deferred tax - - - - - - - (515) (515) - (515)
Total comprehensive income - - (221) - (29) 286 - 4,849 4,885 (11) 4,874
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Transactions with owners:
Share capital subscribed for 148 1,013 - - - - - - 1,161 - 1,161
Equity element of shareholder
loan issued in period - - - - - - 15 - 15 - 15
Acquisition of NCI - - - - - - - - 125 125 (125) -
Credit for share-based
payments - - - - - - - 64 64 - 64
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Total transactions with
owners 148 1,013 - - - - 15 189 1,365 (125) 1,240
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
At 2 April 2016 1,044 1,013 1,273 - (651) 1,714 139 36,308 40,840 - 40,840
----------------------------- -------- -------- ----------- ------------ --------------- --------------- -------------------------------- ------ --------- --------------- --------------- ---------------
Consolidated cash flow statement
For the 53-week period ended 2 April 2016
53-week 52-week
period ended period ended
2April 28March
2016 2015
GBP000 GBP000
---------------------------------------------------- ------------ ------------
Cash flows from operating activities
Profit for the period 1,146 2,350
Adjustments for:
Amortisation of development expenditure 122 133
Depreciation 548 450
Net financial income (141) (253)
Net pension credit (940) (2,347)
Other special items 2,363 1,231
Equity share option expense 64 131
Income tax (credit)/expense (137) 1,325
---------------------------------------------------- ------------ ------------
Operating cash flow before changes in working
capital and provisions 3,025 3,020
Decrease in trade and other receivables 463 203
Decrease/(increase) in inventories 106 (1,051)
Decrease in trade and other payables (1,682) (1,626)
Restructuring and redundancy expenditure (807) (170)
Employee benefits contributions (130) -
Cash generated in operations 975 376
Interest paid (964) (414)
Income tax paid (3) (205)
---------------------------------------------------- ------------ ------------
Net cash flows from operating activities 8 (243)
Cash flows from investing activities
Interest received 10 2
Proceeds from sale of property, plant and equipment - 460
Purchase of TYKMA Inc. (1,378) (3,802)
Investment in Prophotonix - (1,147)
Purchase of property, plant and equipment (1,522) (944)
Development expenditure capitalised (297) (299)
Refinancing expenditure - (487)
Net cash flows from investing activities (3,187) (6,217)
---------------------------------------------------- ------------ ------------
Cash flows from financing activities
Proceeds from issue of ordinary shares 275 1,145
Proceeds from issue of Loan Notes 806 7,694
Net Repayment of external borrowing 1,883 (2,505)
Net Finance lease income/(expenditure) 67 (107)
---------------------------------------------------- ------------ ------------
Net cash flows from financing activities 3,031 6,227
---------------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (148) (233)
Cash and cash equivalents at the beginning
of the period 902 1,149
Effect of exchange rate fluctuations on cash
held 11 (14)
---------------------------------------------------- ------------ ------------
Cash and cash equivalents at the end of the
period 765 902
---------------------------------------------------- ------------ ------------
Notes relating to the financial information
Basis of preparation
The Financial information set out in this preliminary announcement does not constitute the company's Consolidated Financial Statements for the financial years ended 2 April 2016 or 28 March 2015 but are derived from those Financial Statements. Statutory Financial Statements for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the company's AGM. The Auditors KPMG LLP have reported on those financial statements. Their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006 in respect of the Financial Statements for 2016 or 2015.
The Statutory accounts are available on the Company's web site and will be posted to shareholders who have requested a copy and thereafter by request to the company's registered office.
1. Segment information
IFRS 8 - "Operating Segments" requires operating segments to be identified on the basis of internal reporting about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance. The chief operating decision maker has been identified as the Executive Directors. The Executive Directors review the Group's internal reporting in order to assess performance and allocate resources.
The Executive Directors consider there to be two continuing operating segments being machine tools and precision engineered components and industrial laser systems.
The executive directors assess the performance of the operating segments based on a measure of operating profit/(loss). This measurement basis excludes the effects of Special Items from the operating segments. Head Office and unallocated represent central functions and costs.
