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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ibstock Plc | LSE:IBST | London | Ordinary Share | GB00BYXJC278 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.40 | 0.27% | 149.00 | 149.20 | 149.80 | 150.20 | 147.20 | 147.20 | 551,682 | 16:35:17 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Concrete Block And Brick | 405.84M | 21.06M | 0.0537 | 27.86 | 586.53M |
From Apr 2019 to Apr 2024
TIDMIBST
RNS Number : 5859N
Ibstock PLC
10 August 2017
Ibstock plc
Interim results for the six months ended 30 June 2017
Continued robust performance while investing in UK capacity to meet growing demand
Ibstock plc ('Ibstock' or the 'Group'), a leading manufacturer of clay bricks and concrete products with operations in the United Kingdom and the United States, announces its unaudited results for the six months ended 30 June 2017.
Results for the period:
Hot Features
Premium
Half year to 30 2017 2016 Change
June
--------------------- ----------- ----------- ----------
Revenue GBP228.3m GBP210.0m +8.7%
--------------------- ----------- ----------- ----------
Profit before tax GBP38.9m GBP37.9m +2.7%
--------------------- ----------- ----------- ----------
Profit before tax
pre-exceptional(1) GBP43.3m GBP37.7m +14.4%(1)
--------------------- ----------- ----------- ----------
Adjusted EBITDA(1) GBP59.7m GBP55.6m +7.4%
--------------------- ----------- ----------- ----------
Statutory basic
EPS 7.6 pence 7.4 pence +2.8%
--------------------- ----------- ----------- ----------
Adjusted basic
EPS(1) 9.5 pence 8.2 pence +16.0%
--------------------- ----------- ----------- ----------
Interim dividend 2.6 pence 2.4 pence +8.3%
--------------------- ----------- ----------- ----------
Financial Highlights:
n Strong growth in revenue and adjusted EBITDA
in line with management's expectations
n Net debt1 to EBITDA at 1.4x, after GBP17 million
of capex
n Return on capital employed1 at 19%, after
cumulative capex of GBP46 million on major projects
at Leicester and Lodge Lane, with returns to
come
n Continued strong underlying cash conversion1
n Successful refinance of debt in March 2017
n Interim dividend of 2.6 pence per share (2016:
2.4 pence per share) reflecting the Board's
policy of paying one-third of the prior year's
full year dividend
Operational Highlights
n UK Clay benefitting from good activity levels
within the UK new build housing sector with
brick volumes well ahead year-on-year
n Continued growth in UK Concrete
n New roof tile line at Forticrete now in production
with good demand take-up from major housebuilders
n Investment in additional UK brick capacity
to meet demand
* New 100m capacity brick plant in Leicestershire to
commence commissioning in Q4 2017 and will expand the
Group's UK brick capacity by c.13% when in full
production
* Capacity expansion project at Lodge Lane blue brick
plant in Cannock on schedule, with commissioning to
commence in Q4 2017
n US performance level year-on-year with a slowdown
in residential and non-residential projects
evident since the Spring
Wayne Sheppard, Chief Executive Officer of Ibstock plc, commented:
"The Group has delivered a robust first half performance. UK brick volumes were well ahead, driven by good activity levels in the UK new build housing sector and our concrete businesses also enjoyed solid growth.
"Against this backdrop of continued robust demand we are investing in the UK clay business to increase capacity. Our new brick factory in Leicestershire will begin commissioning in the final quarter of this year, with production to build progressively across 2018. When operating at its full capacity of 100m bricks per annum it will expand UK domestic brick production by 5%, adding a much needed new source of supply. A second project - to increase capacity at our blue brick plant at Cannock - is also on track.
"Looking ahead, the longer term fundamentals underpinning the new-build housing market in the UK - government support, good mortgage availability and an undersupply of new homes - remain in place, although we continue to be alert to any changes in customer confidence stemming from political uncertainty after the recent General Election result and the on-going Brexit negotiations.
"The Group remains strongly cash generative, we are investing for further growth, and our expectations for another year of progress are maintained."
(1 Alternative Performance Measures are described in Note 3 of the financial statements)
Results presentation
Ibstock is holding a presentation to analysts at 09:00 today at the offices of JP Morgan, 1 John Carpenter Street, London, EC4Y 0JP. Analysts wishing to attend should contact ibstock@citigatedr.co.uk to register.
Analysts unable to attend in person may listen to the presentation live by using the details below:
Webcast link: http://edge.media-server.com/m/p/qzojiw8m
Conference Call Dial-In Details: 0808 109 0700
Standard International Access: +44 (0) 20 3003 2666
Password: Ibstock
An archived version of today's webcast analyst presentation will be available on www.ibstockplc.com later today.
Enquiries
Ibstock (enquiries via Citigate Dewe Rogerson) Wayne Sheppard (CEO) Kevin Sims (CFO) Citigate Dewe Rogerson 020 7638 9571 Kevin Smith Nick Hayns
Notes to Editors:
Ibstock plc is a leading manufacturer of clay bricks, with a diversified range of clay and concrete products, and operations in the United Kingdom and the United States. Its principal products are clay bricks, brick components, concrete roof tiles, concrete substitutes for stone masonry, concrete fencing and pre-stressed concrete products.
The Group's four primary businesses are:
-- UK business:
-- Ibstock Brick: The leading manufacturer by volume of clay bricks sold in the United Kingdom. With 19 manufacturing plants Ibstock Brick has the largest brick production capacity in the United Kingdom. It operates a network of 23 active quarries which are generally located close to its manufacturing plants. Ibstock Brick is currently constructing a new soft mud brick manufacturing plant in Leicestershire that is expected to add approximately 100 million bricks (c.13%) to its brick production capacity per annum. The new plant is expected to commence commissioning in the fourth quarter of 2017.
-- Supreme: A leading manufacturer of concrete fencing products and concrete lintels and general concrete building products, with seven manufacturing plants in the United Kingdom.
-- Forticrete: A leading manufacturer of concrete substitutes for natural stone walling and dressings and niche concrete roof tiles, with seven manufacturing plants in the United Kingdom. Forticrete has a new and innovative concrete roof tile manufacturing line at its Leighton Buzzard facility, which commenced production in the fourth quarter of 2016.
-- US business:
-- Glen-Gery: A leading manufacturer of bricks by volume of despatches in the North East and Mid-West regions of the United States, with a network of ten manufacturing plants, ten distribution centres and 29 active quarries, covered by 20 active quarry permits.
