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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Chamberlin Plc | LSE:CMH | London | Ordinary Share | GB0001870228 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.25 | 1.20 | 1.30 | 1.25 | 1.25 | 1.25 | 782 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Engineering Services | 20.72M | -125k | -0.0007 | -17.86 | 2.24M |
From Apr 2019 to Apr 2024
TIDMCMH
RNS Number : 8949F
Chamberlin PLC
23 May 2017
CHAMBERLIN plc
("Chamberlin", the "Company" or the "Group")
FINAL RESULTS
for the year ended 31 March 2017
KEY POINTS
-- Continued encouraging progress, both strategically and operationally
o underpins expected significant growth in the current year and beyond
-- Revenues up 10% to GBP32.1m (2016: GBP29.1m) -- Underlying profit before tax* increased significantly to GBP0.6m (2016: GBP0.2m) -- Underlying diluted profit per share* more than tripled to 4.5p (2016: 1.4p)
IFRS diluted loss per share of 12.2p (2016: loss per share of 3.3p)
-- Capital expenditure of GBP3.9m (2016: GBP1.4m), included establishment of new machining facility:
o opens up new long term growth opportunities
o positions Chamberlin as the only fully integrated supplier of grey iron bearing housings in Europe
-- Net debt of GBP6.8m at year end, reflected machining facility investment -- Foundry operations grew revenues by 8% to GBP21.3m
o major new automotive contract commenced in H2 as expected, with volumes rising in 2017
o new machining facility opened in Q4 to support move into fully machined components
o Walsall foundry's promotion to 'Category A' supplier in Q1 is providing additional growth opportunities
-- Engineering operations increased revenues by 15% to GBP10.8m
o initiatives in place to drive export sales and margins
-- Board remains confident of delivering further progress through 2017
* Underlying figures are stated before exceptional items, administration costs of the pension scheme and net financing costs on pension obligations, share based payment costs and the associated tax impact of these items.
Chairman, Keith Butler-Wheelhouse, commented:
"Chamberlin made important strategic and operational progress over the year, which will help to support a significant new phase of growth. Revenue increased by 10% to GBP32.1m and the underlying profit before tax increased significantly to GBP0.6m.
We have further developed Chamberlin's product offering with a significant investment in a machining facility in Walsall. Opened in the final quarter of the financial year, it improves our competitive positioning and will support further growth over the new financial year. It also underlines our ability to deliver a world class product at a globally competitive cost.
The Group remains well placed for further progress over the new financial year, supported by major new contracts."
Enquiries
Chamberlin plc (www.chamberlin.co.uk) T: 01922 707100 Kevin Nolan, Chief Executive David Roberts, Finance Director Smith & Williamson Corporate T: 020 7131 Finance Limited 4000 (Nominated Adviser and Broker) Russell Cook, Katy Birkin KTZ Communications T: 020 3178 (Financial PR) 6378 Katie Tzouliadis, Emma Pearson
Chairman's Statement
Introduction
The Group delivered a significantly strengthened performance in the second half of the year, as expected, and financial results for the year are encouraging, with revenue growth of 10% at GBP32.1m and underlying profit before tax significantly increased to GBP0.6m from GBP0.2m last year.
These improved results were supported by both our foundry and engineering operations. Operating profit across our foundry activities rose by 55%, driven mainly by our Walsall foundry, and our engineering operations increased operating profit by 20% year-on-year.
We took some important strategic decisions in the year. Most significantly, we invested in a new machining facility in Walsall. The investment supports Chamberlin's move into fully machined components for automotive turbochargers. It also positions the Group as the only fully integrated supplier of grey iron bearing housings in Europe and is expected to open up new long term growth opportunities, as we have previously reported. We started production at the new facility in early 2017 and held a successful Open Day at the end of March 2017 which was attended by both customers and stakeholders.
The Board took the difficult decision of closing our non-core foundry at Leicester, which was the least specialised of the Group's foundries, at the end of 2016, and production at Leicester stopped in February 2017. An orderly decommissioning process is now underway.
Exidor has delivered good growth and management are implementing further initiatives to improve profitability. Petrel is showing encouraging growth by continuing to access new markets outside of its core oil and gas customer base, helped by the successful introduction of new LED product ranges.
Prospects for the current financial year remain very encouraging. The actions we have completed over the last year help to improve Chamberlin's competitive positioning and we are continuing to focus on margin development across both areas of operations. The automotive turbocharger sector is a growth area and with our new machining capability in operation, we are well placed to expand further. Production volumes from last year's major new automotive contract win should increase over 2017 and will help to support growth in revenue and profitability.
