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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Safestyle Uk Plc | LSE:SFE | London | Ordinary Share | JE00BGP63272 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.32 | 0.00 | 00:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Manufacturing Industries,nec | 154.32M | -6.51M | -0.0469 | -0.07 | 444.37k |
TIDMSFE
RNS Number : 3932R
Safestyle UK PLC
21 September 2017
21 September 2017
Safestyle UK plc
("Safestyle" or the "Group"))
Unaudited interim results for the six months ended 30 June 2017
Safestyle UK plc (AIM: SFE), the leading UK-focused retailer and manufacturer of PVCu replacement windows and doors for the homeowner market, today announces its interim results for the six months ended 30 June 2017.
Financial and Operational highlights
Unaudited Unaudited % change 6 months ended Restated 30 June 2017 6 months ended GBPm 30 June 2016 GBPm -------------------- ---------------- ---------------- ---------- Revenue 82.5 81.4 +1.4% -------------------- ---------------- ---------------- ---------- Gross profit 27.5 28.2 -2.5% -------------------- ---------------- ---------------- ---------- Gross margin % 33.3% 34.6% -130bps -------------------- ---------------- ---------------- ---------- EBITDA 9.6 10.1 -5.0% -------------------- ---------------- ---------------- ---------- Underlying EBITDA* 9.8 11.1 -11.7% -------------------- ---------------- ---------------- ---------- PBT 8.8 9.5 -7.4% -------------------- ---------------- ---------------- ---------- Underlying PBT** 9.0 10.6 -15.1% -------------------- ---------------- ---------------- ---------- EPS - Basic 8.3p 9.4p -11.7% -------------------- ---------------- ---------------- ---------- Interim Dividend 3.75p 3.75p -------------------- ---------------- ---------------- ----------
* Underlying EBITDA is defined as earnings before interest, tax, depreciation, amortisation and share based payments charges
** Underlying PBT is defined as earnings before taxation and share based payments charges
-- Volume of frames installed decreased by 6.8% to 139,612 (H1 2016: 149,742) -- Average unit sales price up 6.0% to GBP599 (FY 2016: GBP565) -- Continued growth in market share to 11.2% at 30 June 2017 (End 2016: 10.2%) -- Leads generated from media and on-line marketing grew by 9.1% to 42,680 (H1 2016: 39,118) -- New installation depot opened in South Wales -- Completed our new factory extension at Wombwell, South Yorkshire, on time and on budget -- Pre-tax operating cash flow of GBP8.3 million (H1 2016: GBP9.8 million)
Commenting on the results, Steve Birmingham, CEO said:
"The first half of 2017 was an increasingly challenging market however Safestyle increased revenue and market share albeit at a higher cost than historically. As a result, we have experienced a decline in profits in what was the severest contraction of our market since 2008/09.
"So far in H2 we have maintained our order intake in line with the previous year and have already commenced a number of initiatives to reduce our cost base.
"The Group's cash conversion and balance sheet remain strong and the Board is confident of outperforming the market and gaining market share based on our differentiators of price competitiveness, promotional finance offers, quality energy efficient products and outstanding manufacturing capability."
Enquiries:
Safestyle UK plc Tel: 0207 653 9850 Steve Birmingham, Chief Executive Officer Mike Robinson, Chief Financial Officer Zeus Capital (Nominated Adviser Tel: 0203 829 5000 & Joint Broker) Nick How / Dominic King Liberum (Joint Broker) Tel: 0203 100 2100 Neil Patel / Jamie Richards FTI Consulting (Financial Tel: 0203 727 1000 PR) Oliver Winters / Alex Beagley safestyle@fticonsulting.com / James Styles
About Safestyle UK plc
The Group is the leading retailer and manufacturer of PVCu replacement windows and doors to the UK homeowner market. For more information please visit www.safestyleukplc.co.uk or www.safestyle-windows.co.uk.
Chairman's Statement
Summary of Performance
The markets in which Safestyle operates have become more challenging in recent months, and it is with this backdrop that the Group reports its trading performance for the six months ended 30 June 2017.
Revenue was up 1.4% to GBP82.5 million (H1 2016: GBP81.4 million, having been restated following a review of accounting policies in the run up to the introduction of IFRS 15 Revenue Recognition - see Finance Review and Note 4). FENSA statistics show the rate of market decline in H1 2017 accelerated from a Q1 reduction of 2.4% to 17.2% in Q2, and we believe this significantly steeper rate of decline has continued into the first two months of Q3. Our response has been to protect revenues and gain market share, which now stands at 11.2% at 30 June 2017, which has increased the costs of lead generation and conversion into orders. Order intake was up 1.8% for the first 6 months of the year.
