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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Eurocell Plc | LSE:ECEL | London | Ordinary Share | GB00BVV2KN49 | ORD GBP0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 137.00 | 135.00 | 139.00 | 137.00 | 137.00 | 137.00 | 114,799 | 07:34:22 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Plastics Products, Nec | 364.5M | 9.6M | 0.0857 | 15.99 | 153.52M |
From Apr 2019 to Apr 2024
TIDMECEL
RNS Number : 8186M
Eurocell plc
02 August 2017
2 August 2017
EUROCELL PLC (Symbol: ECEL)
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2017
A good first half - gaining share in a flat RMI market
Eurocell plc is a market leading, vertically integrated UK manufacturer, distributor and recycler of innovative window, door and roofline PVC products
Hot Features
Premium
H1 2017 H1 Change
2016
------------------------------- -------- ------- -----------
Key financial performance
measures
Revenue (GBP million) 108.1 97.2 11%
Gross margin % 51.4% 52.1% (0.7%)
Adjusted EBITDA (GBP million)
(1) (4) 14.9 14.2 5%
Adjusted profit before
tax (GBP million) (2) 11.3 10.7 6%
Adjusted basic earnings
per share (pence) (3) 9.4 8.7 8%
Interim dividend per share
(pence) 3.0 2.8 7%
Net debt (GBP million)
(5) 20.8 31.3 (GBP10.5m)
Other statutory accounting
measures
Profit before tax (GBP
million) 10.8 10.3 5%
Basic earnings per share
(pence) 8.9 8.4 6%
------------------------------- -------- ------- -----------
Financial Highlights
-- Good sales growth of 9% (excluding acquisitions) -- Gross margin reduction reflects the impact of raw material price inflation
-- Robust cash flow and net debt performance, despite significant investment in business expansion
Operational Highlights
-- On track to open 30 new branches this year, with 15 new sites in H1 2017 -- Initiatives driving strong growth in private sector new build business -- Increased use of recycled material in manufactured products to 15% (H1 2016: 13%)
Mark Kelly, Chief Executive of Eurocell plc said:
"Eurocell has enjoyed a good first half, gaining share in a flat RMI market. We reported robust financial results, delivered another consistent operational performance and continued to invest in the growth of our business.
We are implementing selling price increases to mitigate raw material pricing pressure where possible, but the market does lag supplier price rises. We continue to manage underlying operating costs tightly, whilst progressing further our strategic priorities.
As a result, despite some signs of market hesitancy, our expectations for the full year remain unchanged. We believe that our proven strategy and capabilities will enable Eurocell to deliver value to our customers and shareholders throughout the remainder of 2017 and beyond."
NOTES FOR ANALYSTS AND EDITORS
Financial Review
-- Revenue growth of 9% (excluding acquisitions) includes: - Underlying(6) sales growth of 6%
o Profiles division organic sales growth of 6%
o Building Plastics division like for like(7) sales growth of 6%
- Sales from branches opened in 2016 and 2017 of GBP2.3 million -- Gross margin 51.4% (H1 2016: 52.1%)
- Raw material price pressure, including resin prices up 11% in 2017 (17% in the last 12 months)
- Larger fabricators growing strongly, taking a greater share of the available volume mix -- Operating costs include the impact of acquisitions and investment in new branches - Underlying(6) operating cost increase of 4% -- Tax rate on adjusted profit before tax of 17.2% includes the benefit of Patent Box(8) relief -- Capital investment of GBP3.6 million (H1 2016: GBP2.7 million) -- Interim dividend of 3.0 pence per share (H1 2016: 2.8 pence per share) up 7%
Business Review
-- Building customer prospect pipeline in the Profiles division - Moving a number of new trade fabricators on to Eurocell systems in H2 -- Increased sales of windows through branches to GBP3.8 million (H1 2016: GBP3.3 million)
- Implementing configuration software across the branch network, with common pricing and specifications
-- Warehouse operations back in-house from February 2017 to enhance customer service - Improved on-time in-full deliveries to 96% (full year 2016: 91%) -- Security Hardware acquired in February 2017 for consideration of GBP1.3 million - Supplier of locks, hardware and spares to the RMI market, with annual sales of GBP3 million - Developing the spares proposition for our branches
Notes:
(1) Adjusted EBITDA represents earnings before interest, tax, depreciation, amortisation and non-recurring costs.