Results
Revenues for the year to 31 March 2017 increased by 10% to GBP32.1m (2016: GBP29.1m), with growth coming from new, cast-only, work at the Walsall foundry and increased market share from our two engineering businesses. This offset the loss of an industrial vehicle contract at our Scunthorpe facility. Revenues from the new machining facility, which opened in early 2017, made only a marginal contribution, as expected.
Underlying profit before tax increased significantly to GBP0.6m (2016: GBP0.2m) and diluted underlying profit per share more than tripled to 4.5p (2016: 1.4p).
On an IFRS basis, after accounting for restructuring costs of GBP0.1m (2016: GBP0.1m), administration and costs of the closed pension scheme of GBP0.4m (2016: GBP0.4m) and impairment of Leicester of GBP1.5m (2016: GBPnil), the Group generated a loss of GBP1.0m (2016: loss of GBP0.3m). Diluted loss per share was 12.2p (2016: loss per share of 3.3p).
The net debt position at 31 March 2017 was GBP6.8m (2016: GBP3.2m), reflecting the investment in the new machining facility.
Dividend
In line with the current dividend policy, the Directors are not proposing the payment of a dividend for the period under review (2016: nil).
Staff
Our staff continue to demonstrate huge commitment and dedication as we develop the business, and on behalf of the Board, I would like to thank everyone for their hard work. The Group's improving business performance is supported by their talents and efforts.
Outlook
The Group is well positioned to deliver a further improvement in performance during the current financial year. Major new contract wins in the automotive turbocharger market support ongoing growth and our recently opened new machining plant helps to strengthen our market positioning and widen opportunities.
We look forward to reporting further progress at the Group's AGM on 20 July 2017.
Keith Butler-Wheelhouse
Chairman
22 May 2017
Chief Executive's Review
Chamberlin continues to make encouraging progress, building on our previous work to improve efficiencies and processes and to realign the cost base. The opening of our new machining operations in the fourth quarter of the financial year marked a high point for the Group and we remain excited about the additional growth opportunities the new facility brings. Our engineering operations are also progressing well and we intend to continue to focus on building export sales across both engineering businesses.
Foundries
Foundry revenues increased by 8% year-on-year to GBP21.3m (2016: GBP19.8m), with operating profit rising by 55% to GBP1.2m (2016: GBP0.8m).
Following our decision to close our non-core foundry at Leicester, the Group now operates two foundries, at Walsall and Scunthorpe, each with a different specialisation.
Our foundry at Walsall is our flagship operation and drives the majority of the foundry division's sales. Walsall's expertise is in producing small castings, typically below 3kg in weight, which have complex internal geometry. The complex geometry is achieved through the use of innovative core design and assembly techniques and, importantly, the foundry is capable of producing these castings in high volumes.
The automotive turbocharger segment is a major market for Walsall, with modern designs requiring precise alignment of cooling and lubrication passages to meet the increased performance demanded by modern engines. Legislation is a major driver of this market, with the requirement to reduce nitrogen dioxide emissions promoting the introduction of smaller, turbocharged petrol engines. Approximately 72% of Walsall's casting production is for petrol engines.
To support Chamberlin's growth in the automotive turbocharger market, we have invested an initial GBP2.1m in a machining facility near to our Walsall foundry which will enable us to supply turbo charger bearing housings which are fully machined in-house. This initiative is an exciting development which we expect to open up significant new long term growth opportunities. Walsall is one of only four specialist foundries in Europe with the technical capability of supplying castings for turbochargers and, with our new machining capability, the foundry is now the only fully integrated supplier of grey iron bearing housings in Europe.
The Scunthorpe foundry specialises in heavy castings weighing up to 6,000kg which have complex geometry and challenging metallurgy. These castings are used in applications where there is a requirement for high strength or high temperature performance, for instance in large process compressors, industrial gas turbines and mining, quarrying and construction equipment, and the majority of customers are Original Equipment Manufacturers ("OEMs"). Demand at the foundry was relatively subdued over the year but we have driven further operational improvement at the foundry and continue to work to deepen and broaden customer relationships.
Engineering
Revenues from the engineering operations, comprising our Exidor and Petrel businesses, increased by 15% year-on-year to GBP10.8m (2016: GBP9.4m) and operating profit rose by 20% to GBP0.8m (2016: GBP0.7m).
