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CMH Chamberlin Plc

1.70
0.00 (0.00%)
Last Updated: 08:00:00
Delayed by 15 minutes
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% 1.70 1.60 1.80 1.70 1.70 1.70 0.00 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Engineering Services 20.72M -125k -0.0007 -24.29 3.05M

Chamberlin PLC Half-year Report (3522Q)

29/11/2016 7:00am

UK Regulatory


Chamberlin (LSE:CMH)
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TIDMCMH

RNS Number : 3522Q

Chamberlin PLC

29 November 2016

29 November 2016

AIM: CMH

CHAMBERLIN PLC

("Chamberlin" or "the Company" or "the Group")

Half Year Results

For the six months to 30 September 2016

Key Points

-- H1 results in line with management expectations - Group remains on track to achieve market expectations for the full year

   --      Revenues of GBP16.4m (2015: GBP18.0m) - with the reduction mainly in the Leicester foundry 
   --      Gross margin percentage increased to 19.9% (2015: 17.5%) 
   --      Underlying profit before tax of GBP8,000 (2015: GBP57,000) 

Statutory loss after tax was GBP391,000 (2015: loss of GBP367,000)

   --      Underlying basic loss per share was 0.9p (2015: earnings per share of 0.2p) 

Statutory basic loss per share was 4.9p (2015: loss of 4.6p)

   --      Major strategic investment of GBP3.8m in machining capability commenced: 

o will support ongoing capacity utilisation at flagship foundry in Walsall

o will generate incremental sales from January 2017

-- Walsall foundry promoted in June to "Category A" supplier by major customer, IHI Europe Ltd:

o one of only two suppliers to IHI Europe Ltd to hold this status

o opens up new opportunities

   --      Engineering division revenues increase by 8.2%.  Order intake increase by 17% 

-- Post period, decision taken to commence orderly wind-down and closure of non-core Leicester foundry

   --      Board remains confident about upwards momentum in business performance 

o underpinned by major new contracts entering production at Walsall foundry

Chairman, Keith Butler-Wheelhouse, commented:

"Results for the first half are in line with management expectations and reflect the anticipated picture across our foundry activities.

We recently took the difficult decision to close our non-core foundry at Leicester, the least specialised of the Group's three foundries, which has been suffering from reducing demand. We are now close to completing our initial investment in new machining capability at Walsall, which is opening up additional opportunities and underlines Walsall's ability to deliver a world class product at a globally competitive cost.

Looking ahead, we believe that the Group remains well placed to achieve existing market expectations of underlying profitability for the financial year. We also remain very encouraged about prospects for an upward trajectory in performance, underpinned by the major contract wins at Walsall which will enter production in January 2017.

We look forward to providing a further update on progress in due course."

Enquiries

 
 Chamberlin plc                    T: 020 3178 6378 (today) 
  Kevin Nolan, Chief Executive      / 01922 707100 
  David Roberts, Finance 
  Director 
 
 Panmure Gordon                    T: 020 7886 2500 
  (Nominated Adviser and 
  Broker) 
  Adam James, Peter Steel 
 
 KTZ Communications                T: 020 3178 6378 
  (Financial PR) 
  Katie Tzouliadis, Viktoria 
  Langley, Emma Pearson 
 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

CHAIRMAN'S STATEMENT

Introduction

The Group's first half performance is in line with management expectations and, like last year, we anticipate that Chamberlin's overall full year performance will be strongly weighted towards the second half of the financial year. The underlying trading picture shows an ongoing and material improvement in profitability at our Walsall foundry which continues to underpin overall results from our foundries division. We expect the Walsall foundry to continue to make further progress, supported by our investment in new machining capability, and view prospects very positively. Revenues from the Group's engineering operations are growing as we focus on the technical development of our product and exports.

As recently announced, regretfully we have taken the difficult decision to wind-down and close our foundry at Leicester. Demand at this foundry, whose area of activity is the least specialised, has been subdued for many years and it is clear that production is no longer economically viable. We expect operations at Leicester to cease by the end of the year and, as reported previously, its closure is not expected to impact existing market forecasts for the Group's underlying profit before tax for the year.