(2) Adjusted profit before tax represents profit before tax and non-recurring costs. (3) Adjusted basic earnings per share excludes non-recurring costs and the related tax effect.
(4) Non-recurring costs for H1 2017 of GBP0.5 million comprise professional fees and earn out costs related to the acquisition of Security Hardware, as well as the redundancy and settlement costs of a staff reorganisation. Non-recurring costs for H1 2016 of GBP0.5 million comprise duplicated costs relating to the handover period during which the Company employed two CEO's, as well as professional fees related to the acquisition of Vista Panels.
(5) Net debt is cash and cash equivalents less bank overdrafts, other loans and borrowings.
(6) Underlying sales and operating costs exclude acquisitions and branches opened in 2016 and 2017.
(7) Like for like branch sales exclude branches opened in 2016 and 2017.
(8) An HMRC approved scheme, allowing a 10% tax rate on profits derived from products that incorporate patents.
Enquiries:
Eurocell plc Teneo Blue Rubicon
Mark Kelly, Chief Executive Ben Foster
Officer
+44 (0) 20 3603
+44 (0) 1773 842 105 5221
Michael Scott, Chief Financial Camilla Cunningham
Officer
+44 (0) 20 3757
+44 (0) 1773 842 140 9235
CHIEF EXECUTIVE'S REVIEW
I am pleased to report a good performance in the first half of the year. The RMI market has remained broadly flat, but we have continued to take share and delivered higher revenues and profits. Overall, sales were up 9% (excluding acquisitions) and adjusted EBITDA was up 5% and in line with our expectations. Further information on financial performance is provided in the Group Financial Review.
STRATEGIC PRIORITIES
As reported earlier this year, in January we conducted a full review of the Company's strategy and the fundamental elements of our markets and activities. At the conclusion of this process, we reaffirmed that our overall objective remains to deliver sustainable growth in shareholder value by increasing sales and profits at above market level growth rates.
We have five clear strategic priorities to help us achieve our overall objective:
-- Target growth in market share -- Expand the branch network -- Develop innovative new products -- Increase the use of recycled materials -- Explore potential bolt-on acquisition opportunities
We have made further progress with these priorities during H1, with the key aspects described below.
OPERATIONAL PERFORMANCE
Health and safety
The safety and well-being of our employees and contractors is our first operational priority. We continue to maintain good safety performance and recorded no major injuries in H1 2017 under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR).
We have however recently received notification from the Health and Safety Executive ('HSE') that they intend to prosecute the Company under the Health and Safety at Work Act, following a minor accident to an employee in August 2016. We are taking legal advice on the matter, with proceedings due to commence in August.
Production
We delivered another consistent production performance in H1 2017. Across our various sites we are working to standardise processes and share best practice wherever possible. This, together with judicious capital investment, on-going work on lean manufacturing techniques and continuous improvement driven by our Kaizen team, supports the delivery of on-going manufacturing efficiencies.
Warehouse logistics
We reported at our preliminary results in March that, following a period of outsourcing to DHL, the operation of our main warehouse facility was brought back in-house with effect from February 2017.
We have worked, with the full cooperation of DHL, to understand how the arrangements could be better structured to deliver a more efficient operation and improved customer service levels. We have made good progress, with on-time in-full deliveries increased to 96%, compared to 91% for full year 2016. Initiatives include shorter production run times and revised warehouse shift patterns, with picking and relationship teams assigned to specific key accounts.
Recycling
The project to expand the capacity of our recycling facility remains on track. Use of recycled materials in our primary extrusion manufacturing processes increased to 15% in the first half, compared to 13% in H1 2016.
Our efforts to secure increased supplies of in-feed stock for the recycling plant are proving successful, with collections up 26% so far this year, compared to H1 2016. These initiatives include back-hauling material from our fabricator, installer and branch networks. This is an important programme, which should support our objective to continue to increase our use of recycled materials.