Our Exidor business is the UK market leader in panic and emergency exit door hardware. Its products are for life-critical applications and Exidor operates in a highly regulated market. Customers place great value on Exidor's heritage as a British designer and manufacturer, which delivers high quality, certified products. We are re-engineering the product range to support our growth drive and continue to target overseas sales while maintaining Exidor's leading position in the UK. The business delivered good growth and we are implementing lean manufacturing initiatives which will help to reduce costs and improve margins.
Petrel has a well-established reputation for designing and manufacturing high quality lighting and control equipment for use in hazardous or demanding environments. It supplies customers across the UK and Europe as well as internationally. Revenue growth over the year was very good and we are encouraged by the progress being made outside Petrel's traditional markets of oil & gas. The transition to LED lighting remains a key focus as well as developing the business's portable light fittings range. Approximately 31.3% of sales (2016: 11.8%) were generated from portable lighting and LED products over the year and this percentage should rise further. We have also expanded Petrel's commercial and technical resource to support ongoing growth.
Outlook
We expect further profitable revenue growth in the next financial year supported by major new contracts coming on stream.
Kevin Nolan
Chief Executive
22 May 2017
Finance Review
Overview
Sales increased by 10% during the year to GBP32.1m (2016: GBP29.1m). Gross profit margin increased to 21.6% from 20.3% in 2016.
Underlying profit before tax increased to GBP0.6m (2016: GBP0.2m). Diluted underlying earnings per share increased to 4.5p (2016: 1.4p).
The IFRS results show a loss of GBP1.0m (2016: GBP0.3m) and a statutory loss per share of 12.2p (2016: loss per share 3.3p).
The income statement has been presented to reflect that operations relating to the Leicester foundry are now discontinued, as required by IFRS 5.
Non-underlying exceptional items
Exceptional items in the year included GBP0.1m (2016: GBP0.5m) relating to the realignment of the cost base of the Group, and GBP1.5m (2016: nil) relating to the impairment of the Leicester assets and lease contracts.
Tax
The Group's underlying tax charge for the year was GBP0.2m (2016: GBP0.1m).
Cash generation and financing
Operating cash inflow from continuing operations was GBP0.3m (2016: GBP1.9m).
Capital expenditure for the year increased to GBP3.9m (2016: GBP1.4m). This was ahead of depreciation and amortisation of GBP1.2m (2016: GBP1.2m), reflecting the investment in the new machining facility.
Our overdraft and net borrowings at 31 March 2017 increased to GBP6.8m (2016: GBP3.2m).
Foreign exchange
It is the Group's policy to minimise risk to exchange rate movements affecting sales and purchases by economically hedging or netting currency exposures at the time of commitment, or when there is a high probability of future commitment, using currency instruments (primarily forward exchange contracts). A proportion of forecast exposures are hedged depending on the level of confidence and hedging is topped up following regular reviews. On this basis up to 50% of the Group's annual exposures are likely to be hedged at any point in time and the Group's net transactional exposure to different currencies varies from time to time.
Approximately 40% of the Group's revenues are denominated in Euros. During the year to 31 March 2017 the average exchange rate used to translate into GBP sterling was EUR1.26 (31 March 2016: EUR1.34).
Pension
The Group's defined benefit pension scheme was closed to future accrual in 2007. Following the last triennial valuation, as at 1 April 2013, contributions were set at GBP0.3m per year for the period under review increasing by 3% per year thereafter based on a deficit recovery period of 14 years. The triennial valuation as at 1 April 2016 has not yet been finalised. However, the Group is confident that this will not result in a materially increased deficit contribution, albeit at the expense of a longer deficit recovery period due to lower gilt yields.
The pension expense for the defined benefit scheme was GBP0.4m in 2017 (2016: GBP0.4m), and is shown in non-underlying. The Group cash contribution during the year was GBP0.3m (2016: GBP0.3m).
The Group operates a defined contribution pension scheme for its current employees. The cost of GBP0.4m (2016: GBP0.3m) is included within underlying operating performance.
The IAS 19 deficit at 31 March 2017 was GBP5.2m (2016: GBP4.7m). The increase principally reflects the decrease in the discount rate used to calculate scheme liabilities, as a consequence of a fall in bond yields over the last year, partially offset by the over performance of assets against expected levels.