The construction of the new machining facility to support our foundry activities continues to plan, and the new facility will be operational in January 2017. This initiative is an exciting development which we expect will open up significant new long term growth opportunities, with Walsall positioned as the only fully integrated supplier of grey iron bearing housings in Europe.

Results

The Group generated revenues of GBP16.4m for the six months to 30 September 2016 (2015: GBP18.0m), with the Leicester foundry accounting for GBP1.4m of the GBP1.6m reduction.

Approximately 40% of Group sales are denominated in Euros, which were transacted at an average rate of EUR1.31 over the six months to 30 September 2016 (2015: EUR1.34). This has contributed GBP0.1m to Group revenues and profits. As the pre-Brexit hedges unwind, we expect revenue in the second half will benefit from the current weak Sterling.

The Group's gross margin percentage has increased by over two percentage points to 19.9% or GBP3.3m (2015: 17.5% and GBP3.2m). This reflected both the favourable currency impact and cost reduction, with restructuring costs of GBP0.2m incurred during the period.

As expected, underlying profit before tax was GBP8,000 (2015: GBP57,000) and the underlying basic loss after tax per share was 0.9p (2015: earnings of 0.2p).

On a statutory basis the Group generated a loss of GBP0.4m (2015: loss of GBP0.4m). This is after restructuring costs of GBP0.2m (2015: GBP0.3m) and administration and finance costs on the closed pension schemes of GBP0.2m (2015: GBP0.2m). The diluted loss per share was 4.9p (2015: loss of 4.6p).

The net debt position at 30 September 2016 was GBP5.3m (30 September 2015: GBP4.3m and 31 March 2016: GBP3.2m). The Group has debt facilities of GBP8.6m. We invested GBP0.7m in the construction of the Group's new machining facility, which was funded through asset finance.

Operations

The three foundries at Walsall, Leicester and Scunthorpe generated total revenues of GBP11.3m over the half year (2015: GBP13.3m), with 70% (or GBP1.4m) of the year-on-year decrease reflecting the contraction in sales at the Leicester foundry. Despite this, the operating profit contribution from our foundry activities was 15% higher than last year at GBP0.4m (2015: GBP0.3m), which reflected continuing progress at Walsall. Gross operating margins increased to 3.1% from 2.3%, helped by our focus on continuous improvement and cost reductions.

As expected, revenues at the Walsall foundry, which produces small castings with complex internal geometry, decreased by 4.9% as the legacy turbo charger bearing housing work entered its final phase of life cycle. However, the major new contracts, announced in late 2015, for turbo charger bearing housings for diesel engines in passenger cars, will enter production in the second half of the financial year, with volumes expected to increase significantly in 2017.

As we have announced previously, we are investing in a machining capability for Walsall and the construction of the new facility is on track. The new facility will generate incremental sales from January 2017 onwards. We remain especially excited about the additional opportunities this new capability will open up for us over the medium term.

In June the Walsall foundry was promoted to 'Category A' supplier status by one of its major customers, IHI Europe Ltd, which provides charging systems in the European turbocharger sector. The foundry's promotion to this categorisation is significant because it means that Chamberlin will now be automatically included in quoting for all future bearing housing opportunities at IHI Europe Ltd. It is one of only two suppliers which holds this status.

The Scunthorpe foundry, which produces heavy castings, has been impacted by adverse trading conditions in the power, construction and mining sectors, and revenues were 8.6% lower year-on-year. We have implemented cost base reductions and have also continued to make operational improvements together with price increases. These measures moved the foundry back into profitability.

The foundry at Leicester, which produces medium castings, continued to be affected by its lack of specialisation and its relative inability to compete against low cost countries. Revenues in the first half decreased by 43.5% year-on-year and it is with regret that we have concluded it is no longer economically viable. An orderly wind-down is now underway and will be completed by the end of 2016.

In the financial year to 31 March 2016, the Leicester foundry contributed sales of GBP5.9m of sales and an underlying profit before tax of GBP420,000. In the first half of the current financial year, Leicester contributed sales of approximately GBP1.8m and an underlying profit before tax of approximately GBP46,000.