Chief Executive's review
Introduction
The Group performed in line with management's expectations in the six months to 30 June 2017. Group revenue was GBP228 million (1H 2016: GBP210 million) and profit before taxation was GBP39 million in 1H 2017 (1H 2016: GBP38 million). Group adjusted EBITDA(1) was GBP60 million (1H 2016: GBP56 million). We have seen a robust overall performance from our UK operations, with good activity levels from the UK new build housing sector. Glen-Gery, our US business, reported a flat performance year-on-year reflecting a market slowdown since the Spring after a good start to the year.
United Kingdom
The UK businesses, which account for 81% of Group revenue (1H 2016: 82%), reported revenue of GBP186 million in 1H 2017, an 8% increase year-on-year (1H 2016: GBP172 million). Adjusted EBITDA increased to GBP57 million (1H 2016: GBP53 million) - an increase of 7% on the prior year with margins maintained.
UK Clay revenue increased by 8% to GBP136 million (1H 2016: GBP125 million) as sales volumes increased in both the housebuilding and merchant channels. Overall volume growth compared very positively to the prior year, but was held back by some capacity constraints, particularly within soft mud bricks. The results for the comparable half-year period include softer comparatives in the merchant channel resulting from industry-wide destocking, which has subsequently reversed as merchant demand returned to normal levels. Although price increases by channel were in the low single-digit range, overall prices were flat year-on-year due to changes in the channel sales mix resulting from the continued good growth of volumes into the housebuilding sector.
Our new 100 million per annum soft mud brick factory at Ibstock in Leicestershire is scheduled to commence commissioning in 4Q this year and we anticipate approximately 50% capacity utilisation during 2018. This will be weighted to the second half of next year as production volumes are ramped up progressively across the year.
Our new blue brick kiln at Lodge Lane in Cannock, Staffordshire is also scheduled to begin commissioning in the final quarter of 2017. Our investment in this replacement kiln will increase capacity and maintain Ibstock's leading position as a full range supplier. The project is expected to add incremental EBITDA of c.GBP1 million in 2018 during its first full year of operation.
Building on a good start to 2017, our concrete businesses grew revenues by 7% to GBP50 million in the first half (1H 2016: GBP47 million). Our Supreme business has seen increased demand for civils and flooring product, whilst the Forticrete business has benefited from growing sales from the new tile line at Leighton Buzzard. Forticrete's new SL8 tile has been well-received by developers who appreciate the improved aesthetics compared to competing products and additional market supply.
United States
Our US business, which accounts for 19% of Group revenue (1H 2016: 18%), reported revenue of GBP42 million in the six months to 30 June 2017. This compared to GBP38 million in 1H 2016 and was an 11% increase year-on-year. Adjusting for an exchange rate benefit of GBP5 million, revenue declined marginally on a constant currency basis(1) .
Following a strong start to 2017, our US operations saw a mid single-digit volume decline for the first half as a whole. This softening of performance reflects a market slowdown in both multi-family and non-residential projects across the North-East and Mid-West regions of the US which commenced in the Spring.
Adjusted EBITDA for 1H 2017 was GBP5 million (H1 2016: GBP4 million), although this performance benefited from currency gains of GBP0.5 million. In constant currency Adjusted EBITDA declined marginally year-on-year. Glen-Gery's EBITDA margin levels were maintained despite the lower volumes and higher energy costs which have been experienced in 1H 2017.
Strategy
The Group's strategy is unchanged and we continue to develop and invest in our leading building products businesses. In addition to the progress made with our major investment projects, noted above, we continue to evaluate opportunities for value-creating organic or acquisitive investments that would broaden our portfolio.
Current trading and outlook
Our UK clay business has seen good activity levels continue into 2H 2017 and the longer term fundamentals supportive of UK housebuilding remain in place - Government support continues, mortgage availability is good, and there continues to be an undersupply of new homes.
UK concrete is expected to benefit further from our investment in its future growth as volumes from the new roof tile line continue to build, with sales supported by the strength of the new build housing market.
In the US, we anticipate that our performance in the second half of the year will reflect the weaker market conditions evident since the Spring.
Each of our major investment projects is progressing in line with our plans and our two UK brick capacity expansion projects will begin commissioning in 4Q 2017. We continue to forecast earnings benefits from each of our major projects as we add capacity, greater efficiency and flexibility to the Group.
The Group remains strongly cash generative, we are investing for further growth, and our expectations for another year of progress are maintained.
(1 Alternative Performance Measures are described in Note 3 of the financial statements)
Chief Financial Officer's report
Group results
Group revenue in the six month period ended 30 June 2017 increased by 8.7% to GBP228.3 million (1H 2016: GBP210.0 million). Growth was driven primarily by the performance of the UK Clay business, which saw increased trade with housebuilders and builders' merchants in 2017. On a constant currency basis(1) , revenue growth was 6.4%.
Group profit before taxation was GBP38.9 million (1H 2016: GBP37.9 million) - an increase of 2.7%, reflecting the increased turnover, but also some additional one-off finance costs which arose in 1H 2017 when the Group undertook a refinancing. Prior to exceptional costs (see below), profit before taxation was GBP43.3 million, representing growth of 14.4% on the prior year on a constant currency basis.
Alternative performance measures
This interim results statement contains multiple alternative performance measures (APMs). A description of each APM, together with a supporting reconciliation, is included in Note 3 to the condensed financial statements. The metrics are consistent with those presented in our Annual Report & Accounts 2016 and there have been no changes to the bases of calculation.
Adjusted EBITDA
Management measure the Group's operating performance using Adjusted EBITDA(1) , which increased by 7.4% to GBP59.7 million in the six month period ended 30 June 2017. The increase is broadly in line with the Group's revenue growth and reflects a greater proportion of housebuilder sales in the Group sales mix and the higher energy costs experienced in 2017 relative to the prior period.