David Roberts
22 May 2017
Consolidated Income Statement
for the year ended 31 March 2017
Hot Features
Premium
Year ended 31 March Year ended 31 March
2017 2016
----------------------------------------- --------------------------------------
(+) (+) Non-
Note Underlying Non-underlying Total Underlying underlying Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 3 32,119 - 32,119 29,120 - 29,120
Cost of sales (25,173) - (25,173) (23,208) - (23,208)
Gross profit 6,946 - 6,946 5,912 - 5,912
Other operating
expenses 6 (6,203) (365) (6,568) (5,529) (427) (5,956)
----------- ----------------- --------- ----------- -------------- ---------
Operating
profit/ (loss) 743 (365) 378 383 (427) (44)
Finance costs 4 (164) (160) (324) (150) (142) (292)
----------- ----------------- --------- ----------- -------------- ---------
Profit/ (loss)
before tax 579 (525) 54 233 (569) (336)
Tax (expense)/
credit (205) 105 (100) (119) 104 (15)
----------- ----------------- --------- ----------- -------------- ---------
Profit/ (loss)
for the year
from continuing
operations 374 (420) (46) 114 (465) (351)
----------- ----------------- --------- ----------- -------------- ---------
Discontinued
operations
Profit/ (loss)
for the year
from discontinued
operations 219 (1,146) (927) 336 (246) 90
----------- ----------------- --------- ----------- -------------- ---------
Profit/ (loss)
for the year
attributable
to equity holders
of the parent
company 593 (1,566) (973) 450 (711) (261)
=========== ================= ========= =========== ============== =========
Earnings/ (loss)
per share from
continuing operations:
Basic 5 (0.6)p (4.4)p
Underlying 5 4.7p 1.5p
Diluted 5 (0.6)p (4.4)p
Diluted underlying 5 4.5p 1.4p
----------- ----------------- --------- ----------- -------------- ---------
Earnings/ (loss)
per share from
discontinued
operations:
Basic 5 (11.6)p 1.1p
Underlying 5 2.8p 4.2p
Diluted 5 (11.6)p 1.1p
Diluted underlying 5 2.6p 4.1p
----------- ----------------- --------- ----------- -------------- ---------
Total earnings/
(loss) per
share:
Basic 5 (12.2)p (3.3)p
Underlying 5 7.5p 5.7p
Diluted 5 (12.2)p (3.3)p
Diluted underlying 5 7.1p 5.5p
----------- ----------------- --------- ----------- -------------- ---------
(+) Non-underlying items represent exceptional
items as disclosed in note 6, administration
costs of the pension scheme and net financing
costs on pension obligations, share based payment
costs and the associated tax impact of these
items.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2017
2017 2016
GBP000 GBP000
Loss for the year (973) (261)
Other comprehensive income
Reclassification for cash
flow hedge included in sales (87) (419)
Movements in fair value on
cash flow hedges taken to
other comprehensive income 419 (193)
Deferred tax on movement
in cash flow hedges (60) 123
Movement on deferred tax
relating to rate change (1) (9)
-------- --------
Net other comprehensive income
that may be recycled to profit
and loss 271 (498)
Re-measurement losses on
pension assets and liabilities (612) (254)
Deferred/ current tax on
re-measurement losses on
pension scheme 122 51
Movement on deferred tax
on re-measurement losses
relating to rate change (52) (93)
-------- --------
Net other comprehensive loss
that will not be recycled
to profit and loss (542) (296)
Other comprehensive loss
for the year net of tax (271) (794)
Total comprehensive loss
for the period attributable
to equity holders of the
parent Company (1,244) (1,055)
======== ========
Consolidated Balance Sheet
at 31 March 2017
Note 31 March 31 March
2017 2016
GBP000 GBP000
Non-current assets
Property, plant and
equipment 10,179 8,112
Intangible assets 461 387
Deferred tax assets 1,498 1,370
--------- ---------
12,138 9,869
Current assets
Inventories 3,347 2,899
Trade and other receivables 7,556 6,195
10,903 9,094
Total assets 23,041 18,963
========= =========
Current liabilities
Financial liabilities 7 5,520 2,941
Trade and other payables 6,899 5,727
12,419 8,668
Non-current liabilities
Financial liabilities 7 1,308 251
Deferred tax 27 59
Provisions 200 200
Defined benefit pension
scheme deficit 8 5,209 4,692
--------- ---------
6,744 5,202
Total liabilities 19,163 13,870
Capital and reserves
Share capital 1,990 1,990
Share premium 1,269 1,269
Capital redemption reserve 109 109
Hedging reserve (72) (343)
Retained earnings 582 2,068
--------- ---------
Total equity 3,878 5,093
Total equity and liabilities 23,041 18,963
========= =========
Consolidated Cash Flow Statement
for the year ended 31 March 2017
Year Year
ended ended
31 March 31 March
2017 2016
GBP000 GBP000
Operating activities
Profit/ (loss) for the
year before tax 54 (336)
Adjustments to reconcile