The engineering division, which comprises Exidor, the UK market leader in panic and emergency exit door hardware, and Petrel, which manufactures lighting and control equipment for use in hazardous areas, saw revenues increase by 8.2% to GBP5.1m (2015: GBP4.7m). The operating profit contribution was broadly flat at GBP0.3m (2015: GBP0.3m). Petrel is continuing to further extend its product range into LEDs and our focus at both Petrel and Exidor is on increasing export sales, with both businesses competitive against European suppliers. As a result order intake for the first half was up 16.6% at Exidor and 18.8% at Petrel.

Outlook

Looking ahead, we believe that the Group remains well placed to achieve existing market expectations of underlying profitability for the financial year. We also remain very encouraged about prospects for an upward trajectory in performance, underpinned by the major contract wins at Walsall which should enter production in 2017.

The completion of new machining capability at Walsall will mark an important milestone for the foundry, which has undergone a period of significant transformation as we have upgraded and improved processes. We believe it opens up new opportunities and underlines Chamberlin's ability to deliver world class product on a globally competitive basis.

We look forward to providing a further update on progress in due course.

Keith Butler-Wheelhouse

Chairman

28 November 2016

Consolidated Income Statement

for the six months ended 30 September 2016

 
                                       Unaudited                               Unaudited 
                                    six months ended                        six months ended 
                                      30 September                            30 September                      Year ended 
                  Note                    2016                                    2015                         31 March 2016 
                        ---------------------------------------                                         --------------------------  ------------ 
                                                 #                                        #                                      # 
                        Underlying  Non-underlying        Total  Underlying  Non-underlying      Total  Underlying  Non-underlying         Total 
                            GBP000          GBP000       GBP000      GBP000          GBP000     GBP000      GBP000          GBP000        GBP000 
 Revenue                    16,446               -       16,446      18,039               -     18,039      34,988               -        34,988 
 Cost of sales            (13,172)               -     (13,172)    (14,879)               -   (14,879)    (27,657)               -      (27,657) 
 Gross profit                3,274               -        3,274       3,160               -      3,160       7,331               -         7,331 
 Other operating 
  expenses           7     (3,172)           (316)      (3,488)     (3,011)           (412)    (3,423)     (6,501)           (746)       (7,247) 
                        ----------  --------------  -----------  ----------  --------------  ---------  ----------  --------------  ------------ 
 Operating 
  profit/(loss)                102           (316)        (214)         149           (412)      (263)         830           (746)            84 
 Finance costs       3        (94)            (80)        (174)        (92)            (71)      (163)       (178)           (142)         (320) 
                        ----------  --------------  -----------  ----------  --------------  ---------  ----------  --------------  ------------ 
 Profit/(loss) 
  before tax                     8           (396)        (388)          57           (483)      (426)         652           (888)         (236) 
 Tax 
  (expense)/credit   4        (82)              79          (3)        (38)              97         59       (202)             177          (25) 
                        ----------  --------------  -----------  ----------  --------------  ---------  ----------  --------------  ------------ 
 (Loss)/ profit 
  for the period 
  from continuing 
  operations 
  attributable 
  to equity 
  holders 
  of the Parent 
  Company                     (74)           (317)        (391)          19           (386)      (367)         450           (711)         (261) 
                        ==========  ==============  ===========  ==========  ==============  =========  ==========  ==============  ============ 
 
 (Loss)/ earnings 
  per share: 
 Basic               5                                   (4.9)p                                 (4.6)p                                    (3.3)p 
 Underlying          5      (0.9)p                                     0.2p                                   5.7p 
 Diluted             5                                   (4.9)p                                 (4.6)p                                    (3.3)p 
 Diluted 
  underlying         5      (0.9)p                                     0.2p                                   5.5p 
 
 

(#) Non- underlying items represent exceptional costs as disclosed in note 7, administration costs of the pension scheme and net financing costs on pension obligations, share based payment costs and associated tax impact of these items.

Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2016

 
                                 Unaudited       Unaudited 
                                six months      six months 
                                     ended           ended    Year ended 
                              30 September    30 September      31 March 
                                      2016            2015          2016 
                                    GBP000          GBP000        GBP000 
 
 Loss for the period                 (391)           (367)         (261) 
 Other comprehensive 
  income 
 Reclassification 
  for cash flow 
  hedges included 
  in sales                           (593)           (183)         (419) 
 Movements in fair 
  value on cash 
  flow hedges taken 
  to other comprehensive 
  income                               253            (59)         (193) 
 Deferred tax on 
  movements in cash 
  flow hedges                           61              48           123 
 Movement on deferred 
  tax relating to 
  rate change                            -               -           (9) 
                            --------------  --------------  ------------ 
 Net other comprehensive 
  expense that may 
  be recycled to 
  profit and loss                    (279)           (194)         (498) 
 
   Re-measurement 
   (losses)/ gains 
   on pension assets 
   and liabilities                 (2,538)              74         (254) 
 Deferred/ current 
  tax on re-measurement 
  (losses)/ gains 
  on pension assets 
  and liabilities                      507            (15)            51 
 Movement on deferred 
  tax on measurement 
  losses relating 
  to rate change                         -               -          (93) 
                            --------------  --------------  ------------ 
 Net other comprehensive 
  (expense)/income 
  that will not 
  be reclassified 
  to profit and 
  loss                             (2,031)              59         (296) 
                            --------------  --------------  ------------ 
 
   Other comprehensive 
   expense for the 
   period net of 
   tax                             (2,310)           (135)         (794) 
 Total comprehensive 
  expense for the 
  period attributable 
  to equity holders 
  of the Parent 
  Company                          (2,701)           (502)       (1,055) 
                            ==============  ==============  ============ 
 

Consolidated Balance Sheet

At 30 September 2016

 
                                 Unaudited       Unaudited 
                              30 September    30 September   31 March 
                                      2016            2015       2016 
                                    GBP000          GBP000     GBP000 
 Non-current assets 
  Property, plant 
   and equipment                     8,878           8,423      8,112 
  Intangible assets                    402             397        387 
  Deferred tax 
   assets                            1,936           1,436      1,370 
                            --------------  --------------  --------- 
                                    11,216          10,256      9,869 
 Current assets 
  Inventories                        3,165           3,480      2,899 
  Trade and other 
   receivables                       7,047           6,889      6,195 
                                    10,212          10,369      9,094 
                            --------------  --------------  --------- 
 Total assets                       21,428          20,625     18,963 
                            ==============  ==============  ========= 
 
 Current liabilities 
  Financial liabilities              4,484           3,987      2,941 
  Trade and other 
   payables                          6,262           5,975      5,727 
                                    10,746           9,962      8,668 
                            --------------  --------------  --------- 
 Non-current liabilities 
  Financial liabilities                823             348        251 
  Deferred tax 
   liabilities                          59              66         59 
  Provisions                           200             200        200 
  Defined benefit 
   pension scheme 
   deficit                           7,182           4,417      4,692 
                                     8,264           5,031      5,202 
 
 Total liabilities                  19,010          14,993     13,870 
                            --------------  --------------  --------- 
 
 Capital and reserves 
  Share capital                      1,990           1,990      1,990 
  Share premium                      1,269           1,269      1,269 
  Capital redemption 
   reserve                             109             109        109 
  Hedging reserve                    (622)            (39)      (343) 
  Retained earnings                  (328)           2,303      2,068 
                            --------------  --------------  --------- 
 Total equity                        2,418           5,632      5,093 
                            --------------  --------------  --------- 
 
 Total equity and 
  liabilities                       21,428          20,625     18,963 
                            ==============  ==============  ========= 
 