Cash flow and Net Debt
Cash generated from operations during 1H 2017, excluding the impact of exceptional operating items is shown in the below table:
Table 1 H1 2017 H1 2016 Change
(GBPm) (GBPm) (GBPm)
Adjusted EBITDA(1) 59.7 55.6 +4.1
Share-based
payments 0.7 0.7 -
Capex before
major projects(2) (5.9) (7.4) +1.6
Adjusted change
in working
capital (30.0) (17.9) (12.1)
-------- -------- -----------
Adjusted EBITDA
- maintenance
capex - change
in WC 24.5 31.0 (6.5)
Major project
capex(2) (11.1) (21.3) +10.2
-------- -------- -----------
Cash flow from
operating and
investing activities 13.4 9.7 +3.7
Net interest (2.0) (3.1) +1.1
Tax (7.5) (0.3) (7.2)
Post-employment
benefits (3.5) (2.0) (1.5)
-------- -------- -----------
Adjusted free
cash flow 0.4 4.3 (3.9)
======== ======== ===========
Cash conversion(1) 41.1% 55.8% (14.7%pts)
1 - Alternative Performance Measures are descried in Note 3 to the financial statements.
2 - Capex on major projects is that capex relating to strategic projects in Leicester, Leighton Buzzard and Cannock.
Cash generation in 1H 2017 was impacted by reduced cash collections at the end of the period resulting from IT system issues at a major customer which delayed the receipt of c.GBP6.4 million of payments across the Ibstock Group until early-July. Adjusting for this delayed receipt would have resulted in cash conversion of c.52% which, together with the anticipated impact of increased sales year-on-year, gives management confidence that our cash generation is in line with expectations and the operations remain strongly cash generative.
A net working capital balance at 30 June 2017 of GBP77.0 million compares to GBP46.1 million at 31 December 2016, which is consistent with the Group's normal seasonal trading cycle.
Net debt(1) (borrowings less cash) of GBP159.9 million at 30 June 2017, compares to GBP132.8 million at the prior year end and GBP161.2 million at the prior half year date. In March 2017, the Group refinanced its debt arrangements and entered into a GBP250 million revolving credit facility (RCF) with a group of six major banks. The five-year facility contains interest cover and leverage covenant limits of 4x and 3x, respectively. These covenant requirements are consistent with our prior debt facility and the Group remains significantly within both limits.
Exchange rates
The Group is exposed to movements in exchange rates when translating the results of its US operations from US Dollars to UK Sterling. Although Sterling appreciated against the Dollar in the six months to 30 June 2017, the average exchange rate of $1.2595:GBP1 was below that of the equivalent period in 2016 ($1.4178:GBP1) and has resulted in a GBP0.5 million benefit to Adjusted EBTIDA in 2017.
Exceptional items
In line with our accounting policy for exceptional items, we have excluded certain items from our Adjusted EBITDA to aid shareholders' understanding of our underlying financial performance.
Infrequent events, such as the non-cash interest expenses arising from the accelerated write-off of debt fees during our refinancing in March 2017 (GBP6.4 million) and the income statement credit of GBP2.1 million arising on the release of our provision for contingent consideration following Bain Capital's disposal of interests in the Group's shares, have been treated as exceptional in the current period. Further details of exceptional items are set out in Note 5 of the financial statements.
Finance costs
Net finance costs of GBP9.7 million were incurred in 1H 2017 (1H 2016: GBP4.7 million). As noted above, the single largest element of this total was exceptional finance costs of GBP6.4 million. The non-cash interest charges, which were treated as exceptional, arose in the period to 30 June 2017 in respect of accelerated debt issue fees (GBP3.3 million) and accounting adjustments caused by the prior year interest rate change (GBP3.1 million) - the latter reversing a gain from the prior year.
Taxation
The Group has recognised a tax charge of GBP8.2 million (1H 2016: GBP8.0 million) on the Group's pre-tax profits of GBP38.9 million (1H 2016: GBP37.9 million) resulting in an effective tax rate of 21.0% (1H 2016: 21.1%), compared to the standard rate of UK corporation tax of 19.25%. The cash taxation costs in H1 2016 were impacted by the significant exceptional costs incurred during 2015 (IPO expenses, acquisition and debt early settlement costs).
Earnings per share
Statutory basic EPS increased by 2.8% to 7.6 pence in 1H 2017 (1H 2016: 7.4 pence) as a result of the Group's increased profitability in the period as discussed above.
Adjusted EPS(1) of 9.5 pence increased by 16% - this metric removes the impact of exceptional non-trading items. Additionally, the fair value uplifts resulting from our acquisition accounting have been removed from the adjusted EPS calculations, together with non-cash interest impacts (net of the related taxation charge/credit). Adjusted EPS is the Group's measure for calculating distributions to shareholders and has been included to provide a clearer guide as to the underlying earnings performance of the Group. A full reconciliation of our Adjusted EPS measure is included in Note 7.
Table 2 1H 2017 1H 2016 -------------------- -------- -------- Statutory Basic EPS 7.6p 7.4p -------------------- -------- -------- Adjusted Statutory Basic EPS 9.5p 8.2p -------------------- -------- --------
Dividend
The Board has approved an interim dividend of 2.6 pence per ordinary share (2016: 2.4 pence) for payment on 22 September 2017 to shareholders on the register at the close of business on 18 August 2017. The Board believes that a policy of paying one-third of the prior full year dividend as an interim in the following half-year period would provide greater certainty to shareholders and plans to adopt this payment approach in future.
Pensions
During 2016, the Group conducted a consultation with the UK defined benefit scheme members, regarding a proposal to close the scheme to future accrual for all active members. All members consented to this change and, from 1 February 2017, have joined the UK defined contribution scheme.
This decision resulted in costs associated with the closure of GBP1.6 million, which were classified as exceptional in our 2016 full year results. Upon closure, a non-cash curtailment gain of GBP30.3 million was also recognised and treated as exceptional.
At 30 June 2017, the defined benefit scheme was in an actuarial accounting surplus position of GBP43.6 million (31 December 2016: deficit of GBP28.7 million following minimum funding requirement liability recognition of GBP14.2 million). At the period end, the scheme had asset levels of GBP692.5 million (31 December 2016: GBP683.6 million) against pension liabilities of GBP648.9 million (31 December 2016: GBP698.0 million). The improvement in the Group's net pension position principally resulted from a combination of strong investment returns, together with actual inflation being lower than assumed, and actuarial gains due to changes in assumptions - the latter being driven by changes in gilt rates.
In the current period, in continuing to apply IFRIC 14, management has ceased to recognise an additional liability in respect of the minimum funding obligation following the receipt of legal advice regarding the Group's ability to access a surplus (should one exist) in the pension scheme in the future. See Note 2 for further details of the Group's interpretation of IFRIC 14, the relevant accounting standard.