profit/ (loss) for the
year to net cash (outflow)/
inflow from operating activities:
Net finance costs excluding
pensions 164 150
Depreciation of property,
plant and equipment 1,125 1,104
Amortisation of software 90 97
Amortisation and impairment
of development costs 7 11
Profit on disposal of property,
plant and equipment (1) (12)
Share based payments 28 53
Difference between pension
contributions paid and
amounts recognised in the
Consolidated Income Statement (95) (106)
(Increase)/ decrease in
inventories (676) 934
(Increase)/ decrease in
receivables (1,664) 880
Increase/ (decrease) in
payables 1,220 (874)
Income taxes received - 1
---------- ----------
Cash inflow from continuing
operations 252 1,902
Cash (outflow)/ inflow
from discontinued operations (358) 378
Net cash (outflow)/ inflow
from operating activities (106) 2,280
---------- ----------
Investing activities
Purchase of property,
plant and equipment (3,732) (1,418)
Purchase of software (41) (31)
Development costs (133) (12)
Disposal of plant and equipment 9 33
Net cash outflow from investing
activities (3,897) (1,428)
---------- ----------
Financing activities
Interest paid (164) (150)
Repayment of asset loans (162) (162)
Net invoice finance draw
down/ (repayment) 1,421 (459)
Import loan facility draw
down 1,235 -
Finance leases taken out 1,583 84
Net cash inflow/ (outflow)
from financing activities 3,913 (687)
---------- ----------
Net (decrease)/ increase
in cash and cash equivalents (90) 165
Cash and cash equivalents
at the start of the year (126) (291)
Cash and cash equivalents
at the end of the year (216) (126)
========== ----------
Cash and cash equivalents
included in discontinued
operations (332) (479)
Cash and cash equivalents
for continuing operations 116 353
========== ==========
Cash and cash equivalents
comprise:
Bank overdraft (216) (126)
---------- ----------
(216) (126)
========== ==========
Consolidated statement of changes in equity
Attributable
to equity
Share Capital holders
Share premium redemption Hedging Retained of the
capital account reserve reserve earnings parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
April 2015 1,990 1,269 109 155 2,586 6,109
Loss for the
year - - - - (261) (261)
Other comprehensive
income for the
year net of tax - - - (498) (296) (794)
--------- --------- ------------ --------- ---------- -------------
Total comprehensive
income/ (expense) - - - (498) (557) (1,055)
Share based payment - - - - 53 53
Deferred tax
on employee share
options - - - - (14) (14)
--------- --------- ------------ --------- ---------- -------------
Total of transactions
with shareholders - - - - 39 39
Balance as at
1 April 2016 1,990 1,269 109 (343) 2,068 5,093
Loss for the
year - - - - (973) (973)
Other comprehensive
income for the
year net of tax - - - 271 (542) (271)
--------- --------- ------------ --------- ---------- -------------
Total comprehensive
income/ (expense) - - - 271 (1,515) (1,244)
Share based payments - - - - 28 28
Deferred tax
on employee share
options - - - - 1 1
--------- --------- ------------ --------- ---------- -------------
Total of transactions
with shareholders - - - - 29 29
Balance at 31
March 2017 1,990 1,269 109 (72) 582 3,878
========= ========= ============ ========= ========== =============
Share premium account
The share premium account balance includes the proceeds that were above the nominal value from issuance of the Company's equity share capital comprising 25p shares.
Capital redemption reserve
The capital redemption reserve has arisen on the cancellation of previously issued shares and represents the nominal value of those shares cancelled.
Hedging reserve
The hedging reserve records the effective portion of the net change in the fair value of the cash flow hedging instruments related to hedged transactions that have not yet occurred.
Retained earnings
Retained earnings include the accumulated profits and losses arising from the Consolidated Income Statement and certain items from the Statement of Comprehensive Income attributable to equity shareholders, less distributions to shareholders.
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRS
The Group's and Company's financial statements of Chamberlin for the year ended 31 March 2017 were authorised for issue by the board of directors on 22 May 2017 and the balance sheets were signed on the board's behalf by Kevin Nolan and David Roberts. The Company is a public limited Company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.
The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The Company's financial statements have been prepared in accordance with IFRS as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006.
