Share Name Share Symbol Market Type Share ISIN Share Description
CHAMBERLIN PLC NEX:CMH.GB NEX Ordinary Share GB0001870228
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Chamberlin PLC Half-year Report

24/12/2018 7:00am

UK Regulatory (RNS & others)


CHAMBERLIN (NEX:CMH.GB)
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1 Year : From Oct 2018 to Oct 2019

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TIDMCMH

RNS Number : 3573L

Chamberlin PLC

24 December 2018

24 December 2018

AIM: CMH

CHAMBERLIN PLC

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

Half Year Results*

For the six months to 30 September 2018

Key Points

-- Group continuing revenues for six months to September 2018 rose by 21.3% to GBP17.4m (2017**: GBP14.3m), mainly reflecting increased production volumes of turbo charger bearing housings.

-- Gross margin at 12.6% (preceding six months to 31 March 2018: 17.9% and six months to 30 Sept 2017: 15.9%) was affected by excess cost and production inefficiencies.

-- Underlying loss before tax reduced by 40.5% to GBP485,000 (2017**: loss of GBP816,000). Statutory loss before tax decreased by 68.9% to GBP166,000 (2017: loss of GBP534,000).

   --      Statutory loss per share decreased to 3.34p (2017**: loss of 13.81p). 
   --      Foundries revenues up by 24.0% to GBP15.4m: 
   -    demand for turbo charger bearing housings rose, as expected 
   -    machining facility contributed incremental revenues of GBP2.8m (2017: GBP0.8m) 
   --    Engineering revenues up by 3.3% to GBP1.9m. 

-- Post period, as announced on 20 December 2018, the Group completed the sale of Exidor, its Cannock-based engineering business, for a consideration of GBP10m in cash to ASSA ABLOY Limited.

-- Volume-related inefficiencies in the foundry division are now resolved and the Group is expected to deliver an improved performance in the second half of the financial year although the trading backdrop is difficult.

Notes

*The results for the six months to 30 September 2018 are stated on a continuing basis

**The comparative figures for 2017 have been restated to reflect the presentation of Exidor as a discontinued operation.

Chairman, Keith Butler-Wheelhouse, commented:

"Production volumes at our foundry operations rose significantly over the period, reflecting the ramping up of major contracts and the increasing use of turbo chargers in both hybrid vehicles and petrol engine cars to improve fuel efficiency. However, while revenues rose strongly, foundry margins were significantly affected by production issues. These volume-related inefficiencies have now been addressed and the Group is expected to deliver an improved performance in the second half although the trading backdrop is difficult.

The recently completed sale of the Exidor engineering business has significantly strengthened the Group's financial position, reducing both net debt and pension liabilities and providing additional working capital, and we remain focused on the further development of our core operations."

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

Enquiries

 
 Chamberlin plc                       T: 01922 707100 
  Kevin Nolan, Chief Executive 
  Neil Davies, Finance Director 
 
 Cenkos Securities plc                T: 020 7397 8900 
  (Nominated Adviser and Broker) 
  Russell Cook, Katy Birkin 
 
 KTZ Communications                   T: 020 3178 6378 
  (Financial PR) 
  Katie Tzouliadis, Emma Pearson, 
  Dan Mahoney 
 

CHAIRMAN'S STATEMENT

Introduction

Revenues in the first six months of the financial year were sharply higher than the same period last year as production volumes at our core foundry increased and our engineering business also performed well. However, the Group's overall margin was adversely affected by excess cost and production inefficiency in the foundries division. These volume-related inefficiencies in the foundry division are now resolved and the Group is expected to deliver an improved performance in the second half of the financial year although the trading backdrop is difficult.

Results

The Group's continuing revenues increased by 21.3% to GBP17.4m in the six months to September 2018 (2017: GBP14.3m). This substantial rise was driven mainly by the expected increase in production volumes for turbo charger bearing housings.

While gross profit increased by 18.7% to GBP2.2m (2017: GBP1.8m), cost inefficiencies within our foundry operation, principally associated with the ramp up of production volumes, depressed this result, with gross margin at 12.6%. This compares to gross margin of 17.9% in the preceding six months to 31 March 2018.

The underlying loss before tax reduced by 40.5% to GBP485,000 (2017: loss of GBP816,000).