Within our US segment, certain employees are members of two multi-employer post-employment schemes. At 30 June 2017, a liability of GBP9.2 million (31 December 2016: GBP9.4 million) has been recognised in relation to these schemes.
Related party transactions
Related party transactions are disclosed in Note 14 to the condensed financial statements. During the period, Bain Capital Partners LLC ceased to hold any ordinary shares in Ibstock plc and no longer has significant influence over the Group. There have been no other material changes to related parties from those disclosed in the Annual Report and Accounts 2016.
Subsequent events
An interim dividend of 2.6 pence per ordinary share (2016: 2.4 pence) amounting to a total of GBP10,566,000 was declared by the Board on 9 August 2017.
There have been no further events subsequent to 30 June 2017, which management believe require adjustment or disclosure.
Going concern
The Group continues to meet its day to day working capital and other funding requirements through a combination of strong operational cash flows generated by the business and the long-term funding in place. As noted above, the Group agreed new banking facilities during the period, with a five year GBP250 million RCF replacing the five-year GBP200 million loan and GBP40 million committed RCF facility in place at 31 December 2016.
Risks and Uncertainties
The Board continually assesses and monitors the key risks impacting the business. The Group's activities expose it to a variety of risks; economic conditions, government action and policy, government regulation and standards relating to the manufacture and use of building products, customer relationships and reputation, business disruption, recruitment and retention of key personnel, input prices, product quality, financial risk management and pension obligations.
The Group's risk management approach together with these principal risks and mitigating actions are unchanged from those set out on pages 34 to 37 of the 2016 Annual Report & Accounts.
(1 Alternative Performance Measures are described in Note 3 of the financial statements)
Statement of directors' responsibilities in relation to the half-yearly financial report
We confirm that to the best of our knowledge:
-- The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial reporting as adopted by the European Union;
-- The interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
Wayne Sheppard Kevin Sims
Chief Executive Officer Chief Financial
Officer
9 August 2017 9 August 2017
Condensed consolidated income statement
Unaudited Unaudited
H1 2017 H1 2016
Notes GBP'000 GBP'000
Revenue 228,260 210,037
Cost of sales before exceptional items (140,100) (126,472)
----------------------------------------------------------- ----- --------- ---------
Gross profit before exceptional items 88,160 83,565
Exceptional cost of sales 5 - (353)
----------------------------------------------------------- ----- --------- ---------
Gross profit 88,160 83,212
----------------------------------------------------------- ----- --------- ---------
Distribution costs (19,290) (18,297)
----------------------------------------------------------- ----- --------- ---------
Administrative expenses before exceptional items (23,202) (23,827)
Exceptional administrative items 5 1,968 -
----------------------------------------------------------- ----- --------- ---------
Administrative expenses (21,234) (23,827)
----------------------------------------------------------- ----- --------- ---------
Profit/(loss) on disposal of property, plant and equipment 5 - 61
Other income 1,320 1,833
Other expenses (318) (398)
--------- ---------
Operating profit 48,638 42,584
Finance costs before exceptional items (3,356) (5,571)
Exceptional finance costs 5 (6,386) -
----------------------------------------------------------- ----- --------- ---------
Finance costs (9,742) (5,571)
----------------------------------------------------------- ----- --------- ---------
Finance income before exceptional items - 325
Exceptional finance income 5 - 522
----------------------------------------------------------- ----- --------- ---------
Finance income - 847
----------------------------------------------------------- ----- --------- ---------
Net finance cost (9,742) (4,724)
Profit before taxation 38,896 37,860
Taxation (8,156) (7,989)
--------- ---------
Profit for the financial period 30,740 29,871
========= =========
Profit attributable to:
Owners of the parent 30,740 29,871
========= =========
Notes Pence Pence
Earnings per share
Basic 7 7.6 7.4
Diluted 7 7.5 7.4
All amounts relate to continuing operations.
Condensed consolidated statement of comprehensive income
Unaudited Unaudited
H1 2017 H1 2016
Notes GBP'000 GBP'000
Profit for the financial period 30,740 29,871
--------- ---------
Other comprehensive income/(expense):
Items that will not be reclassified to the profit or loss
Re-measurement of post-employment benefit assets and obligations 54,742 (39,265)
Re-measurement of post-employment benefits - removal of surplus restriction 14,223 8,192
Related tax movements (12,860) 6,199
--------- ---------
56,105 (24,874)
Items that may be subsequently reclassified to profit or loss
Currency translation differences (4,527) 8,162
Other comprehensive income for the period net of tax 51,578 (16,712)
--------- ---------
Total comprehensive income for the period, net of tax 82,318 13,159
========= =========
Profit attributable to:
Owners of the parent 82,318 13,159
========= =========
Non-GAAP measure
Reconciliation of Adjusted EBITDA to Operating profit for the financial period:
Unaudited Unaudited
H1 2017 H1 2016
Notes GBP000 GBP000
Adjusted EBITDA 59,690 55,603
Add back exceptional items 5 1,968 (292)
Less depreciation and amortisation (13,020) (12,727)
--------- ---------
Operating profit 48,638 42,584
========= =========
Condensed consolidated balance sheet
Unaudited
30 June 2017 Audited 31 December 2016
Notes GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 119,586 123,286
Property, plant and equipment 393,061 392,303
Post-employment benefit asset 12 43,637 -
------------- ------------------------
556,284 515,589
------------- ------------------------
Current assets
Inventories 90,495 88,757
Trade and other receivables 77,111 52,148
Deferred tax 1,353 1,560
Cash and cash equivalents 18,515 45,829
------------- ------------------------
187,474 188,294
Assets held for sale 2,353 1,203
------------- ------------------------
Total assets 746,111 705,086
Current liabilities
Trade and other payables (77,727) (80,220)
Borrowings 10 (578) (13,044)
Current tax payable (5,950) (7,098)
Provisions (590) (462)
------------- ------------------------
(84,845) (100,824)
------------- ------------------------
Net current assets 104,982 88,673
------------- ------------------------
Total assets less current liabilities 661,266 604,262
------------- ------------------------
Non-current liabilities
Borrowings 10 (177,857) (165,556)
Post-employment benefit obligations 12 (9,196) (38,074)
Deferred tax liabilities (70,859) (57,005)
Provisions (12,304) (14,170)
------------- ------------------------
(270,216) (274,805)
------------- ------------------------
Net assets 391,050 329,457
============= ========================
Equity
Share capital 4,064 4,063
Retained earnings 744,589 677,361
Merger reserve (369,119) (369,119)
Other reserves - 1,109
Currency translation reserve 11,516 16,043
------------- ------------------------
Total equity 391,050 329,457
============= ========================