The financial information set out in this announcement does not constitute the statutory accounts of the Group for the years to 31 March 2017 or 31 March 2016 but is derived from the 2017 Annual Report and Accounts. The Annual Report and Accounts for 2016 have been delivered to the Registrar of Companies and the Group Annual Report and Accounts for 2017 will be delivered to the Registrar of Companies in due course. The auditors, Grant Thornton UK LLP, have reported on the accounts for the year ended 31 March 2017 and have given an unqualified report which does not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006 nor an emphasis of matter paragraph.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (GBP000) except when otherwise indicated. The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006 not to publish its individual income statement and related notes.
Basis of consolidation
The consolidated financial statements comprise the financial statements of Chamberlin plc and its subsidiaries as at 31 March each year. The financial statements of subsidiaries are prepared for the same reporting year as the parent Company, using consistent accounting policies. All inter-Company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.
Accounting policies
The preliminary announcement has been prepared on the same basis as the financial statements for the year ended 31 March 2017.
Going concern
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the Financial Statements.
3. SEGMENTAL ANALYSIS
For management purposes, the Group is organised into two operating divisions according to the nature of the products and services. Operating segments within those divisions are combined on the basis of their similar long term characteristics and similar nature of their products, services and end users as follows:
The Foundries segment is a supplier of iron castings, in raw or machined form, to a variety of industrial customers who incorporate the castings into their own products or carry out further machining or assembly operations on the castings before selling them on to their customers.
The Engineering segment provides manufactured and imported products to distributors and end-users operating in the safety and security markets. The products fall into the categories of door hardware, hazardous area lighting and control gear.
Management monitors the operating results of its divisions separately for the purposes of making decisions about resource allocation and performance assessment. The Chief Operating Decision Maker is the Chief Executive.
(i) By operating segment
Segmental operating
Segmental revenue profit
Year ended 2017 2016 2017 2016
GBP000 GBP000 GBP000 GBP000
Foundries 21,333 19,767 1,188 764
Engineering 10,786 9,353 816 679
--------- --------- ----------------- --------
Continuing operations 32,119 29,120 2,004 1,443
Discontinued operations 2,810 5,868 296 448
Segmental results 34,929 34,988 2,300 1,891
========= ========= ================= ========
Reconciliation of reported
segmental operating profit
Segment operating profit 2,300 1,891
Shared costs (excluding
share based payment charge) (1,261) (1,060)
Exceptional and non-underlying
costs (365) (427)
Net finance costs (324) (292)
Loss from discontinued
operation (296) (448)
Profit/ (loss) before tax
from continuing operations 54 (336)
Segmental assets
Foundries 16,861 13,560
Engineering 5,508 4,768
----------------- --------
22,369 18,328
----------------- --------
Segmental liabilities
Foundries (5,051) (4,313)
Engineering (2,048) (1,614)
----------------- --------
(7,099) (5,927)
----------------- --------
Segmental net assets 15,270 12,401
Unallocated net liabilities (11,392) (7,308)
Total net assets 3,878 5,093
================= ========
Unallocated net liabilities include the pension liability of GBP5,209,000 (2016: GBP4,692,000), financial liabilities of GBP6,828,000 (2016: GBP3,192,000), deferred tax asset of GBP645,000 (2016: GBP564,000) and other assets of Nil (2016: GBP12,000).
Capital expenditure,
depreciation and amortisation
and impairment
Capital additions Foundries Engineering Total
2017 2016 2017 2016 2017 2016
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Property, plant
and equipment 3,611 1,381 127 87 3,738 1,468
Software 35 13 6 18 41 31
Development costs - - 133 12 133 12
Depreciation, amortisation Foundries Engineering Total
and impairment
2017 2016 2017 2016 2017 2016
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Property, plant
and equipment (984) (985) (213) (250) (1,197) (1,235)
Software (81) (85) (12) (12) (93) (97)
Development costs - - (7) (11) (7) (11)
(ii) By geographical segment
2017 2016
Revenue by location of customer GBP000 GBP000
United Kingdom 15,031 15,588
Italy 4,702 3,343
Germany 3,736 4,192
Rest of Europe 6,159 3,824
Other countries 2,491 2,173
------- -------
32,119 29,120
======= =======
4. FINANCE COSTS
2017 2016
GBP000 GBP000
Bank overdraft interest payable (164) (150)
Finance cost of pensions (160) (142)
------- -------
(324) (292)
======= =======
5. EARNINGS/ (LOSS) PER SHARE
The calculation of earnings/ (loss) per share is based on the profit attributable to shareholders and the weighted average number of ordinary shares in issue. In calculating the diluted earnings/ (loss) per share, adjustment has been made for the dilutive effect of outstanding share options. Underlying earnings/ (loss) per share, which excludes non-underlying items, as analysed below, has also been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group. Exceptional costs are detailed in note 6.