On a statutory basis, the loss before tax of GBP608,000 showed a significant turnaround against the same period in the prior year (2017: loss before tax of GBP1,052,000). The loss is after impairment of deferred tax assets of nil (2017: GBP374,000). The statutory loss per share was 3.34p (2017: loss of 13.81p).

The net debt position following the receipt of the proceeds of the sale of Exidor is GBP3.7m. The net debt position at 30 September 2018 was GBP10.4m (30 September 2017: GBP8.2m; 31 March 2018: GBP8.9m).

Pension

The Group's net pension liability has decreased by 20% to GBP4.0m (31 March 2018: GBP5.0m). This was due to a reduction in the value of liabilities as a consequence of an increase in bond yields and therefore the discount rate. Following the sale of Exidor, the net pension liability has further reduced to GBP1.5m.

Operations

The two foundries, at Walsall and Scunthorpe, generated combined revenues of GBP15.4m (2017: GBP12.4m) over the first half, a rise of 24.0% over the same period last year and moved from an operating loss to a breakeven operating profit position of GBP0.1m (2017: loss of GBP0.2m).

As expected, the new machining facility at Walsall contributed significantly increased higher revenues, of GBP2.8m (2017: GBP0.8m). The increased revenues generated by our foundry operations reflect the benefits of contracts won to supply turbo charger bearing housings. These are increasingly being used to maximise fuel efficiency of both petrol and hybrid vehicle engines. Hybrid vehicles typically incorporate smaller petrol engines with two turbo chargers in many cases.

The production issues which impacted margins have been addressed and we therefore expect to deliver an improved performance in the second half although the trading backdrop is difficult.

Following the recent sale of Exidor, the engineering division now comprises Petrel, which manufactures lighting and control equipment for use in hazardous areas. The division increased revenues by 3.3% to GBP1.94m (2017: GBP1.87m). Operating profit improved to GBP0.12m (H1 2017: GBP0.07m), a rise of 63.9%.

The sale of Exidor to ASSA ABLOY Ltd, the largest global supplier of lock and security systems, was agreed for a total consideration of GBP10m, payable in cash. The proceeds improve the Group's financial position, reducing net debt, providing additional working capital and also decreasing certain existing pension liabilities.

Outlook

The Group is expected to deliver an improved second half performance. However, trading conditions remain tough due to schedule reductions from turbo charger customers. This reflects uncertainties created by Brexit and the new vehicle emissions testing regime, and we are taking actions to respond appropriately.

Keith Butler-Wheelhouse

Chairman

21 December 2018

Consolidated Income Statement

for the six months ended 30 September 2018

 
 
                                                                               Restated 
                                      Unaudited                                Unaudited 
                                   six months ended                         six months ended                           Year ended 
                 Note              30 September 2018                       30 September 2017                          31 March 2018 
                                                #                                        #                                       # 
                       Underlying  Non-underlying        Total  Underlying  Non-underlying       Total  Underlying  Non-underlying         Total 
                           GBP000          GBP000       GBP000      GBP000          GBP000      GBP000      GBP000          GBP000        GBP000 
 
 Revenue           2       17,363               -       17,363      14,316               -      14,316      30,153               -        30,153 
 Cost of sales           (15,170)               -     (15,170)    (12,469)               -    (12,469)    (25,475)               -      (25,475) 
 Gross profit               2,193               -        2,193       1,847               -       1,847       4,678               -         4,678 
 Other 
  operating 
  expenses         7      (2,526)            (61)      (2,587)     (2,535)           (172)     (2,707)     (4,994)           (324)       (5,318) 
                       ----------  --------------  -----------  ----------  --------------  ----------  ----------  --------------  ------------ 
 Operating 
  (loss)/ 
  profit                    (333)            (61)        (394)       (688)           (172)       (860)       (316)           (324)         (640) 
 Finance costs     3        (152)            (62)        (214)       (128)            (64)       (192)       (347)           (126)         (473) 
                       ----------  --------------  -----------  ----------  --------------  ----------  ----------  --------------  ------------ 
 (Loss)/ profit 
  before tax                (485)           (123)        (608)       (816)           (236)     (1,052)       (663)           (450)       (1,113) 
 Tax credit/ 
  (expense)       4,7          98              23        (121)          78           (329)       (251)       (324)              85         (239) 
                       ----------  --------------  -----------  ----------  --------------  ----------  ----------  --------------  ------------ 
 (Loss)/ profit 
  for the 
  period 
  from 
  continuing 
  operations                (387)           (100)        (487)       (738)           (565)     (1,303)       (987)           (365)       (1,352) 
                 ----  ----------  --------------  -----------  ----------  --------------  ----------  ----------  --------------  ------------ 
 Discontinued 
 operations 
 Profit for the 
  period from 
  discontinued 
  operations                  221               -          221         204               -         204         539               -           539 
                 ----  ----------  --------------  -----------  ----------  --------------  ----------  ----------  --------------  ------------ 
 (Loss)/ profit 
  for the 
  period 
  attributable 
  to 
  equity 
  holders 
  of the Parent 
  Company                   (166)           (100)        (266)       (534)           (565)     (1,099)       (448)           (365)         (813) 
                       ==========  ==============  ===========  ==========  ==============  ==========  ==========  ==============  ============ 
 