Condensed consolidated statement of changes in equity (unaudited) for six months ended 30 June 2017
Currency Total equity
Retained translation attributable to
Share capital earnings Merger reserve Other reserves reserve owners
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2017 4,063 677,361 (369,119) 1,109 16,043 329,457
------------- ---------------- -------------- -------------- ---------------- ----------------
Profit for the
period - 30,740 - - - 30,740
Other
comprehensive
income - 56,105 - - (4,527) 51,578
------------- ---------------- -------------- -------------- ---------------- ----------------
Total
comprehensive
income for the
period - 86,845 - - (4,527) 82,318
Transactions with
owners:
Release of
contingent
consideration
provision - 1,109 - (1,109) - -
Share based
payments - 733 - - - 733
Deferred tax on
share based
payment - 74 - - - 74
Equity dividend
paid - (21,532) - - - (21,532)
Issue of share
capital 1 (1) -
------------- ---------------- -------------- -------------- ---------------- ----------------
Balance at 30
June 2017 4,064 744,589 (369,119) - 11,516 391,050
============= ================ ============== ============== ================ ================
Condensed consolidated statement of changes in equity (unaudited) for six months ended 30 June 2016
Currency Total equity
Retained translation attributable to
Share capital earnings Merger reserve Other reserves reserve owners
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2016 4,055 671,759 (369,119) 1,109 1,097 308,901
------------- ---------------- -------------- -------------- ---------------- ----------------
Profit for the
period - 29,871 - - - 29,871
Other
comprehensive
income - (24,874) - - 8,162 (16,712)
------------- ---------------- -------------- -------------- ---------------- ----------------
Total
comprehensive
income for the
period - 4,997 - - 8,162 13,159
Transactions with
owners:
Issue of share
capital 6 (6) - - - -
Share based
payments - 704 - - - 704
Deferred tax on
share based
payment - 14 - - - 14
Equity dividend
paid - (17,869) - - - (17,869)
------------- ---------------- -------------- -------------- ---------------- ----------------
Balance at 30
June 2016 4,061 659,599 (369,119) 1,109 9,259 304,909
============= ================ ============== ============== ================ ================
Condensed consolidated cash flow statement
Unaudited Unaudited
H1 2017 H1 2016
Note GBP000 GBP'000
Cash flow from operating activities
Cash generated from operations 9 28,663 35,996
Interest paid (1,975) (3,072)
Tax paid (7,490) (263)
--------- ---------
Net cash inflow from operating activities 19,198 32,661
Cash flows from investing activities
Purchase of property, plant and equipment (16,950) (32,446)
Proceeds from sale of property plant and equipment - 64
Interest received 2 5
--------- ---------
Net cash (outflow) from investing activities (16,948) (32,377)
Cash flows from financing activities
Dividends paid (21,532) (17,869)
Drawdown of borrowings 180,000 -
Repayment of borrowings (185,000) (7,500)
Debt issue costs (2,408) -
--------- ---------
Net cash outflow from financing activities (28,940) (25,369)
Net decrease in cash and cash equivalents (26,690) (25,085)
Cash and cash equivalents at beginning of the period 45,829 51,024
Exchange (losses)/
gains on cash and cash equivalents (624) 1,014
--------- ---------
Cash and cash equivalents at end of period 18,515 26,953
========= =========
1. Authorisation of financial statements
Ibstock plc ('Ibstock' or the 'Group') is a manufacturer of clay bricks and concrete products with operations in the United Kingdom and the United States. Ibstock plc is a public company limited by shares, which is incorporated and domiciled in England whose shares are publicly traded. The registered office is Leicester Road, Ibstock, Leicestershire, LE67 6HS and the company registration number is 09760850.
The interim condensed consolidated financial statements of Ibstock plc for the six months ended 30 June 2017 were authorised for issue in accordance with a resolution of the Directors on 9 August 2017.
Publication of non-statutory accounts
The financial information contained in the interim statement does not constitute the Group's statutory accounts as defined in section 435 of the Companies Act 2006. The comparative figures for the financial period ended 31 December 2016, which have been extracted from the statutory accounts for that period, are not the company's statutory accounts for that financial period. Statutory accounts for the year ended 31 December 2016 were approved by the Board of Directors on 7 March 2017. Those accounts have been reported on by the company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
2. Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2017 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, as adopted by the European Union ('EU').
They do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's Annual report and account as at 31 December 2016 which have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the EU.
All accounting policies applied by the Group, and the critical accounting estimates and judgements within the interim condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 December 2016, except for the adoption of new standards and interpretations as of 1 January 2017, which did not have any impact on the accounting policies, financial position or performance of the Group. In applying IFRIC 14 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' in the six months ended 30 June 2017 the Group has ceased to recognise an additional liability in respect of the minimum funding obligation following the receipt of legal advice regarding the Group's ability to access a surplus in the pension scheme in the future. This change has resulted in a credit to the Statement of Other Comprehensive Income of GBP14,223,000 in the current period. Prior period amounts have not been restated on the grounds of materiality and the effect in future periods is not disclosed because estimating it is impracticable.
IFRS 16 - In January 2016 the IASB issued IFRS 16 on accounting for leases which is yet to be endorsed by the European Union. This standard will have a material effect on the Group because of the operating leases it has entered into. The Group is in the process of determining the effect of the standard.
Going concern
The Group has maintained its positive cash position in the period. In order to ensure that the Group can maintain its strong liquidity, it has a GBP250 million committed revolving credit facility. The Group's forecast and projections, which allow for reasonably possible variations show that the Group will continue to maintain its strong liquidity position, and therefore the Directors' view that the Group has sufficient funds available to meet its foreseeable requirements. Additionally, the Group has significant headroom on each of its covenant requirements. The Directors have concluded therefore that the going concern basis remains appropriate.
3. Alternative Performance Measures
Alternative Performance Measures (APMs) are disclosed within the financial statements where management believes it is necessary to do so to provide further understanding of the financial performance of the Group. Management uses APMs in its own assessment of the Group's performance. It is not intended that APMs are a substitute for, or superior to, statutory measurements. None of the APMs are outlined within IFRS and they may not be comparable with similarly titled APMs used by other companies.