The following is an analysis of the Group's revenue and results by reportable segment:
Continuing
53 Weeks ended 2 April 2016 Machine
tools
& precision Industrial
engineered laser Head Office
components systems & unallocated Total
Segmental analysis of revenue GBP000 GBP000 GBP000 GBP000
------------------------------------ --------------- --------------- --------------- ---------------
Revenue from external customers 32,127 13,142 - 45,269
Inter-segment revenue - - - -
------------------------------------ --------------- --------------- --------------- ---------------
Total segment revenue 32,127 13,142 - 45,269
Less: inter-segment revenue - - - -
------------------------------------ --------------- --------------- --------------- ---------------
Total revenue 32,127 13,142 - 45,269
------------------------------------ --------------- --------------- --------------- ---------------
Segmental analysis of operating
profit/(loss) before Special
Items 2,073 1,179 (896) 2,356
------------------------------------ --------------- --------------- --------------- ---------------
Special Items 282 (3,212) (590) (3,520)
------------------------------------ --------------- --------------- --------------- ---------------
Group profit/(loss) from operations 2,355 (2,033) (1,486) (1,164)
------------------------------------ --------------- --------------- --------------- ---------------
Other segmental information:
Reportable segment assets 26,630 5,970 44,172 76,772
Reportable segment liabilities (22,078) (3,048) (10,806) (35,932)
Fixed asset additions 605 1,214 - 1,819
Depreciation and amortisation 293 457 - 750
1. Segment information (CONTINUED)
52 Weeks ended 28 March 2015 Machine
tools
& precision Industrial
engineered laser Head Office
components systems & unallocated Total
Segmental analysis of revenue GBP000 GBP000 GBP000 GBP000
Revenue from external customers 34,747 9,047 - 43,794
---------------------------------------------- -------------- ---------- ---------------- --------
Inter-segment revenue - 182 - 182
Total segment revenue 34,747 9,229 - 43,976
---------------------------------------------- -------------- ---------- ---------------- --------
Less: inter-segment revenue - (182) - (182)
Total revenue 34,747 9,047 - 43,794
---------------------------------------------- -------------- ---------- ---------------- --------
Segmental analysis of operating profit/(loss)
before Special Items 2,931 304 (771) 2,464
---------------------------------------------- -------------- ---------- ---------------- --------
Special Items 1,965 (772) (235) 958
---------------------------------------------- -------------- ---------- ---------------- --------
Group profit/(loss) from operations 4,896 (468) (1,006) 3,422
Other segmental information:
Reportable segment assets 29,443 6,622 35,432 71,497
Reportable segment liabilities (19,614) (2,619) (14,538) (36,771)
Fixed asset additions 919 353 - 1,272
Depreciation and amortisation 305 278 - 583
Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.
Geographical segmental analysis of revenue is shown by origin and destination in the following two tables:
Segmental analysis by origin 2016 2015
---------------- -------------------
GBP000 % GBP000 %
-------------------------------------- ------- ------- --------------- --------
Gross sales revenue:
-------------------------------------- ------- ------- --------------- --------
UK 14,851 32.8 20,806 47.5
North America 28,936 63.9 21,083 48.1
Australasia 1,482 3.3 1,905 4.4
Total Revenue 45,269 100.0 43,794 100.0
-------------------------------------- ------- ------- --------------- --------
1. Segment information (CONTINUED)
Segmental analysis by destination:
2016 2015
---------------- --------------
GBP000 % GBP000 %
---------------------------------------- ------- ------- ----------- -------
Gross sales revenue:
---------------------------------------- ------- ------- ----------- -------
UK 8,498 18.8 8,043 18.4
Other European 5,905 13.0 7,045 16.1
North America 27,291 60.3 24,087 55.0
Africa 162 0.4 187 0.4
Australasia 1,438 3.2 1,709 3.9
Central America 163 0.4 148 0.3
Middle East 733 1.6 893 2.1
Far East 1,079 2.3 1,682 3.8
---------------------------------------- ------- ------- ----------- -------
45,269 100.0 43,794 100.0
---------------------------------------- ------- ------- ----------- -------
There are no customers that represent 10% or more of the Group's revenues.