 (Loss) per 
 share 
 from 
 continuing 
 operations: 
 Basic             5                                   (6.10)p                                (16.37)p                                  (16.99)p 
 
 
  Earnings per 
  share 
  from 
  discontinued 
  operations: 
 Basic             5                                     2.77p                                   2.57p                                     6.77p 
 
 
  Total (loss) 
  per 
  share: 
 Basic             5                                   (3.34)p                                (13.81)p                                   (10.2)p 
 

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

Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2018

 
                                       Unaudited 
                                      six months           Unaudited 
                                           ended    six months ended    Year ended 
                                    30 September        30 September      31 March 
                                            2018                2017          2018 
                                          GBP000              GBP000        GBP000 
 
 Loss for the period                       (266)             (1,099)         (813) 
 Other comprehensive 
  income 
 Reclassification for 
  cash flow hedges included 
  in sales                                  (19)               (152)          (18) 
 Movements in fair value 
  on cash flow hedges 
  taken to other comprehensive 
  income                                   (139)                 165            87 
 Deferred tax on movements 
  in cash flow hedges                         26                 (2)          (12) 
 Net other comprehensive 
  expense that may be 
  recycled to profit 
  and loss                                 (132)                  11            57 
 
   Re-measurement gains/ 
   (losses)on pension 
   assets and liabilities                    984                 291           (8) 
 Deferred/ current tax 
  on re-measurement (losses)/ 
  gains on pension assets 
  and liabilities                          (186)                (55)             2 
 Net other comprehensive 
  income/(expense) that 
  will not be reclassified 
  to profit and loss                         798                 236           (6) 
                                  --------------  ------------------  ------------ 
 
   Other comprehensive 
   expense for the period 
   net of tax                                666                 247            51 
 Total comprehensive 
  expense for the period 
  attributable to equity 
  holders of the Parent 
  Company                                    400               (852)         (762) 
                                  ==============  ==================  ============ 
 

Consolidated Balance Sheet

at 30 September 2018

 
                                      Unaudited       Unaudited 
                                   30 September    30 September   31 March 
                                           2018            2017       2018 
                                         GBP000          GBP000     GBP000 
 Non-current assets 
  Property, plant and 
   equipment                             10,407          10,380     11,703 
  Intangible assets                         298             424        427 
  Deferred tax assets                       945           1,141      1,136 
                                 --------------  --------------  --------- 
                                         11,650          11,945     13,266 
 Current assets 
  Assets held for sale                    3,140               -          - 
  Inventories                             2,818           3,367      3,551 
  Trade and other receivables             7,151           7,617      7,985 
                                         13,109          10,984     11,536 
                                 --------------  --------------  --------- 
 Total assets                            24,759          22,929     24,802 
                                 ==============  ==============  ========= 
 
 Current liabilities 
  Financial liabilities                   8,614           6,246      6,989 
  Trade and other payables                6,509           6,579      7,465 
                                         15,123          12,825     14,454 
                                 --------------  --------------  --------- 
 Non-current liabilities 
  Financial liabilities                   1,855           1,972      1,889 
  Deferred tax liabilities                    -              17         23 
  Provisions                                200             200        200 
  Defined benefit pension 
   scheme deficit                         4,023           4,850      5,080 
                                          6,078           7,039      7,192 
 