Profit before tax declined to GBP8.8 million (H1 2016: GBP9.5 million), with underlying EBITDA down 11.7% at GBP9.8 million. EPS for the period was down from 9.4p to 8.3p. The results reflect the increased cost of delivering sales revenues, and our underlying EBITDA margin declined from 13.6% to 11.8%.
The business continues to successfully convert profit into cash, with H1 2017 cash conversion (the ratio of net cashflow from operating activities before taxation to underlying EBITDA) for the period at 85%, compared with 88% for H1 2016. The Group's balance sheet is robust with cash of GBP17.7 million at 30 June 2017 (GBP13.5 million as at 31 December 2016).
Interim Dividend
We have declared an interim dividend of 3.75 pence per share which will be paid on 6 November 2017 (2016: 3.75p). The record date will be 29 September 2017.
Business Review
The sharp decline in our market has created a number of challenges and opportunities, and we have chosen to protect revenue despite the associated increased costs of lead generation and providing customer finance. We have seen a steady increase in the proportion of customers taking up our promotional finance offers with no deterioration in acceptance rates. Longer term, we continue to regard the potential for enhanced RMI expenditure by the homeowner to be positive, notwithstanding the short term weakness caused by the current uncertain economic outlook for consumers.
We have continued to evolve our business and in the period we have further developed our brand messaging, invested in our infrastructure, and continued to develop our conservatory replacement offer and product range.
We have completed our new factory extension at Wombwell, South Yorkshire, on time and on budget. This is a major step in ensuring we have the UK's leading production facilities. The facility is now fully operational and we expect to deliver manufacturing productivity gains throughout the remainder of the year.
Share Buyback
Our balance sheet is strong and we continue to generate cash. Whilst we take a cautious approach to long term planning, we have previously stated that the Board is committed to returning excess capital to shareholders where our cash resources are materially in excess of investment requirements. With the Company's major investment into its factory extension now complete, we will review this further when we announce our 2017 Full Year results in March 2018 but are today making a separate announcement on a share buy-back programme of up to GBP2.5m.
Outlook
Our expectation is that the market will continue to be weak for at least the remainder of 2017. Consumer confidence has declined, and our outlook is therefore cautious. We expect to continue to gain market share in H2, although sales will continue to be expensive to win and we expect operating margins to be challenging. While market conditions remain at the current low level we will continue to challenge our cost base for efficiencies, though the impact of cost elimination will primarily benefit 2018 and beyond.
We are determined that Safestyle will deliver out performance in its market and gain market share, based on our geographic spread, product range and commercial offerings.
RS Halbert
Chairman
21 September 2017
Finance Review
Revenue
Revenue for the period was GBP82.5 million against GBP81.4 million restated for the same period last year, representing growth of 1.4%. The key factors underpinning this growth were:
-- 9.1% growth in leads generated from direct response from 39,118 to 42,680 -- 6.8% decline in the volume of frames installed from 149,742 to 139,612 -- 8.3% growth in average unit price from GBP553 to GBP599 ex VAT
The price list increase implemented at the start of the year to counterbalance the additional raw material costs resulting from the reduction in the value of Sterling has been secured. Unit prices have been further boosted by growth in higher value items including conservatory upgrades, composite doors and coloured frames.
A review of accounting policies in the run up to the adoption of IFRS15 has led to the revenue from goods relating to financed products to be shown net of the charges incurred in those sales. Previously these were shown as a cost of sale and the results of 30 June 2016 and 31 December 2016 have been restated to reflect these. This amounted to GBP1.7 million in H1 2017 and GBP2.2 million in the same period for 2016. There was no impact to the profit and net assets within these periods.
Gross margin
Gross profit reduced by 2.5% in the period to GBP27.5 million (H1 2016: GBP28.2 million). Gross margin has reduced to 33.3% (H1 2016: 34.6%).
The price list increase from 1 January 2017 more than offset the inflation in raw material costs resulting from Sterling weakness but other direct costs have also seen increases which have led to a dilution in gross margin. In particular, online marketing costs have seen a significant increase with the cost of lead acquisition increasing by 19% against the same period last year reflecting increased competition for leads in a tough market.