Exceptional items
The Group presents items as exceptional on the face of the income statement, those items of income and expense which, because of the material, nature and/or expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better elements of financial performance in the period, so as to facilitate comparison with future periods and to assess trends in financial performance. Details of all exceptional items are disclosed in Note 5.
Profit before tax pre-exceptional
Profit before tax pre-exceptional presents the profit before taxation excluding exceptional items (as described, above, and set out in Note 5). Movement in this measure is quoted in constant currency terms (as defined, below).
Adjusted EBITDA
Adjusted EBITDA is the earnings before interest, taxation, depreciation and amortisation adjusted for exceptional items. A full reconciliation is included at the foot of the Group's condensed consolidated statement of comprehensive income within the financial statements.
Adjusted EPS
Adjusted EPS is the basic earnings per share adjusted for exceptional items, amortisation and depreciation on fair value uplifted assets and non-cash interest net of tax (at the Group's effective tax rate). A full reconciliation is provided in Note 7.
Net debt
Net debt is defined as the sum of cash and total borrowings at the balance sheet date. Net debt to EBITDA is the ratio of net debt to Adjusted EBITDA (as defined above). A full reconciliation is provided in Note 10.
Return on capital employed
Return on capital employed is defined as the last twelve months' adjusted EBITDA (as defined above) adding back amortisation and depreciation prior to fair value uplift, as a proportion of capital employed (defined as net debt plus equity excluding pension deficit). Last 12 month figures are derived from the sum of the current half year and prior full year, less the prior half year figures.
A calculation of return on capital employed is set out below:
1H + FY - H1 = Last
2017 2017 2016 12 months
Adjusted EBITDA 59,690 + 111,633 - 55,603 = 115,720
Less Depreciation (9,760) + (19,356) - (9,424) = (19,692)
Add back Fair
value uplift depreciation 1,518 + 2,899 - 1,200 = 3,217
-----------
99,245
(A)
Net debt (Note
10) 159,920
Equity (Balance
Sheet) 391,050
Pension (Note
12) (34,441)
-----------
516,529
(B)
ROCE (A/B) 19.2%
========
Cash conversion
Cash conversion is the ratio of Adjusted EBITDA after movements in working capital less maintenance capital expenditure and share based payments, to Adjusted EBITDA. The calculation of the cash conversion ratio is set out within Table 1 of the Chief Financial Officers' report.
Constant currency
Constant currency measures are used in management's description of performance within the Chief Executive Officer's review and Chief Financial Officer's report. Where used, constant currency figures translate all amounts for our US segment using the US dollar exchange rate for the six month period ended 30 June 2016 (GBP1:$1.4178).
4. SEGMENT REPORTING
The management team considers the reportable segments to be the UK and the US. The key Group performance measure is adjusted EBITDA, as detailed below, which is profit before net finance cost, tax, depreciation and amortisation and exceptional items. Transactions between segments are carried out at arm's length. The below tables present revenue and adjusted EBITDA for the Group's operating segments for the six months ended 30 June 2017 and 2016, respectively.
Six months ended 30 June 2017 (unaudited)
UK US Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Clay revenue 135,902 42,380 - 178,282
Concrete revenue 49,978 - - 49,978
-------- -------- ------------ --------
Total revenue from external
customers 185,880 42,380 - 228,260
Adjusted EBITDA 56,821 4,867 (1,998) 59,690
Exceptional administrative
items 1,968 - - 1,968
Depreciation and amortisation
pre fair value uplift (6,106) (2,136) - (8,242)
Incremental depreciation
and amortisation following
fair value uplift (4,313) (465) - (4,778)
Net finance costs (9,288) (454) - (9,742)
-------- -------- ------------ --------
Profit/(loss) before tax 39,082 1,812 (1,998) 38,896
Six months ended 30 June 2016 (unaudited)
UK US Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000
Clay revenue 125,374 38,028 - 163,402
Concrete revenue 46,635 - - 46,635
-------- -------- ------------ --------
Total revenue from external
customers 172,009 38,028 - 210,037
Adjusted EBITDA 53,058 4,427 (1,882) 55,603
Exceptional administrative
items (350) 58 - (292)
Depreciation and amortisation
pre fair value uplift (6,308) (1,916) - (8,224)
Incremental depreciation
and amortisation following
fair value uplift (4,390) (113) - (4,503)
Net finance costs (2,849) (1,875) - (4,724)
-------- -------- ------------ --------
Profit/(loss) before tax 39,161 581 (1,882) 37,860
The unallocated segment balance include the fair value of share based payments and associated taxes of (GBP0.9 million), plc Board costs (GBP0.7 million), legal expenses associated with the listed business (GBP0.3 million).
Seasonality
The Group's trading operations when assessed on a half yearly basis are mainly unaffected by seasonal factors. In the year ended 2016, the period to 30 June accounted for 48.3% of the Group's annual revenue and 49.8% of the Group's annual adjusted EBITDA.
5. EXCEPTIONAL ITEMS
Unaudited Unaudited
H1 2017 H1 2016
GBP'000 GBP'000
Exceptional costs of sales - (353)
Exceptional administrative items:
Pension closure costs (111) -
Release of provision for contingent
consideration 2,079 -
---------- ----------
Total exceptional administrative
items 1,968 -
Profit on disposal of property, plant
and equipment - 61
---------- ----------
1,968 (292)
Exceptional finance income - 522
Exceptional finance costs (6,386) -
Total exceptional items (4,418) 230
========== ==========
Period ended 30 June 2017
Included within the current period are the following exceptional items:
Exceptional administration expenses
Pension closure costs which arose in the period ended 30 June 2017 represent residual professional advisor fees associated with the closure of the Group's UK defined benefit pension scheme, which took place in the year ending 31 December 2016.
The release of a provision for contingent consideration of GBP2,079,000 arose in the period following the disposal of all interests in the Group by Bain Capital LLC (see Note 14).
Exceptional finance costs
Exceptional finance costs arising in the current period resulted from the refinancing of the Group's loan in March 2017, representing GBP3.3 million of accelerated loan deal fees and GBP3.1 million of interest charges as a result of the effective interest method of accounting. Further detail of the Group's refinancing is provided in Note 10.
Period ended 30 June 2016
Included within the prior period are the following exceptional items:
Exceptional costs of sales
Exceptional costs of sales in the prior period of GBP353,000 represent redundancy costs associated with restructuring the Group's operations in Ravenhead. Similar activities resulting in these costs are only expected to arise infrequently.