2.SPECIAL ITEMS
In order for users of the financial statements to better understand the underlying performance of the Group the Board have separately disclosed transactions which by virtue of their size or incidence, are considered to be one off in nature. In addition the charge for share based payments, amortisation of intangible assets acquired and non cash pension transactions have also been separately identified.
Special items include acquisition costs, gains and losses on the sale of properties and assets, exceptional costs relating to reorganisation, redundancy and restructuring, asset impairments, legal disputes and inventory, asset and intangibles impairments.
2016 2015
GBP000 GBP000
---------------------------------------------- ------- -------
Items included in operating profit:
Pensions credit (940) (2,347)
Property valuation adjustment - 462
Redundancy and reorganisation 1,729 434
Impairment of intangible assets 2,390 -
Acquisition costs 197 335
Share option costs 64 131
Amortisation of intangible assets acquired 80 27
3,520 (958)
---------------------------------------------- ------- -------
Items included in financial (income)/expense:
Pensions interest on surplus (1,171) (857)
Amortisation of loan note expenses 150 155
---------------------------------------------- ------- -------
(1,021) (702)
---------------------------------------------- ------- -------
Items included in contingent consideration settlement:
TYKMA deferred consideration settlement (2,032) -
------------------------------------------------------- -------
(2,032) -
------------------------------------------------------- -------
During the year the Group incurred further costs with regard to the acquisition of TYKMA Inc. Property disposals in both the UK and US and the revaluation of properties led to losses. Reorganisation and restructuring costs were principally related to the integration of TYKMA Inc. and the Electrox Laser marking division.
The pension credit relates to liability reduction exercises undertaken by the trustees of the main scheme including pensions increase exchange.
During the prior year the Group incurred costs with regard to the abortive acquisition of the Group by Qinddao D&D Investment Group Co. Ltd. Costs were also incurred with regard to the granting of share options.
The contingent consideration settlement of GBP2.03m related to the acquisition of the final 20% of TYKMA Inc.
3. Financial income and expense
2016 2015
GBP000 GBP000
------------------------------------------ ------- ------
Bank and other interest 10 2
Interest on pensions surplus 1,171 857
------------------------------------------ ------- ------
Financial income 1,181 859
------------------------------------------ ------- ------
Bank overdraft and loan interest (155) (174)
Shareholder loan interest - (238)
Other loan interest (721) (22)
Other finance charges (3) -
Finance charges on finance leases (11) (17)
Amortisation of shareholder loan expenses (150) (155)
Financial expense (1,040) (606)
------------------------------------------ ------- ------
4. Taxation
2016 2015
GBP000 GBP000
----------------------------------------------------- ------ -------
Current tax:
Corporation tax at 20% (2015: 21%):
- current period - -
Overseas taxation:
- current period 53 (339)
----------------------------------------------------- ------ -------
Total current tax charge 53 (339)
----------------------------------------------------- ------ -------
Deferred taxation:
- current period 79 (1,060)
- prior period 5 74
----------------------------------------------------- ------ -------
Total deferred taxation credit/(charge) 84 (986)
----------------------------------------------------- ------ -------
Taxation credited/ (charged) to the income statement 137 (1,325)
----------------------------------------------------- ------ -------
Tax reconciliation
The tax charge assessed for the period is lower than the standard rate of corporation tax in the UK of 20% (2015: 21%). The differences are explained below:
2016 2015
---------------- ---------------
GBP000 % GBP000 %
--------------------------------------------- ------- ------- ------------ -------
Profit before tax 1,009 3,675
--------------------------------------------- ------- ------- ------------ -------
Profit before tax multiplied by the standard
rate of corporation tax
in the UK of 20% (2015: 21%) 202 20.0 772 21.0
Effects of:
- income not taxable and/or expenses
not deductible (205) (20.3) 252 6.9
- overseas tax rates 19 1.9 114 3.1
- pension fund surplus taxed at higher
rate 321 31.8 454 12.3
- property disposals (52) (5.2) - -
- state taxes 75 7.4
- deferred tax prior period adjustment (5) (0.5) (74) (2.0)
- (unrecognised losses utilised)/tax
not recognised on losses (600) (59.5) (193) (5.2)