In addition, manufacturing costs were higher as a result of the planned disruption during the transfer of equipment into the new factory. This was completed on time and the second half of the year will benefit from the expected productivity and quality benefits.
Other operating expenses
Other operating expenses were unchanged for the period at GBP18.7 million (H1 2016: GBP18.7 million). Savings in charges related to the exercise of options in the prior year were offset by other costs as the business continued to invest in building its brand profile, developing its IT infrastructure and strengthening its management team.
EBITDA, PBT and EPS
Underlying EBITDA (as defined in the financial and operating highlights) was GBP9.8 million for the period (H1 2016: GBP11.1 million), a decrease of 11.7%. PBT decreased by 7.4% from GBP9.5 million in H1 2016 to GBP8.8 million.
Basic earnings per share for the period were 8.3p compared to 9.4p for the same period last year. The basis for these calculations is detailed in note 6 to the accounts.
Cash
The cash balance at 30 June 2017 was GBP17.7 million, an increase of GBP4.2 million since the year end.
Pre-tax operating activities generated GBP8.3 million (2016: GBP9.8 million). Capital expenditure in the period was GBP3.2 million of which GBP2.4 million related to the factory expansion.
Dividends
The Board is declaring an interim dividend of 3.75p per share. The dividend will be paid on 6 November 2017 to shareholders on the register at close of business on 29 September 2017.
Condensed consolidated interim statement of comprehensive income
Unaudited Unaudited Audited Restated Restated Note 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 GBP000 GBP000 GBP000 Revenue 82,484 81,360 159,435 Cost of sales (54,964) (53,173) (103,826) Gross profit 27,520 28,187 55,609 Other operating expenses (18,714) (18,697) (36,362) Operating profit 8,806 9,490 19,247 EBITDA before share based payments and charges relating to exercised LTIP options 9,757 11,103 21,602 Equity settled share based payments charges 8 (160) (104) (240) Charges relating to exercised LTIP options - (947) (947) Depreciation and amortisation (791) (562) (1,168) Operating profit 8,806 9,490 19,247 Finance income 18 55 98 Finance expense (5) (7) (11) Profit before taxation 8,819 9,538 19,334 Taxation 7 (1,957) (1,920) (3,778) Profit after taxation for the period 6,862 7,618 15,556 Other comprehensive - - - income Total comprehensive profit for the period attributable to shareholders 6,862 7,618 15,556 ========== ========== ============ Earnings per share Basic (pence) 6 8.3 9.4 19.0 Diluted (pence) 6 8.2 9.3 18.9
All operations were continuing throughout all periods.
Condensed consolidated interim statement of financial position
Unaudited Unaudited Audited Note 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 GBP000 GBP000 GBP000 Assets Intangible assets - Trademarks 504 504 504 Intangible assets - Goodwill 20,758 20,283 20,758 Intangible assets - Software 499 475 415 Property, plant and equipment 14,699 8,498 12,389 Deferred tax asset 119 30 119 Non-current assets 36,579 29,790 34,185 Inventories 2,006 1,711 2,176 Trade and other receivables 6,438 6,752 4,560 Cash and cash equivalents 17,702 23,552 13,459 Current assets 26,146 32,015 20,195 Total assets 62,725 61,805 54,380 ========== ========== ============ Equity Called up share capital 830 828 828 Share premium account 82,216 81,979 81,979 Profit and loss account 22,850 18,375 22,052 Common control transaction reserve (66,527) (66,527) (66,527) 39,369 34,655 38,332 Liabilities Trade and other payables 12,520 12,812 11,983 Dividends accrued 5 6,224 11,263 - Financial liabilities 35 70 70 Corporation tax liabilities 2,475 521 1,599 Provision for liabilities and charges 657 701 701 Current liabilities 21,911 25,367 14,353 Financial liabilities - 35 - Provision for liabilities and charges 1,445 1,748 1,695 Non-current liabilities 1,445 1,783 1,695 Total liabilities 23,356 27,150 16,048 Total equity and liabilities 62,725 61,805 54,380 ========== ========== ============
Condensed consolidated interim statement of changes in equity
Share Share Profit Common Total capital premium and control equity loss transaction account reserve GBP000 GBP000 GBP000 GBP000 GBP000 Balance at 30 June 2016 828 81,979 16,387 (66,527) 32,667 Total comprehensive profit for the period - - 9,872 - 9,872 Transactions with owners of the Company: Issue of shares - - - - - Equity settled share based payment - - 136 - 136 Deferred tax on equity settled share based payments - - (1,239) - (1,239) Dividends - - (3,104) - (3,104) Balance at 31 December 2016 828 81,979 22,052 (66,527) 38,332 Total comprehensive profit for the period - - 6,862 - 6,862 Transactions with owners of the Company: Issue of shares 2 237 - - 239 Equity settled - - - - - share based payment Deferred tax on equity settled share based payments - - 160 - 160 Dividends - - (6,224) - (6,224) Balance at 30 June 2017 830 82,216 22,850 (66,527) 39,369 ========= ========= ========= ============= ========