Consolidated Cash Flow Statement

for the six months ended 30 September 2016

 
                                     Unaudited       Unaudited 
                                    six months      six months 
                                         ended           ended   Year ended 
                                  30 September    30 September     31 March 
                                          2016            2015         2016 
                                        GBP000          GBP000       GBP000 
 Operating activities 
 Loss for the period 
  before tax                             (388)           (426)        (236) 
 Adjustments for: 
 Net finance costs 
  excluding pensions                        94              92          178 
 Depreciation of property, 
  plant and equipment                      616             589        1,235 
 Amortisation of software                   35              59           97 
 Amortisation of development 
  costs                                      4               5           11 
 Profit on disposal 
  of property plant 
  and equipment                              -             (8)         (12) 
 Share based payments                       26              26           53 
 Difference between 
  pension contributions 
  paid and amounts 
  recognised in the 
  Income Statement                        (48)            (53)        (106) 
 (Increase)/ decrease 
  in inventories                         (266)             526        1,107 
 (Increase)/ decrease 
  in receivables                         (852)             735        1,421 
 Increase/ (decrease) 
  in payables                              194           (882)      (1,493) 
 Cash (outflow)/ inflow 
  from operations                        (585)             663        2,255 
 Income taxes received                       -               -            1 
 Net cash (outflow)/ 
  inflow from operating 
  activities                             (585)             663        2,256 
 
 Investing activities 
  Purchase of property, 
   plant and equipment                 (1,392)         (1,125)      (1,468) 
  Purchase of software                     (2)             (9)         (31) 
  Development costs                       (52)               -         (12) 
  Disposal of property, 
   plant and equipment                      10              21           33 
                                --------------  --------------  ----------- 
 Net cash outflow 
  from investing activities            (1,436)         (1,113)      (1,478) 
 
 Financing activities 
  Interest paid                           (94)            (92)        (178) 
  Repayment of asset 
   loans                                 (100)           (100)        (200) 
  Net invoice finance 
   drawdown                              1,460             484        (319) 
  Finance leases taken 
   out                                     672              71           84 
 
   Net cash inflow/(outflow) 
   from financing activities             1,938             363        (613) 
                                --------------  --------------  ----------- 
 
 
   Net (decrease)/ increase 
   in cash and cash 
   equivalents                            (83)            (87)          165 
 
 
   Cash and cash equivalents 
   at the start of the 
   period                                (126)           (291)        (291) 
                                --------------  --------------  ----------- 
 
   Cash and cash equivalents 
   at the end of the 
   period                                (209)           (378)        (126) 
                                ==============  ==============  =========== 
 Cash and cash equivalents 
  compromise: 
 
   (Overdraft)/ cash 
   at bank                               (209)           (378)        (126) 
                                ==============  ==============  =========== 
 

Consolidated Statement of Changes in Equity

for the six months ended 30 September 2016

 
                                                                                       Attributable 
                                                                                          to equity 
                                                    Capital                                 holders 
                             Share      Share    redemption    Hedging     Retained          of the 
                           capital    premium       reserve    reserve     earnings          parent 
 
                            GBP000     GBP000        GBP000     GBP000       GBP000          GBP000 
 
 At 1 April 2015             1,990      1,269           109        155        2,586           6,109 
 Loss for the 
  period                         -          -             -          -        (367)           (367) 
 Other comprehensive 
  (expense)/ income 
  for the period 
  net of tax                     -          -             -      (194)           59           (135) 
                         ---------  ---------  ------------  ---------  -----------  -------------- 
 Total comprehensive 
  expense                        -          -             -      (194)        (308)           (502) 
 Share based payments            -          -             -          -           26              26 
 Deferred tax 
  on employee share 
  options                        -          -             -          -          (1)             (1) 
                         ---------  ---------  ------------  ---------  -----------  -------------- 
 Total of transactions 
  with shareholders              -          -             -          -           25              25 
 
 At 30 September 
  2015                       1,990      1,269           109       (39)        2,303           5,632 
 
 Profit for the 
  period                         -          -             -          -          106             106 
 Other comprehensive 
  expense for the 
  period net of 
  tax                            -          -             -      (304)        (355)           (659) 
                         ---------  ---------  ------------  ---------  -----------  -------------- 
 Total comprehensive 
  expense                        -          -             -      (304)        (249)           (553) 
 Share based payments            -          -             -          -           27              27 
 Deferred tax 
  on employee share 
  options                        -          -             -          -         (13)            (13) 
                         ---------  ---------  ------------  ---------  -----------  -------------- 
 Total of transactions 
  with shareholders              -          -             -          -           14              14 
 
 At 1 April 2016             1,990      1,269           109      (343)        2,068           5,093 
 
 Loss for the 
  period                         -          -             -          -        (391)           (391) 
 Other comprehensive 
  expense for the 
  period net of 
  tax                            -          -             -      (279)      (2,031)         (2,310) 
 Total comprehensive 
  expense                        -          -             -      (279)      (2,422)         (2,701) 
 Share based payments            -          -             -          -           26              26 
 Total of transactions 
  with shareholders              -          -             -          -           26              26 
 
 At 30 September 
  2016                       1,990      1,269           109      (622)        (328)           2,418 
                         =========  =========  ============  =========  ===========  ============== 
 

Independent review report to Chamberlin plc

Introduction

We have been engaged by the Company to review the financial information in the half-yearly financial report for the six months ended 30 September 2016 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.