 Total liabilities                       21,201          19,864     21,646 
                                 --------------  --------------  --------- 
 
 Capital and reserves 
  Share capital                           1,990           1,990      1,990 
  Share premium                           1,269           1,269      1,269 
  Capital redemption 
   reserve                                  109             109        109 
  Hedging reserve                         (174)            (61)       (15) 
  Retained earnings                         364           (242)      (197) 
                                 --------------  --------------  --------- 
 Total equity                             3,558           3,065      3,156 
                                 --------------  --------------  --------- 
 
 Total equity and liabilities            24,759          22,929     24,802 
                                 ==============  ==============  ========= 
 

Consolidated Cash Flow Statement

for the six months ended 30 September 2018

 
                                           Unaudited       Unaudited 
                                          six months      six months 
                                               ended           ended                      Year ended 
                                        30 September    30 September                        31 March 
                                                2018            2017                            2018 
                                              GBP000          GBP000                          GBP000 
 Operating activities 
 (Loss) for the period before 
  tax                                          (608)         (1,052)                         (1,113) 
 Adjustments for: 
 Net finance costs excluding 
  pensions                                       152             128                             347 
 Depreciation of property, 
  plant and equipment                            631             618                           1,280 
 Amortisation of software                         28              48                              60 
 Amortisation of development                      10               -                               - 
  costs 
 Profit on disposal of property 
  plant and equipment                              8               -                               5 
 Share based payments                              4              39                              46 
 Difference between pension 
  contributions paid and 
  amounts recognised in the 
  Income Statement                              (73)            (67)                           (137) 
 Increase in inventories                       (506)             158                              75 
 Increase in receivables                       (846)           (293)                           (315) 
 Increase in payables                            354              96                             544 
 Cash (outflow)/ inflow 
  from continuing operations                   (846)           (325)                             792 
 Cash (outflow)/ inflow 
  from discontinued operations                  (45)              23                               - 
 Net cash (outflow)/inflow 
  from operating activities                    (891)           (301)                           1,300 
 
 Investing activities 
  Purchase of property, 
   plant and equipment                         (464)           (887)                         (2,958) 
  Purchase of software                             -            (14)                            (16) 
  Development costs                                -               -                            (24) 
  Disposal of property, 
   plant and equipment                             -              21                              25 
  Investing activities from 
   discontinued operations                      (68)               -                               - 
 Net cash outflow from investing 
  activities                                   (532)           (880)                         (2,973) 
 
 Financing activities 
  Interest paid                                (168)           (142)                           (377) 
  Repayment of asset loans                         -            (81)                           (200) 
  Net invoice finance drawdown                 2,127           1,194                           1,230 
  Import loan facility (repayment)           (1,137)           (879)                            (98) 
  Finance leases taken out                       780             891                             849 
 
   Net cash inflow from financing 
   activities                                  1,602             983                           1,404 
                                      --------------  --------------  ------------------------------ 
 
 
 
   Net increase in cash and 
   cash equivalents                              179           (199)                           (269) 
 
 
   Cash and cash equivalents 
   at the start of the period                  (485)           (216)                           (216) 
                                      --------------  --------------  ------------------------------ 
 
   Cash and cash equivalents 
   at the end of the period                    (306)           (414)                           (485) 
                                      ==============  ==============  ============================== 
 
 Cash and cash equivalents 
  included in discontinued 
  operations                                     902             273                             572 
 
 Cash and cash equivalents 
  for continuing operations                  (1,208)           (687)                         (1,057) 
 
 Cash and cash equivalents 
  compromise: 
 
   Overdraft                                   (306)           (414)                           (485) 
                                      ==============  ==============  ============================== 
 

Consolidated Statement of Changes in Equity

for the six months ended 30 September 2018

 
                                                                                                    Attributable 
                                                                                                       to equity 
                                                                 Capital                                 holders 
                                                              redemption    Hedging     Retained          of the 
                             Share capital   Share premium       reserve    reserve     earnings          parent 
 