Exceptional finance income
Exceptional finance income in the prior period resulted from gains made on foreign currency contracts around the date of the UK's EU Referendum. Similar gains are not expected to recur.
Tax on exceptional items
The release of contingent consideration of GBP2,079,000 is non-taxable whilst the pension closure costs of GBP111,000 and exceptional finance costs of GBP6,386,000 are tax deductible in the current period.
In the period ended 30 June 2016, the redundancy costs of GBP353,000 are tax deductible and finance income of GBP522,000 is taxable whilst the GBP61,000 accounting profit on disposal of property, plant and equipment is non-taxable.
6. TAXATION
The taxation expense for the interim period is an estimate based on the expected full year effective tax rate on full year profits.
7. EARNINGS PER SHARE
The basic earnings per share figures are calculated by dividing profit for the period attributable to the parent shareholders by the weighted average number of ordinary shares in issue during the period.
The diluted earnings per share figures allow for the dilutive effect of the conversion into ordinary shares of the weighted average number of options outstanding during the period. Where the average share price for the period is lower than the option price the options become anti-dilutive and are excluded from the calculation.
The number of shares used for the
earnings per share calculation are
as follows:
Unaudited Unaudited
H1 2017 H1 2016
(000s) (000s)
Basic weighted average number of
shares 406,321 405,909
Effect of share incentive awards
and options 1,848 367
---------- ----------
Diluted weighted average number
of shares 408,169 406,276
The calculation of adjusted earnings per share is key measurement of management that is not defined by IFRS. The adjusted EPS measures should not be viewed in isolation, but rather treated as supplementary information.
Adjusted earnings per share figures are calculated as the basic earnings per share adjusted for exceptional items, amortisation and depreciation on fair value uplifted assets and non-cash interest expenses. All adjustments are made net of the associated taxation impact at the Group's Effective Tax Rate. Management revised its method of calculation of Adjusted EPS in the year ending 31 December 2016 subsequent to the reporting of the interim results in order to incorporate non-cash interest and the related taxation charge/credit. Additionally, the calculation reflects the Group's effective tax rate in assessing the impact of adjusting items, which differs from the calculation in the prior interim period. The Adjusted EPS calculation for the six month period ended 30 June 2016 has not been restated on the grounds of materiality.
A reconciliation of the statutory profit to that used in the adjusted earnings per share calculations is as follows:
Unaudited Unaudited
H1 2017 H1 2016
Notes GBP000 GBP000
Profit for the period attributable
to the parent shareholders 30,740 29,871
Add back exceptional items 5 4,418 (230)
Add back tax (credit)/expense
on exceptional items (926) 34
Add fair value adjustments 4,778 4,503
Less tax credit on fair value
adjustments (1,002) (921)
Add back non-cash interest 734 -
Less back tax credit on non-cash (154) -
interest
---------- ----------
Adjusted profit for the period
attributable to the parent
shareholders 38,588 33,257
========== ==========
Unaudited Unaudited
H1 2017 H1 2016
Pence pence
Basic EPS on profit for the period 7.6 7.4
Diluted EPS on profit for the period 7.5 7.4
Adjusted basic EPS on profit for
the period 9.5 8.2
8. PROPERTY, PLANT AND EQUIPMENT AND RELATED COMMITMENTS
During the six months ended 30 June 2017, the Group acquired assets with a cost of GBP16,950,000 (the six months ended 30 June 2016: GBP32,446,000). Capital expenditure commitments for which no provision has been made are set out in the table below:
30 June 2017 31 December 2016
(GBP'000) (GBP'000)
Property, plant and equipment 19,450 26,799
9. NOTES TO THE GROUP CASH FLOW STATEMENT
Unaudited Unaudited
H1 2017 H1 2016
Cash flows from operating
activities GBP'000 GBP'000
Profit before taxation 38,896 37,860
Adjustments for:
Depreciation of property,
plant and equipment 9,760 9,424
Amortisation of intangible
assets 3,260 3,303
Exceptional finance income - (522)
Finance costs 9,742 5,246
Gain on disposal of property,
plant and equipment - (61)
Share based payment 733 704
Deferred income (159) 2
Post-employment benefits (3,531) (2,048)
---------- ----------
58,701 53,908
Increase in inventory (2,890) (7,844)
Increase in debtors (26,215) (17,327)
Increase in creditors 722 7,898
Decrease in provisions (1,655) (639)
---------- ----------
Cash generated from operations 28,663 35,996
========== ==========
10. MOVEMENTS IN CASH AND NET DEBT
The Group refinanced it debt facilities in March 2017, agreeing a five-year GBP250 million Revolving Credit Facility (RCF). The RCF attracts interest at LIBOR plus a margin ranging from 100-225bps depending upon the ratio of net debt to adjusted EBITDA (see Note 3 for definitions) and initially set at 125bps.
The new facility contains debt covenant requirements of leverage (net debt to adjusted EBITDA) and interest cover (adjusted EBITDA to net finance charge) of 3x and 4x, respectively, to be tested semi-annually on 30 June and 31 December.
30 June 31 December
2017 2016
GBP'000 GBP'000
Cash and cash equivalents 18,515 45,829
Current
Revolving credit facility (578) -
Bank borrowings - (13,044)
Non-current
Revolving credit facility (177,857) -
Bank borrowings - (165,556)
---------- ------------
(177,857) (165,556)
---------- ------------
Total borrowings (178,435) (178,600)
Net debt (159,920) (132,771)
========== ============
11. FINANCIAL INSTRUMENTS
IFRS 13 requires that the classification of financial instruments measured at fair value be determined by references to the source of inputs used to derive the fair value. The classification uses the following three-level hierarchy:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2 - Other techniques for which all inputs, which have a significant effect on the recorded fair value, are observable, either directly or indirectly.
Level 3 - Techniques which use inputs, which have a significant effect on the recorded fair value, that are not based on observable market data.
Associated with the business combination which took place in February 2015, half of any tax relief, over a contracted amount, received by the acquired business as a result of the one-off pension payment, shall be payable to the seller. At 31 December 2016, management estimated the fair value of the future obligation of contingent consideration at GBP4,000,000, with a range being nil to GBP4,000,000.