Condensed consolidated interim statement of cash flows
Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 GBP000 GBP000 GBP000 Cash flows from operating activities Profit for the year 6,862 7,618 15,556 Adjustments for: Depreciation of plant, property and equipment 671 461 954 Amortisation of intangible fixed assets 120 101 214 Finance income (18) (55) (98) Finance expense 5 7 11 Profit on sale of plant, property and equipment - 7 7 Equity settled share based payments 160 104 240 Tax expense 1,957 1,920 3,778 ---------- ---------- ------------ 9,757 10,163 20,662 Decrease/(Increase) in inventories 170 (211) (676) Increase in trade and other receivables (1,878) (2,894) (702) Increase in trade and other payables 536 2,654 1,824 Increase/(decrease) in provisions (294) 79 26 ---------- ---------- ------------ (1,466) (372) 472 Hire purchase interest paid (5) (7) (11) Other interest paid - - - (5) (7) (11) Taxation paid (1,080) (1,734) (3,893) Net cash from operating activities 7,206 8,050 17,230 ---------- ---------- ------------ Cash flows from investing activities Acquisition of property, plant and equipment (3,092) (1,007) (5,901) Interest received 18 55 98 Proceeds from issue of property, plant and equipment - 42 42 Acquisition of intangible fixed assets (93) - (20) ---------- ---------- ------------ Net cash outflow from investing activities (3,167) (910) (5,781) Cash flows from financing activities Proceeds from the 239 - - issue of ordinary shares Payment of hire purchase and finance leases (35) (73) (108) Dividends paid - - (14,367) ---------- ---------- ------------ Net cash outflow from financing activities 204 (73) (14,475) Net increase in cash and cash equivalents 4,243 7,067 (3,026) Cash and cash equivalents at start of year 13,459 16,485 16,485 Cash and cash equivalents at end of year 17,702 23,552 13,459 ========== ========== ============
Notes to the interim financial information
1 General information
The condensed interim financial information set out herein is in respect of Safestyle UK plc and its subsidiaries (the Group) for the period ended 30 June 2017.
Safestyle UK plc is a public listed company incorporated in Jersey. The registered office address of Safestyle UK plc is 47 Esplanade, St Helier, Jersey JE1 0BD.
The financial information presented for the year ended 31 December 2016 is not the statutory accounts for that financial year. These accounts have been reported on by the company's auditor. The report of the auditor was unqualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report.
The company is not required to present parent company information.
2 Basis of preparation
The condensed consolidated interim financial information for the period ended 30 June 2017 has been prepared in accordance with IAS 34, 'Interim financial reporting' as adopted by the European Union.
Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 December 2016.
The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the period ended 31 December 2016 which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
The accounting policies adopted in the condensed interim financial information are consistent with those set out in financial statements for the period ended 31 December 2016.
3 Going concern
The Group has considerable financial resources and has prepared forecasts that show the Group is expected to continue to trade solidly. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.
The assessment of the Group's ability to execute its strategy by funding future working capital requirements involves judgement. The Directors monitor future cash requirements to assess the Group's ability to meet these funding requirements.
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
4 Significant accounting policies
Accounting estimates
In preparing this condensed consolidated interim financial report, significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2016.
Revenue recognition
A review of accounting policies in the run up to the adoption of IFRS15 has led to the revenue from goods relating to financed products to be shown net of the charges incurred in those sales. Previously these were shown as a cost of sale and the results of 30 June 2016 and 31 December 2016 have been restated to reflect these. The effect on revenue in the period was GBP1,735k (GBP2,188k 30 June 2016, GBP3,681k 31 December 2016).
There is no effect on the overall gross margin or operating profit for the Group within these periods.