As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.

Our responsibility

Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2016 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.

GRANT THORNTON UK LLP

AUDITOR

Birmingham

28 November 2016

Notes to the Interim Financial statements

   1              General information and accounting policies 

This Interim Financial Report is unaudited, but has been reviewed by the Company's auditor having regard to the International Standard on Review Engagements (UK & Ireland) 2410 "Review of Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board for use in the UK. A copy of their unmodified review report is attached.

The interim condensed consolidated financial statements do not comprise the Group's statutory accounts as defined by section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2016 were approved by the board of directors on 23 May 2016 and were filed at Companies House. The auditor's report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.

Basis of preparation

The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

Accounting policies

The principal accounting policies applied in preparing the interim Financial Statements comply with IFRS as adopted by the European Union and are consistent with the policies set out in the Annual Report and Accounts for the year ended 31 March 2016.

No new standards or interpretations issued since 31 March 2016 have had a material impact on the accounting of the Group.

Hedge activities

At 30 September 2016 the Group held 18 months' worth of foreign currency forward contracts designated as hedges of expected future sales to customers in Europe for which the Group has highly probable forecasted transactions

Going concern

After making appropriate enquiries, the directors consider that the Group has adequate resources to continue in operation for the foreseeable future. In forming this view the directors have reviewed internal cashflow and profit forecasts in conjunction with the available headroom on the invoice finance and overdraft facility. For this reason, they continue to adopt the going concern basis in preparing the accounts.

   2              Segmental analysis 

For management purposes, the Group is organised into two operating divisions: Foundries and Engineering. The operating segments reporting format reflects the Group's management and internal reporting structures for the Chief Operating Decision Maker.

 
                                     Segmental revenue                         Segmental operating 
                                                                                      profit 
                                Unaudited                                            Unaudited 
                                      six     Unaudited                  Unaudited         six 
                                   months    six months         Year    six months      months         Year 
                                    ended         ended        ended         ended       ended        ended 
                                   30 Sep        30 Sep     31 March        30 Sep      30 Sep     31 March 
                                     2016          2015         2016          2016        2015         2016 
 
                                   GBP000        GBP000       GBP000        GBP000      GBP000       GBP000 
 
 Foundries                         11,327        13,306       25,635           355         308        1,212 
 Engineering                        5,119         4,733        9,353           310         338          679 
                       ------------------  ------------  -----------  ------------  ----------  ----------- 
 Segmental 
  results                          16,446        18,039       34,988           665         646        1,891 
                       ------------------  ------------  -----------  ------------  ----------  ----------- 
 
 Reconciliation of reported segmental operating 
  profit to (loss) before tax 
                                                                                     Unaudited 
                                                                         Unaudited         six 
                                                                        six months      months         Year 
                                                                             ended       ended        ended 
                                                                            30 Sep      30 Sep     31 March 
                                                                              2016        2015         2016 
 
                                                                            GBP000      GBP000       GBP000 
 Segmental 
  operating 
  profit                                                                       665         646        1,891 
 Shared costs                                                                (563)       (497)      (1,061) 
 Exceptional 
  and non-underlying 
  costs                                                                      (316)       (412)        (746) 
 Net finance 
  costs                                                                      (174)       (163)        (320) 
 Loss before 
  tax                                                                        (388)       (426)        (236) 
                                                                      ============  ==========  =========== 
 
 

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. The Engineering segment provides manufactured and imported products to distributors and end-users. The products fall into the categories of door hardware, hazardous area lighting and control gear and cable management.

Financing and income tax are managed on a Group basis and are not allocated to operating segments.