In the six month period ended 30 June 2016, management has released GBP2,079,000 in relation to this contingent consideration following the disposal of remaining shares in Ibstock plc by the Bain Capital Partners LLC, as disclosed in Note 14. This amount has been disclosed as an exceptional item (see Note 5).
There were no transfers between levels during any period disclosed.
At 30 June 2017 and 31 December 2016, the Group held no significant derivative financial instruments.
The carrying value of the Group's short-term receivables and payables is a reasonable approximation of their fair values. The fair value of all other financial instruments carried within the Group's financial statements is not materially different from their carrying amount.
12. POST EMPLOYMENT BENEFITS
The Group participates in the Ibstock Pension Scheme (the 'Scheme'), a defined benefit pension scheme in the UK. During the six month period to 30 June 2017, the Scheme has moved from a deficit of GBP28,685,000 to a surplus of GBP43,637,000. Analysis of movements during the six month period ended 30 June 2017:
GBP'000
UK Scheme deficit at 31 December 2016 (28,685)
Charge within labour costs and operating
profit (962)
Interest income (174)
Remeasurement due to:
Change in financial assumptions (12,562)
Change in demographic assumptions 14,194
Experience gains 23,652
Return on plan assets 29,458
Pension scheme surplus restriction
recognised in the statement of comprehensive
income 14,223
Contributions 4,493
---------
UK Scheme surplus at 30 June 2017 43,637
US scheme obligation at 30 June 2017 (9,196)
---------
34,441
=========
The improvement in the underlying balance sheet position over the period is primarily due to a combination of actuarial gains due to a change in assumptions, actual inflation being lower than assumed and strong investment returns. A change in the restrictions applied under IFRIC14 as described in Note 2 has further improved the balance sheet position.
The financial assumptions used by the actuary have been derived using a methodology consistent with the approach used to prepare the accounting disclosures at 31 December 2016. The assumptions have been updated based on market conditions at 30 June 2017:
30 June 31 December
Assumption 2017 2016
Discount
rate 2.65% 2.80%
RPI inflation 3.30% 3.35%
CPI inflation 2.30% 2.35%
The Group also participates in two multi-employer defined benefit pension schemes in the US. The liability recognised in respect of these schemes at 30 June 2017 of GBP9,196,000 (31 December 2016: GBP9,389,000), which other than adjustment for exchange rate and discount rate movements in the period, remains largely unchanged since the prior period end.
13. SHARE BASED PAYMENTS
In March 2017, 731,007 and 484,570 share options were granted to senior executives under the LTIP and Company's Share Option Plan (CSOP), respectively. The exercise price of the CSOP is 211.8 pence being equal to the market price of shares on the date of grant. The LTIP, which has a nil exercise price, contains Total Shareholder Return (TSR) and EPS performance conditions. There are no performance conditions associated with the CSOP. Both plans contain a three year service period. The fair value at the grant date is estimated using a binomial pricing model, taking into account the terms and condition upon which the options were granted.
In addition, 83,017 shares were awarded under the Annual Deferred Bonus Plan (ADBP) in relation to the bonus achieved in the year ending 31 December 2016. There are no performance conditions associated with the ADBP, which contains a three year service period.
The fair value of options granted during the six months ended 30 June 2017 was estimated on the date of grant using the following assumptions:
LTIP CSOP ADBP
Dividend yield (%) N/A 4.13 N/A
Expected volatility (%) 31.36 32.9 N/A
Risk-free interest rate
(%) 0.18 0.69 N/A
Expected life of the share
options (years) 3.0 6.5 3.0
Weighted average fair
value at grant(GBP) 1.67 0.46 2.10
For the six months ended 30 June 2017, the Group has recognised GBP733,000 of share-based payments expense in the condensed consolidated income statement (30 June 2016: GBP704,000).
14. RELATED PARTY TRANSACTIONS
In the six month period ended 30 June 2017
On 9 March 2017, Diamond (BC) S.a.r.l (a wholly owned subsidiary of Bain Capital Partners LLC) announced the proposed placing of approximately 40,600,000 ordinary shares in the capital of Ibstock plc. On 10 March 2017, the Company announced that 48,600,000 ordinary shares were sold due to strong investor demand. Following the sale, Bain Capital Partners LLC held ordinary shares representing approximately 25.0% of the entire issued share capital. On 25 April 2017, Diamond (BC) S.a.r.l announced the proposed placing of approximately 50,000,000 ordinary shares in the capital of Ibstock plc. On 26 April 2017, the Company announced that 101,600,000 ordinary shares were sold due to strong investor demand. Following the sale, Bain Capital Partners LLC ceased to hold any ordinary shares in Ibstock plc. As at 30 June 2017, the board of directors of the company, consider, based on the facts and circumstances, that Bain Capital Partners LLC no longer continues to have significant influence over the Group.
In the six month period ended 30 June 2016
At 30 June 2016, Diamond (BC) S.a.r.l held 46.96% of the issued share capital of Ibstock plc. At that date, the board of directors of the Company consider, based on the facts and circumstances, that Diamond (BC) S.a.r.l. had significant influence over, but did not control, the Group.
Key management personnel and their connected persons received equity dividends totalling GBP1,245,000 in the period to 30 June 2016 and were granted options over 596,209 shares under the Ibstock plc Long Term Incentive Plan (LTIP).
Further details of related party transactions arising in the year ended 31 December 2016 are set out in Note 31 of the 2016 Annual Report & Accounts.
There are no balances with Bain Capital Partners LLC at the current or prior period end date.
15. DIVIDS PAID AND PROPOSED
A final dividend for 2016 of 5.3 pence per ordinary share (2015: 4.4 pence) was paid on 9 June 2017. The Directors have declared an interim dividend of 2.6 pence per ordinary share in respect of 2017 (2016: 2.4 pence), amounting to a dividend of GBP10,566,000 (2016: GBP9,746,000 million). The interim dividend will be paid on Friday 22 September 2017 to all shareholders on the register at close of business on Friday 18 August 2017. These condensed consolidated financial statements do not reflect this interim dividend payable.
16. POST BALANCE SHEET EVENTS
Other than the interim dividend of 2.6 pence per ordinary share declared by the Directors (see Note 15), since the balance sheet date no further subsequent events requiring further disclosure or adjustments to these financial statements have been identified.
INDEPENT REVIEW REPORT TO IBSTOCK PLC
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes 1 to 16. 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 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. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent 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 conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs 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 International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements 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 inquiries, 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 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 condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
9 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
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