5 Dividends Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 The aggregate amount of dividends comprises: GBP'000 GBP'000 GBP'000 Dividends paid in respect of the period - - 14,367 Dividends declared 6,224 11,263 - 6,224 11,263 14,367 ---------- ---------- ------------
A final dividend for the year end 31 December 2016 of 7.5 pence per ordinary share totaling GBP6,224,219 was paid on 10 July 2017.
A proposed interim dividend for the half year end 30 June 2017 of 3.75 pence per ordinary share will be paid on 6 November 2017.
6 Earnings per share
a) Basic earnings per share
The calculation of basic earnings per share has been based on the following profit attributable to ordinary shareholders and weighted-average number of shares outstanding. Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 GBP'000 GBP'000 GBP'000 Profit attributable to ordinary shareholders 6,862 7,618 15,556 ============= ============= ============= Weighted-average number of ordinary shares (basic) No of shares No of shares No of shares '000 '000 '000 Issued ordinary shares at period end 82,868 81,184 82,006 ============= ============= =============
b) Diluted earnings per share
The calculation of diluted earnings per share has been based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 GBP'000 GBP'000 GBP'000 Profit attributable to ordinary shareholders 6,862 7,618 15,556 ============= ============= ============= No of shares No of shares No of shares '000 '000 '000 Weighted-average number of ordinary shares (basic) 82,868 81,184 82,006 Effect of dilutive share options and warrants 319 385 341 Weighted-average number of ordinary shares (basic) at period end 83,187 81,569 82,347 ============= ============= ============= The average market value of the Company's shares for the purpose of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2017 2016 2016 Earnings per share (pence) 8.3 9.4 19.0 Diluted earnings per share (pence) 8.2 9.3 18.9 7 Taxation
The condensed interim financial information includes a tax charge based on management's best estimate of the full year effective tax rate. The effective tax rate applied in the period was 22.19% (period ended 30 June 2016: 20.13%) which compares to the standard corporation tax rate of 20.00%.
A reduction in the UK corporation tax rate from 21% to 20% (effective from 1 April 2015) was substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2017. This will reduce the Group's future current tax charge accordingly. The deferred tax asset at 30 June 2017 has been calculated based on these rates.
8 Share based payments
At 30 June 2017 the Group had the following share based payment arrangements:
LTIP
The Group operates an equity-settled LTIP remuneration scheme for Directors and certain management ("LTIP 2015", "LTIP 2016" & "LTIP 2017").
On 10 April 2017, a further 348,210 options were granted ("LTIP 2017"). All schemes require a combination of specific performance based criteria and remaining an employee for a minimum period.
The numbers of share options in existence during the year were as follows:
Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 2017 30 June 2016 31 December 2016 Number Weighted Number Weighted Number Weighted of share average of share average of share average options exercise options exercise options exercise price price price ------------------- ---------- ---------- ---------- ---------- ------------ ---------- Outstanding at start of period 1,030,134 GBP2.18 452,460 GBP1.37 4,581,976 GBP1.00 Granted during the year 348,210 - 87,485 GBP2.25 448,533 GBP1.79 Issued in the year - - - - (2,564,427) GBP1.00 Cancelled in the year - - - - (1,421,683) GBP1.00 Lapsed in the year (118,318) GBP2.09 (59,093) GBP1.49 (14,265) GBP1.79 Outstanding at end of period 1,260,026 GBP1.58 480,852 GBP1.51 1,030,134 GBP2.18 Exercisable at end of period - - - - - - -------------------- ---------- ---------- ---------- ---------- ------------ ----------
Options are valued using the Black-Scholes option pricing model. The following information is relevant in the determination of the fair value of the options granted during the period.
Unaudited 6 months ended 30 June 2017 LTIP LTIP LTIP 2017 2016 2015 Grant date 10/04/2017 29/04/2016 01/04/2015 Vesting date 10/04/2020 29/04/2019 01/04/2018 Lapsing date 10/04/2027 01/04/2026 01/04/2025 Risk free interest rate 0.15% 1.22% 1.28% Expected volatility 33.56% 36.93% 43.13% Expected option life (in years) 6.50 6.50 6.50 Weighted average share GBP3.04 GBP2.67 GBP1.80 price after adjusting for PV of dividends Weighted average GBP0.00 GBP2.68 GBP1.79 exercise price Weighted average fair value of options granted 255.90p 65.79p 44.78p Dividend Yield 5.71% 3.60% 5.20% Remaining contractual life 9.78 8.76 7.76
At the grant date there was limited share price history for the company on which to calculate volatility. Volatility was therefore estimated using both Safestyle and companies classified in the 'Home Improvement Retailers' subsector on the London Stock Exchange.