- impact of rate change 108 10.7 - -
--------------------------------------------- ------- ------- ------------ -------
Taxation (credited)/charged to the income
statement (137) (13.6) 1,325 36.1
--------------------------------------------- ------- ------- ------------ -------
5. Earnings per share
The calculation of the basic earnings per share of 1.26p (2015: 2.66p) is based on the earnings for the financial period attributable to the Parent Company's shareholders of a profit of GBP1,157,000 (2015: GBP2,333,000) and on the weighted average number of shares in issue during the period of 91,684,103 (2015: 87,771,514). At 2 April 2016, there were 6,150,000 (2015: 9,900,000) potentially dilutive shares on option with a weighted average effect of 583,333 (2015: 2,783,270) shares giving a diluted profit per share of 1.25p (2015: 2.58p)
2016 2015
--------------------------------------------------- ---------- -----------
Weighted average number of shares
Issued shares at start of period 89,607,957 84,430,346
Effect of shares issued in the year 2,076,146 3,341,168
--------------------------------------------------- ---------- -----------
Weighted average number of shares at end of period 91,684,103 87,771,514
--------------------------------------------------- ---------- -----------
GBP000 GBP000
------------------------------------------- ------- ---------
Total post tax earnings 1,146 2,350
Share Option Costs 64 131
Pensions Interest (1,171) (857)
Amortisation of Shareholder loan expenses 150 155
Pensions credit (940) (2,347)
Credit on settling deferred consideration (2,032) -
Impairment of intangible assets 2,390 -
Amortisation of intangible assets acquired 80 27
Property sales and revaluation - 462
Other special items 1,729 434
Acquisition costs 197 335
Associated Taxation (72) 1,159
Underlying Earnings before tax 1,476 2,015
------------------------------------------- ------- -------
Underlying Earnings after tax 1,541 1,849
------------------------------------------- ------- -------
Underlying EPS 1.69p 2.09p
6. Cash and cash equivalents
2016 2015
GBP000 GBP000
----------------------------------------------------- ------ ------
Cash at bank 665 802
Short-term deposits 100 100
----------------------------------------------------- ------ ------
Cash and cash equivalents per statement of financial
position and per cash flow statement 765 902
----------------------------------------------------- ------ ------
7. RECONCILIATION OF NET CASH FLOW TO NET DEBT
2016 2015
GBP000 GBP000
------------------------------------------ -------- --------
Decrease in cash and cash equivalents (148) (233)
Increase in debt and finance leases (2,757) (5,200)
------------------------------------------ -------- --------
Increase in net debt from cash flows (2,905) (5,433)
Net debt at beginning of period (10,798) (5,308)
Shareholder loan issue costs amortisation (110) 701
Cash and debt through acquisitions - (697)
Exchange effects on net funds (73) (61)
------------------------------------------ -------- --------
Net debt at end of period (13,886) (10,798)
------------------------------------------ -------- --------
8. Analysis of net DEBT
At At
29 March Exchange 2 April
2015 movement Other Cash flows 2016
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- -------- -------- ------ ---------- --------
Cash at bank and in hand 802 11 - (148) 665
Term deposits (included within cash
and cash equivalents on the balance
sheet) 100 - - - 100
902 11 - (148) 765
Debt due within one year (3,206) (82) - 174 (3,114)
Debt due after one year (1,539) - - (2,057) (3,596)
Loan notes due after one year (6,783) - (110) (806) (7,699)
Finance leases (172) (2) - (68) (242)
Total (10,798) (73) (110) (2,905) (13,886)
------------------------------------- -------- -------- ------ ---------- --------
9. ACQUISITION
There were no acquisitions in the current year. During the prior year the Group acquired 80% of the issued share capital of TYKMA Inc, a US laser marking company. There have been no changes in the year to the fair value of net assets acquired, and therefore no change in the goodwill arising of GBP7,144,000.
The acquisition of TYKMA Inc. included contingent consideration relating to put and call options between the group and the vendor which had a fair value at March 2015 of GBP4.1m. During the year the fair value was remeasured to GBP2.1m and was settled at this amount. The settlement comprised of US$1.8m and the issue of 12m ordinary shares in the Group with a value at that time of GBP0.9m. The fair value gain of GBP2,032,000 has been included as a special item given its size and nature.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DGGDIRDXBGLB
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