2017 2016
GBP000 GBP000
Loss for basic earnings per share (973) (261)
Exceptional costs- continuing operations 138 143
Exceptional costs- discontinued operations 1,451 320
Net financing costs and service cost
on pension obligations 359 372
Share based payment charge 28 54
Taxation effect of the above (410) (178)
Profit for the year from discontinued
operations (219) (336)
Earnings for underlying earnings per
share 374 114
======= =======
2017 2016
Number Number
'000 '000
Weighted average number of ordinary
shares 7,958 7,958
Adjustment to reflect shares under
options 350 160
------- -------
Weighted average number of ordinary
shares - fully diluted 8,308 8,118
======= =======
As at 31 March 2017 and 31 March 2016 there is no adjustment in the total diluted loss per share calculation for the 350,000 and 160,300 shares respectively under option as they are required to be excluded from the weighted average number of shares for diluted loss per share as they are anti-dilutive for the period then ended.
6. EXCEPTIONAL COSTS AND NON-UNDERLYING
2017 2016
GBP000 GBP000
Group reorganisation 138 143
Exceptional costs 138 143
Share based payment charge 28 54
Defined benefit pension scheme administration
costs 199 230
------- -------
Non-underlying other operating expenses 365 427
Finance cost of pensions 160 142
Taxation
- tax effect of exceptional and non-underlying
costs (105) (104)
------- -------
420 465
------- -------
Non-underlying exceptional costs of
discontinued operation 1,451 320
Tax effect of exceptional costs (305) (74)
------ -----
1,146 246
------ -----
During 2016 and continuing into 2017 the Group continues to rationalise its cost base. Group reorganisation costs, including redundancy and recruitment, relate to this rationalisation.
During 2017 the Group took the decision to close the Leicester foundry. Non-underlying exceptional costs of discontinued operations, including asset impairment, redundancy and site clean up costs, relate to this closure.
7. FINANCIAL LIABILITIES
2017 2016
GBP000 GBP000
Current liabilities
Bank overdraft 216 126
Current instalments due on asset finance
loans 200 200
Invoice finance facility 3,510 2,582
Import loan facility 1,235 -
Current instalments due on finance
leases 359 33
5,520 2,941
Non-current liabilities
Instalments due on asset finance loans - 200
Instalments due on finance leases 1,308 51
------- -------
Total financial liabilities 6,828 3,192
------- -------
The overdraft is held with HSBC Bank plc as part of the Group facility of GBP500,000, is secured on all assets of the business, is repayable on demand and is renewable in March 2018. Interest is payable at 2.0% (2016: 2.0%) over base rate.
Asset finance loans are secured against various items of plant and machinery across the Group. These loans are repayable by monthly instalments for a period of one year to March 2018. Interest is payable at 3.25% over base rate.
The import loan facility is used to facilitate the purchase of equipment for the new machine centre. Once each asset is commissioned the import loan facility is repaid in full, facilitated by a sale and lease back on finance lease. Interest is payable at 3.25% over base rate.
Other finance leases are secured against the specific item to which they relate. These leases are repayable by monthly instalments for a period of 5 years to March 2022. Interest is payable at fixed amounts that range between 3.1% and 6.1%.
Invoice finance balances are secured against the trade receivables of the Group and are repayable on demand. Interest is payable at 2.3% over base rate. The maximum facility as at 31 March 2017 is GBP7.0m. Management have assessed the treatment of the financing arrangements and have determined it is appropriate to recognise trade receivables and invoice finance liabilities separately.
8. PENSIONS ARRANGEMENTS
During the year, the Group operated funded defined benefit and defined contribution pension schemes for the majority of its employees, these being established under trusts with the assets held separately from those of the Group. The pension operating cost for the Group defined benefit scheme for 2017 was GBP199,000 (2016: GBP230,000) plus GBP160,000 of financing cost (2016: GBP142,000).
The other schemes within the Group are defined contribution schemes and the pension cost represents contributions payable. The total cost of defined contributions schemes was GBP353,000 (2016: GBP331,000). The notes below relate to the defined benefit scheme.