                                    GBP000          GBP000        GBP000     GBP000       GBP000          GBP000 
 
 At 1 April 2017                     1,990           1,269           109       (72)          582           3,878 
 Loss for the period                     -               -             -          -      (1,099)         (1,099) 
 Other comprehensive 
  expense for the period 
  net of tax                             -               -             -         11          236             247 
                            --------------  --------------  ------------  ---------  -----------  -------------- 
 Total comprehensive 
  expense                                -               -             -         11        (863)           3,026 
 Share based payments                    -               -             -          -           39              39 
 Total of transactions 
  with shareholders                      -               -             -          -           39              39 
 
 At 30 September 2017                1,990           1,269           109       (61)        (242)           3,065 
 
 Loss for the period                     -               -             -          -          286             286 
 Other comprehensive 
  income/ (expense) 
  for the period net 
  of tax                                 -               -             -         46        (242)           (196) 
                            --------------  --------------  ------------  ---------  -----------  -------------- 
 Total comprehensive 
  income                                 -               -             -         46           44              90 
 Share based payments                    -               -             -          -            7               7 
 Deferred tax on employee 
  share options                          -               -             -          -          (6)             (6) 
                            --------------  --------------  ------------  ---------  -----------  -------------- 
 Total of transactions 
  with shareholders                      -               -             -          -            1               1 
 
 At 1 April 2018                     1,990           1,269           109       (15)        (198)           3,155 
 
 Loss for the period                     -               -             -          -        (266)           (266) 
 Other comprehensive 
  income for the period 
  net of tax                             -               -             -      (132)          798             665 
 Total comprehensive 
  income/ (expense)                      -               -             -      (132)          532             400 
 Share based payments                    -               -             -          -            4               4 
 Total of transactions 
  with shareholders                      -               -             -          -            4               4 
 
 At 30 September 2018                1,990           1,269           109      (147)          338           3,559 
                            ==============  ==============  ============  =========  ===========  ============== 
 

Independent review report to Chamberlin plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report of Chamberlin Plc (the 'company') for the six months ended 30 September 2018 which comprises Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and the related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with 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 review work has been undertaken so that we might state to the company those matters we are required to state to them 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 as a body, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The 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 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards 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 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 enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Birmingham

21 December 2018

Notes to the Interim Financial statements

   1              General information and accounting policies 

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

The interim condensed consolidated financial statements do not comprise the Group's statutory accounts as defined by section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2018 were approved by the board of directors on 14 June 2018 and were filed at Companies House. The auditor's report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.

Basis of preparation

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

Accounting policies

The principal accounting policies applied in preparing the interim Financial Statements comply with IFRS as adopted by the European Union and are consistent with the policies set out in the Annual Report and Accounts for the year ended 31 March 2018.

No new standards or interpretations issued since 31 March 2018 have had a material impact on the accounting of the Group.

Restatement

The unaudited income statement for the six months to 30 September 2017, and the accompanying notes, have been restated to reflect the presentation of Exidor as a discontinued operation.

Going concern

The Group's forecasts and projections, taking account of reasonably possible changes in trading conditions, show that the Group is able to operate within the level of its current bank facilities, comprising a GBP7.75m invoice discounting facility renewable in March 2019 (no indication that this will not be renewed in March 2019) and finance leases of GBP3.3m repayable over 5 years. As a consequence, the Directors believe that the Group is well placed to manage its business and financial risks successfully.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the interim condensed consolidated Financial Statements.

   2              Segmental analysis 

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

 
                                       Segmental revenue                        Segmental operating profit 
                                                 Restated                                 Restated 
                                  Unaudited     Unaudited                  Unaudited     Unaudited 
                                 six months    six months         Year    six months    six months 
                                      ended         ended        ended         ended         ended     Year ended 
                                     30 Sep        30 Sep     31 March        30 Sep        30 Sep       31 March 
                                       2018          2017         2018          2018          2017           2018 
 
                                     GBP000        GBP000       GBP000        GBP000        GBP000         GBP000 
 
 Foundries                           15,427        12,443       26,396           115         (166)            528 
 Engineering                          1,936         1,873        3,757           119            73            229 
                         ------------------  ------------  -----------  ------------  ------------  ------------- 
 Continuing operations               17,363        14,316       30,153           234          (93)            757 
 Discontinued 
  operations                          4,016         3,590        7,517           293           255            672 
                         ------------------  ------------  -----------  ------------  ------------  ------------- 
 Segmental results                   21,379        17,906       37,670           527           162          1,429 
                         ------------------  ------------  -----------  ------------  ------------  ------------- 
 