   3              Finance income and costs 
 
                                    Unaudited       Unaudited 
                                   six months      six months 
                                        ended           ended   Year ended 
                                 30 September    30 September     31 March 
                                         2016            2015         2016 
                                       GBP000          GBP000       GBP000 
 Interest on bank overdraft              (94)            (92)        (178) 
 Net interest on net defined 
  benefit pension liability              (80)            (71)        (142) 
                                        (174)           (163)        (320) 
                               ==============  ==============  =========== 
 
   4              Income tax expense 

An effective rate of tax for the six months to 30 September 2016 of 1% (30 September 2015: 14%) has been used in these interim statements.

The effective rate of tax is lower than the standard rate because of utilising losses brought forward to reduce the tax charge. The 2015 effective rate of tax is lower than the standard rate because of non-deductible expenses reducing the overall tax credit in the period.

The corporation tax rate fell from 21% for the year ended 31 March 2015 to 20% for the year ended 31 March 2016. The corporation tax rate will reduce to 19% from 1 April 2017 and to 18% by 1 April 2020, rate changes which were substantively enacted on 26 October 2015. It is not anticipated that the subsequent reduction to 18% will have a material effect on the Company's future current or deferred tax charges.

   5              (Loss)/ earnings per share 

The calculation of (Loss)/ earnings per share is based on the profit attributable to shareholders and the weighted average number of ordinary shares in issue. In calculating the diluted (loss)/ earnings per share, adjustment has been made for the dilutive effect of outstanding share options. Underlying (loss)/ earnings per share, which excludes exceptional costs, net financing cost of pension obligation, administration costs of the pension scheme and share based compensation, less related tax thereon, as analysed below, has been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group.

 
                                  Unaudited       Unaudited 
                                 six months      six months     Year ended 
                                      ended           ended       31 March 
                               30 September    30 September           2016 
                                       2016            2015 
                                     GBP000          GBP000         GBP000 
 (Loss)/ earnings for 
  basic earnings per share            (391)           (367)          (261) 
 Exceptional costs                      201             285            463 
 Net financing cost and 
  service cost on pension 
  obligation                            169             171            372 
 Share based payments 
  charge                                 26              27             53 
 Taxation effect of the 
  above                                (79)            (97)          (177) 
                             --------------  --------------  ------------- 
 
   Earnings for underlying 
   earnings per share                  (74)              19            450 
                             --------------  --------------  ------------- 
 
 
                                    Unaudited       Unaudited 
                                   six months      six months     Year ended 
                                        ended           ended       31 March 
                                 30 September    30 September           2016 
                                         2016            2015 
                                          000             000            000 
 Weighted average number 
  of ordinary shares                    7,958           7,958          7,958 
 Adjustment to reflect 
  dilutive shares under 
  option                                    -             180            160 
                               --------------  --------------  ------------- 
 
   Diluted weighted average 
   number of ordinary shares            7,958           8,138          8,118 
                               --------------  --------------  ------------- 
 

As at 30 September 2016 there is no adjustment to the 52,353 shares under option for the loss per share calculation as they are required to be excluded from the weighted average number of shares as they are anti-dilutive for the period then ended. As at 30 September 2015 and 31 March 2016 there is no adjustment for the 180,177 and 160,300 shares under option respectively for the diluted loss per share calculation 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              Pensions 

The Group operates a defined benefit pension scheme and a number of defined contribution pension schemes on behalf of its employees. For defined contribution schemes, contributions paid in the period are charged to the income statement. For the defined benefit scheme, actuarial calculations are performed in accordance with IAS 19 in order to arrive at the amounts to be charged in the income statement and recognised in the statement of comprehensive income. The defined benefit scheme is closed to new entrants and future accrual.

Under IAS 19, the Group recognises all movements in the actuarial funding position of the scheme in each period. This is likely to lead to volatility in shareholders' equity from period to period.

The IAS 19 figures are based on a number of actuarial assumptions as set out below, which the actuaries have confirmed they consider appropriate. The projected unit credit actuarial cost method has been used in the actuarial calculations.