The actuarial liabilities have been calculated using the Projected Unit method. The major assumptions used by the actuary were (in nominal terms):-
31 March 31 March 31 March
2017 2016 2015
Salary increases n/a n/a n/a
Pension increases (post
1997) 3.3% 2.9% 2.9%
Discount rate 2.5% 3.5% 3.2%
Inflation assumption
- RPI 3.3% 2.9% 2.9%
Inflation assumption
- CPI 2.3% 2.1% 1.8%
Demographic assumptions are all based on the S2PA (2016: S1NA) mortality tables with a 1% annual increase. The post retirement mortality assumptions allow for expected increases in longevity. The current disclosures relate to assumptions based on longevity in years following retirement as of the balance sheet date, with future pensions relating to an employee retiring in 2032.
2017 2016
Years Years
Current pensioner at 65
- male 21.1 21.4
* female 22.9 23.7
Future pensioner at 65
- male 22.1 22.4
* female 24.0 24.8
The scheme was closed to future accrual with effect from 30th November 2007, after which the Company's regular contribution rate reduced to zero (previously the rate had been 9.1% of members' pensionable salaries).
The triennial valuation as at 1 April 2016 is currently being negotiated. The triennial valuation as at 1 April 2013 concluded that in return for maintaining the previous contribution arrangements and extending the deficit reduction period to 2028, the Company has given security over the Group's land and buildings to the pension scheme. With effect from 1 April 2017 deficit reduction contributions will increase to GBP21,890 per month (previously GBP21,252 per month), with a 3% annual increase thereafter.
The contributions expected to be paid during the year to 31 March 2018 are GBP263,000.
The scheme assets are stated at the market values at the respective balance sheet dates. The assets and liabilities of the scheme were:
2017 2016
GBP000 GBP000
Equities/ diversified
growth fund 12,325 11,719
Bonds 1,143 1,123
Insured pensioner assets 30 9
Cash 50 123
--------- ---------
Market value of assets 13,548 12,974
Actuarial value of liability (18,757) (17,666)
--------- ---------
Scheme deficit (5,209) (4,692)
Related deferred tax
asset 886 845
--------- ---------
Net pension liability (4,323) (3,847)
--------- ---------
2017 2016
Net benefit expense recognised GBP000 GBP000
in profit and loss
Operating costs (199) (230)
Net interest expense (160) (142)
-------- --------
(359) (372)
-------- --------
Re-measurement losses/ (gains) 2017 2016
in other comprehensive income GBP000 GBP000
Actuarial losses/ (gains) arising
from changes in financial assumptions 2,703 (575)
Actuarial gains arising from
changes in demographic assumptions (599) -
Experience adjustments (254) (5)
Return on assets (excluding
interest income) (1,238) 834
-------- --------
612 254
-------- --------
2017 2016
GBP000 GBP000
Actual return on plan
assets 1,673 (396)
-------- --------
Movement in deficit during 2017 2016
the year GBP000 GBP000
Deficit in scheme at
beginning of year (4,692) (4,544)
Employer contributions 255 248
Net interest expense (160) (142)
Actuarial loss (612) (254)
-------- --------
Deficit in scheme at
end of year (5,209) (4,692)
-------- --------
Movement in scheme assets 2017 2016
GBP000 GBP000
Fair value at beginning
of year 12,974 14,008
Interest income on scheme
assets 435 438
Return on assets (excluding
interest income) 1,238 (834)
Employer contributions 255 248
Benefits paid (1,354) (886)
-------- --------
Fair value at end of
year 13,548 12,974
-------- --------
Movement in scheme liabilities 2017 2016
GBP000 GBP000
Benefit obligation at start
of year 17,666 18,552
Interest cost 595 580
Actuarial losses/ (gains) arising
from changes in financial assumptions 2,703 (575)
Actuarial gains arising from
changes in demographic assumptions (599) -
Experience adjustments (254) (5)
Benefits paid (1,354) (886)
-------- --------
Benefit obligation at end of
year 18,757 17,666
-------- --------
The weighted average duration of the pension scheme liabilities are 14.0 years (2016: 14.5 years).
A quantitative sensitivity analysis for significant assumptions as at 31 March 2017 is as shown below:
2017
Present value of scheme liabilities GBP000
when changing the following assumptions:
Discount rate increased by 1% p.a. 16,443
RPI and CPI increased by 1% p.a. 19,859
Mortality- members assumed to be
their actual age as opposed to 1
year older 19,575
The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligations as a result of reasonable changes in key assumptions occurring at the end of the year.
9. REPORT AND ACCOUNTS
Copies of the Annual Report will be available on the Group's website, www.chamberlin.co.uk from 24 June 2017 and from the Group's head office at Chuckery Road, Walsall, West Midlands, WS1 2DU. The AGM will be held on 20 July 2017 at Chuckery Road, Walsall, West Midlands, WS1 2DU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGZKNZMGNZM
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