PROFILES DIVISION REVIEW
H1 2017 H1 2016 Change
GBPm GBPm %
------------------------ ------- ------- ------
3rd party revenue 46.4 42.4 9
------------------------ ------- ------- ------
Organic 41.7 39.3 6
Vista Panels(1) 4.7 3.1 52
------------------------ ------- ------- ------
Inter-segmental revenue 21.8 18.9 15
------------------------ ------- ------- ------
Total revenue 68.2 61.3 11
------------------------ ------- ------- ------
Adjusted EBITDA 11.7 11.4 3
------------------------ ------- ------- ------
(1) Acquired March 2016
Profiles revenue
Profiles third party revenue was up 9% in H1 to GBP46.4 million (H1 2016: GBP42.4 million), which includes an organic sales increase of 6%. The remaining growth was driven by the acquisition of Vista Panels in March 2016.
We have continued to gain share, with the RMI market (the most significant external driver of our performance) remaining broadly flat during H1 2017.
Our larger trade fabricators are still growing strongly, taking a greater share of the available volume mix. Generally, the larger trade fabricators have been increasing their capacity, by extending or adding factory units and investing in new plant and machinery. As such, they are benefiting from economies of scale and automation, which is allowing them to grow share at the expense of smaller fabricators.
In addition, on a number of trade accounts we have become a second supplier, which delivers some limited volume growth but importantly serves to protect margin, by avoiding excessive selling price competition. We are building our customer prospect pipeline and will be moving a number of new trade fabricators on to Eurocell systems during H2.
We have also continued to see good growth in the private new build sector, where our specifications teams have been successful in generating demand, well supported by our ability to supply excellent products through the new build fabricator network.
Finally, Vista Panels (acquired in March 2016) continues to perform in line with our expectations, with 39% of door sales now channelled through our branch network (H1 2016: 36%).
Profiles adjusted EBITDA
Adjusted EBITDA in H1 2017 was GBP11.7 million (H1 2016: GBP11.4 million), an increase of 3%.
Gross margin and return on sales in the Profiles division are lower in H1 2017, largely as a result of increasing raw material price pressure, particularly for resin. We are implementing selling price increases to mitigate this where possible, but the market does lag supplier price rises. In addition, margins have been impacted by a shift in sales mix towards larger fabricators at the expense of smaller customers as described above. The increase in adjusted EBITDA is therefore a function of sales growth.
BUILDING PLASTICS DIVISION REVIEW
H1 2017 H1 2016 Change
GBPm GBPm %
--------------------------- ------- ------- ------
3rd party revenue 61.8 54.8 13
--------------------------- ------- ------- ------
Organic 60.7 54.8 11
Security Hardware(1) 1.1 - n/a
--------------------------- ------- ------- ------
Inter-segmental revenue 0.3 0.3 -
--------------------------- ------- ------- ------
Total revenue 62.1 55.1 13
--------------------------- ------- ------- ------
Adjusted EBITDA 3.2 2.7 19
--------------------------- ------- ------- ------
(1) Acquired February 2017
Building Plastics revenue
Building Plastics revenue was up 13% to GBP61.8m (H1 2016: GBP54.8m), which includes an increase in like for like sales of 6%, as well as the impact of branch openings and the acquisition of Security Hardware.
Like for like sales includes growth from branches opened in 2015 and prior, as the more recent sites from that vintage begin to mature. Growth was bolstered by increased sales of windows through the branch network, which were GBP3.8 million in H1 2017, compared to GBP3.3 million last year. We are implementing configuration software across the network, using common pricing and specifications for windows supplied to all Eurocell branches. This is proving successful and we will develop the software to incorporate products such as Skypod and doors.
Like for like growth also includes some benefit from an initiative to improve our proposition as a one-stop shop for customers, via the roll-out of an additional 500 product lines in 2016. In addition, the acquisition of Vista Panels has supported growth in the sales of doors through the branches, which reached GBP3.1 million in H1 2017 (H1 2016: GBP2.6m).
In terms of new branches, we opened 15 in H1, compared to 7 in the first half of last year. We now have a total of 174 branches providing national coverage across the UK, which offers a significant competitive advantage, and remain on track to open a total of 30 new sites this year. Branches opened in 2016/17 added GBP2.3 million to sales in H1 2017.