 Reconciliation of reported segmental operating profit to (loss)/ 
  profit before tax 
                                                                                          Restated 
                                                                           Unaudited     Unaudited 
                                                                          six months    six months 
                                                                               ended         ended     Year ended 
                                                                              30 Sep        30 Sep       31 March 
                                                                                2018          2017           2018 
 
                                                                              GBP000        GBP000         GBP000 
 Segmental operating 
  profit                                                                         234          (93)            757 
 Shared costs                                                                  (567)         (594)        (1,073) 
 Exceptional 
  and non-underlying 
  costs                                                                         (61)         (172)          (324) 
 Net finance 
  costs                                                                        (230)         (206)          (503) 
 Profit from 
  discontinued 
  operations                                                                     293           255            672 
 (Loss)/ profit 
  before tax                                                                   (331)         (810)          (471) 
                                                                        ============  ============  ============= 
 
 

The Foundries segment is a supplier of iron castings, in raw or machined form, to a variety of industrial customers who incorporate the castings into their own products or carry out further machining or assembly operations on the castings before selling them on. The Engineering segment provides manufactured and imported products to distributors and end-users. The products fall into the categories of hazardous area lighting and control gear and cable management.

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

   3              Finance income and costs 
 
                                            Unaudited       Unaudited 
                                           six months      six months 
                                                ended           ended   Year ended 
                                         30 September    30 September     31 March 
                                                 2018            2017         2018 
                                               GBP000          GBP000       GBP000 
 Interest on bank overdraft                     (168)           (142)        (377) 
 Net interest on net defined benefit 
  pension liability                              (62)            (64)        (126) 
                                                (230)           (206)        (503) 
                                       ==============  ==============  =========== 
 
   4              Income tax expense 

An effective rate of tax for the six months to 30 September 2018 of 19% (30 September 2017: 36%) has been used in these interim statements.

The previous effective rate of tax was higher than the standard rate because of writing off tax losses and deferred tax assets brought forward at Russell Ductile Castings Limited leading to an increased tax charge

The corporation tax rate remained at 19% for the year ended 31 March 2018. The rate will fall to 17% from 1 April 2020. It is not anticipated that the subsequent reduction to 17% will have a material effect on the Company's future current or deferred tax charges.

   5              (Loss)/ earnings per share 

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

 
                                              Unaudited       Unaudited 
                                       six months ended      six months     Year ended 
                                           30 September           ended       31 March 
                                                   2018    30 September           2018 
                                                                   2017 
                                                 GBP000          GBP000         GBP000 
 Continuing operations loss for 
  basic earnings per share                        (487)         (1,303)        (1,352) 
 Exceptional costs                                    -              21             60 
 Net financing cost and service 
  cost on pension obligation                        119             176            344 
 Share based payments charge                          4              39             46 
 Deferred tax asset write off                         -             374              - 
 Taxation effect of the above                      (23)            (45)           (85) 
                                     ------------------  --------------  ------------- 
 
   (Loss)/ earnings for underlying 
   earnings per share                             (387)           (738)          (987) 
                                     ------------------  --------------  ------------- 
 
 
 
 
                                                Unaudited       Unaudited 
                                         six months ended      six months     Year ended 
                                             30 September           ended       31 March 
                                                     2018    30 September           2018 
                                                                     2017 
                                                   GBP000          GBP000         GBP000 
 Discontinued operations loss 
  for basic earnings per share                        221             204            539 
 Exceptional costs                                      -               -              - 
 Taxation effect of the above                           -               -              - 
                                       ------------------  --------------  ------------- 
 
   Earnings for underlying earnings 
   per share                                          221             204            539 
                                       ------------------  --------------  ------------- 
 
                                                Unaudited       Unaudited 
                                         six months ended      six months     Year ended 
                                             30 September           ended       31 March 
                                                     2018    30 September           2018 
                                                                     2017 
                                                      000             000            000 
 Weighted average number of ordinary 
  shares                                            7,958           7,958          7,958 
 Adjustment to reflect dilutive 
  shares under option                                 350             350            350 
                                       ------------------  --------------  ------------- 
 
   Diluted weighted average number 
   of ordinary shares                               8,308           8,308          8,308 
                                       ------------------  --------------  ------------- 
 

There is no adjustment to the 350,000 shares respectively under option for the loss per share calculation as they are required to be excluded from the weighted average number of shares as they are anti-dilutive for the period then ended.