SAYE
On 1 April 2017 the company launched a new share save (SAYE) scheme ("SAYE 2017") in addition to the existing schemes ("SAYE 2013", "SAYE 2014" and "SAYE 2015") for employees. All schemes allow employees to acquire a certain number of shares at a discount of 20% of the share price prior to the invitation to join the scheme, using amounts saved under a 'Save As You Earn' savings contract.
The "SAYE 2013" matured within the period and as of the 30 June 2017, 183,016 options were issued at a price of 130.8 pence per share from 198,714 options granted.
The numbers of share options in existence during the year were as follows:
Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 2017 30 June 2016 31 December 2016 Number Weighted Number Weighted Number Weighted of share average of share average of share average options exercise options exercise options exercise price price price ---------------- ----------------- ---------- -------------------- ---------- -------------------- ---------- Outstanding at start of period 423,382 GBP1.49 452,460 GBP1.37 452,460 GBP1.37 Granted during the year 119,955 GBP2.51 87,485 GBP2.25 87,485 GBP2.25 Issued in the year (183,016) GBP1.31 Lapsed during the period (5,750) GBP1.78 (59,093) GBP1.49 (116,563) GBP1.57 Outstanding at end of period 354,571 GBP1.93 480,852 GBP1.51 423,382 GBP1.49 Exercisable at end of period 15,686 GBP1.31 - - - - ----------------- ----------------- ---------- -------------------- ---------- -------------------- ----------
Options are valued using the Black-Scholes option pricing model. The following information is relevant in the determination of the fair value of the options granted during the year.
Unaudited 6 months ended 30 June 2017 SAYE SAYE SAYE SAYE 2017 2016 2015 2014 Grant date 25/04/2017 01/04/2016 01/04/2015 27/03/2014 Vesting date 01/06/2020 01/05/2019 01/05/2018 01/05/2017 Lapsing date 01/12/2020 01/11/2019 01/11/2018 01/11/2017 Risk free interest rate 0.21% 0.56% 0.76% 1.31% Expected volatility 34.17% 32.88% 23.80% 52.80% Expected option life (in years) 3.35 3.35 3.35 3.35 Weighted average share GBP3.14 GBP2.81 GBP1.80 GBP1.57 price after adjusting for PV of dividends Weighted average GBP2.51 GBP2.25 GBP1.43 GBP1.31 exercise price Weighted average fair value of options granted 68.60p 71.93p 41.52p 58.40p Dividend Yield 5.53% 3.40% 5.20% 8.00% Remaining contractual life 3.35 2.34 1.34 0.34
At the grant date there was limited share price history for the company on which to calculate volatility. Volatility was therefore estimated using both Safestyle and companies classified in the 'Home Improvement Retailers' subsector on the London Stock Exchange.
The total share-based expense comprises:
Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 2017 30 June 2016 31 December 2016 GBP000 GBP000 GBP000 Equity settled - LTIP 121 60 369 Equity settled - SAYE 39 44 74 Employers national insurance on issue of LTIP with associated charges - - 947 160 104 1,390 ------------- ------------- ------------ 9 Seasonality
Order intake is subject to small seasonal fluctuations with higher demand in the first and fourth quarters as a result of seasonal weather factors. The business can, within limits, smooth this demand by flexing its order book and aims to level load its operations to minimize costs. As a result revenues and profits would normally be similar for both halves of the year.
INDEPENDENT REVIEW REPORT TO SAFESTYLE UK PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2017 which comprises the Condensed Consolidated Interim Statement of Comprehensive Income, the Condensed Consolidated Interim Statement of Changes in Equity, the Condensed Consolidated interim Statement of Financial Position, the Condensed Consolidated Interim Statement of Cash Flows and the related explanatory notes.
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 report for the six months ended 30 Junsafe 2017 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the AIM Rules.
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 UK. 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. We read the other information contained in the half-yearly report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
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.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this 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 reached.
Ian Beaumont
for and on behalf of KPMG LLP
Chartered Accountants
1 Sovereign Square,
Sovereign St,
Leeds
LS1 4DA
21 September 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UAVVRBKAKURR
(END) Dow Jones Newswires
September 21, 2017 02:01 ET (06:01 GMT)
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