 
                            30 September   30 September   31 March 
                                    2016           2015       2016 
 
 Salary increases                    n/a            n/a        n/a 
 Pension increases (post 
  1997)                             2.9%           2.9%       2.9% 
 Discount rate                      2.2%           3.7%       3.5% 
 Inflation assumption 
  - RPI                             3.0%           2.9%       2.9% 
 Inflation assumption 
  - CPI                             2.2%           1.8%       2.1% 
 

The demographic assumptions used for 30 September 2016, were the same as used in 31 March 2016, 30 September 2015 and the last full actuarial valuation performed as at 1 April 2013. The triennial valuation as at 1 April 2016 is currently underway.

The defined benefit scheme funding has changed under IAS 19 as follows:

 
                                         Unaudited                   Unaudited 
                                        six months                  six months      Year to 
   Funding status                               to                          to     31 March 
                                      30 September                30 September         2016 
                                              2016                        2015       GBP000 
                                            GBP000                      GBP000 
 Scheme assets at end 
  of period                                 13,220                      12,824       12,974 
 Benefit obligations at 
  end of period                           (20,402)                    (17,241)     (17,666) 
                          ------------------------  --------------------------  ----------- 
 
 Deficit in scheme                         (7,182)                     (4,417)      (4,692) 
 Related deferred tax 
  asset                                      1,293                         883          845 
                          ------------------------  --------------------------  ----------- 
 Net pension liability                     (5,889)                     (3,534)      (3,847) 
                          ========================  ==========================  =========== 
 
 

The increase in the net pension liability since March 2016 is mainly due to an increase in the value of liabilities as a consequence of a decrease in bond yields reducing the discount rate.

   7              Exceptional costs and non-underlying items 
 
                                   Unaudited       Unaudited 
                                  six months      six months     Year ended 
                                       ended           ended       31 March 
                                30 September    30 September           2016 
                                        2016            2015 
                                      GBP000          GBP000         GBP000 
 Group reorganisation                    202             285            463 
 Exceptional costs                       202             285            463 
                              ==============  ==============  ============= 
 
 Share based payment charge               26              27             53 
 Defined benefit pension 
  scheme administration 
  costs                                   88             100            230 
 
 Non-underlying other 
  operating expenses                     316             412            746 
                              ==============  ==============  ============= 
 
 
 Taxation 
 - tax effect of non-underlying 
  other operating expenses         (63)   (82)   (149) 
 
                                    253    330     597 
                                  =====  =====  ====== 
 

During the year ended March 2016, the Group continued to rationalise operations given the reduced levels of turnover seen in the Leicester and Scunthorpe foundries. Group reorganisation costs, including redundancy and recruitment, relate to this rationalisation.

Further reorganisation and redundancy costs were incurred during the current period as a result of actions taken to reduce headcount in response to decreased revenues at the Leicester site.

   8              Net debt 
 
                                    Unaudited       Unaudited 
                                   six months      six months     Year ended 
                                        ended           ended       31 March 
                                 30 September    30 September           2016 
                                         2016            2015 
                                       GBP000          GBP000         GBP000 
 
 Financial liabilities 
 Bank overdraft                           209             378            126 
 Current instalments due 
  on finance leases                        33              24             33 
 Current instalments due 
  on asset finance loans                  200             200            200 
 Invoice finance liability              4,042           3,385          2,582 
                               --------------  --------------  ------------- 
 Financial liabilities 
  due in less than one 
  year                                  4,484           3,987          2,941 
                               --------------  --------------  ------------- 
 
 Instalments due on finance 
  leases in greater than 
  one year                                723              48             51 
 Instalments due on asset 
  finance loans in greater 
  than one year                           100             300            200 
                               --------------  --------------  ------------- 
 Total financial liabilities              823             348            251 
                               --------------  --------------  ------------- 
 
 Net debt                               5,307           4,335          3,192 
                               ==============  ==============  ============= 
 
 Available facility                     6,960           6,178          5,836 
 Maximum available headroom             1,653           1,843          2,644 
 
   9              Interim report 

Copies of this interim results statement will be available on the Group's website, www.chamberlin.co.uk, and from the Group's headquarters at Chuckery Road, Walsall, West Midlands, WS1 2DU.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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