   6              Pensions 

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

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

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

 
                                  30 September   30 September   31 March 
                                          2018           2017       2018 
 
 Salary increases                          n/a            n/a        n/a 
 Pension increases (post 1997)            3.1%           3.1%       3.1% 
 Discount rate                            2.7%           2.6%       2.5% 
 Inflation assumption - RPI               3.2%           3.2%       3.2% 
 Inflation assumption - CPI               2.2%           2.2%       2.2% 
 

The demographic assumptions used for 30 September 2018, were the same as used in 31 March 2018, 30 September 2017 and the last full actuarial valuation performed as at 1 April 2016. The triennial valuation as at 1 April 2016 was concluded during the period and maintained the current level of monthly cash payments paid into the scheme. The contributions expected to be paid during the year to 31 March 2019 are GBP271,000. The triennial valuation as at 1 April 2016 increased the deficit reduction period from 2028 to 2038.

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

 
                                                 Unaudited                   Unaudited 
                                                six months                  six months      Year to 
   Funding status                                       to                          to     31 March 
                                              30 September                30 September         2018 
                                                      2018                        2017       GBP000 
                                                    GBP000                      GBP000 
 Scheme assets at end of period                     13,617                      13,421       13,207 
 Benefit obligations at end of 
  period                                          (17,640)                    (18,272)     (18,287) 
                                  ------------------------  --------------------------  ----------- 
 
 Deficit in scheme                                 (4,023)                     (4,850)      (5,080) 
 Related deferred tax asset                            684                         825          864 
                                  ------------------------  --------------------------  ----------- 
 Net pension liability                             (3,339)                     (4,025)      (4,216) 
                                  ========================  ==========================  =========== 
 
 

The decrease in the net pension liability since March 2018 is mainly due to a decrease in the value of liabilities as a consequence of an increase in bond yields increasing the discount rate.

   7              Exceptional costs and non-underlying items 
 
                                       Unaudited       Unaudited 
                                      six months      six months     Year ended 
                                           ended           ended       31 March 
                                    30 September    30 September           2018 
                                            2018            2017 
                                          GBP000          GBP000         GBP000 
 Group reorganisation                          -              21             60 
 Exceptional costs                             -              21             60 
                                  ==============  ==============  ============= 
 
 Share based payment charge                    4              39             46 
 Defined benefit pension scheme 
  administration costs                        57             112            218 
 
 Non-underlying other operating 
  expenses                                    61             172            324 
                                  --------------  --------------  ------------- 
 
 
 Non-underlying exceptional costs        -      -      - 
  of discontinued operations 
                                    ------  -----  ----- 
 
 Taxation 
 Write off of deferred tax assets        -    374        - 
 - tax effect of non-underlying 
  other operating expenses            (23)   (33)     (52) 
 
                                      (23)    341     (52) 
                                     =====  =====  ======= 
 
 

During the year ended 31 March 2018, the Group rationalised operations at the Scunthorpe foundry given the reduced levels of turnover. Reorganisation costs, including redundancy and recruitment, relate to this rationalisation.

   8              Net debt 
 
                                           Unaudited       Unaudited 
                                          six months      six months     Year ended 
                                               ended           ended       31 March 
                                        30 September    30 September           2018 
                                                2018            2017 
                                              GBP000          GBP000         GBP000 
 Financial liabilities 
 Bank overdraft                                  306             414            485 
 Current instalments due on finance 
  leases                                         841             586            627 
 Current instalments due on asset 
  finance loans                                  600             100              - 
 Import loan facility                              -             356          1,137 
 Invoice finance liability                     6,867           4,790          4,740 
                                      --------------  --------------  ------------- 
 Financial liabilities due in 
  less than one year                           8,614           6,246          6,989 
                                      --------------  --------------  ------------- 
 
 Instalments due on finance leases 
  in greater than one year                     1,855           1,972          1,889 
 Total financial liabilities                   1,855           1,972          1,889 
                                      --------------  --------------  ------------- 
 
 Net debt                                     10,469           8,218          8,878 
                                      ==============  ==============  ============= 
 
 
 
   9              Interim report 

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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