Building Plastics adjusted EBITDA
Adjusted EBITDA for H1 2017 was GBP3.2 million (H1 2016: GBP2.7 million), an increase of 19%.
Gross margin and return on sales were both slightly improved during the first half compared to H1 2016. Although we continue to experience price pressure on raw materials and some traded goods, this has to date been substantially mitigated with a selling price increase implemented in April 2017. The increase in adjusted EBITDA is therefore driven largely by sales growth.
Higher overheads in Building Plastics includes important investment to accelerate the pace of expansion of our branch network described above. New branches are a key driver of future sales and profit growth, but they do create downward pressure on profitability in the short-term due to investment in central infrastructure and in our teams at new sites. However, we are making good progress with initiatives to support new branches reaching profitability sooner, which now include a more comprehensive and sustained marketing campaign.
Looking to the future, following trials in the first quarter, we have now rolled-out Peer Pricing across the full branch network. This is a mechanism which displays to branch staff at point of sale the average historic selling prices for products sold by their branch, region and nationally across the Eurocell Group. We expect Peer Pricing to support margin in the branches.
Security Hardware
The Building Plastics division also includes Security Hardware, acquired in February 2017 for consideration (net of cash acquired) of GBP1.3 million. Security Hardware is a supplier of locks and hardware, primarily to the RMI market, with annual sales of approximately GBP3 million.
Security Hardware stocks around 3,000 products, covering the major hardware brands and an own label offering. This extensive product range enables the business to supply a significant proportion of the replacement parts routinely required by the RMI market.
The acquisition means we can offer the full product range throughout our branch network, allowing Eurocell to better engage with facilities management companies and other large maintenance contractors. This forms another part of our objective to become a one-stop shop for anything window related for our customers. We also plan to develop a range of hardware to complement our window profile. This will enable our fabricator customers to offer a fully certified common specification of window (including hardware), allowing us to target a greater share of the new build market and grow sales of windows through the branches.
The business is performing in line with our expectations and the integration is on track, with inventory now available in every branch.
OUTLOOK
Eurocell has enjoyed a good first half, gaining share in a flat RMI market. We reported robust financial results, delivered another consistent operational performance and continued to invest in the growth of our business.
We are implementing selling price increases to mitigate raw material pricing pressure where possible, but the market does lag supplier price rises. We continue to manage underlying operating costs tightly, whilst progressing further our strategic priorities.
As a result, despite some signs of market hesitancy, our expectations for the full year remain unchanged.
We believe that our proven strategy and capabilities will enable Eurocell to deliver value to our customers and shareholders throughout the remainder of 2017 and beyond.
Mark Kelly
Chief Executive Officer
GROUP FINANCIAL REVIEW
Group H1 2017 GBP000 H1 2016 GBP000 ------------------------------------------ -------------- -------------- Revenue 108,129 97,220 Gross profit 55,607 50,661 Gross margin % 51.4% 52.1% Overheads (1) (40,667) (36,441) ------------------------------------------ -------------- -------------- Adjusted EBITDA 14,940 14,220 Depreciation and amortisation (3,312) (3,069) ------------------------------------------ -------------- -------------- Adjusted operating profit 11,628 11,151 Finance costs (282) (403) ------------------------------------------ -------------- -------------- Adjusted profit before tax 11,346 10,748 Tax on adjusted profit (1,949) (2,029)
------------------------------------------ -------------- -------------- Adjusted profit after tax 9,397 8,719 ------------------------------------------ -------------- -------------- Adjusted basic earnings per share (pence) 9.4 8.7 ------------------------------------------ -------------- -------------- Non-recurring costs (539) (455) Reported profit before tax 10,807 10,293 Reported basic earnings per share (pence) 8.9 8.4 ------------------------------------------ -------------- --------------
(1) Overheads represent distribution and administrative expenses excluding depreciation and amortisation.
REVENUE
Revenue for H1 2017 was GBP108.1 million (H1 2016: GBP97.2 million), which represents growth of 11%, or 9% excluding acquisitions. Underlying sales growth (i.e. excluding the impact of acquisitions and branches opened in 2016/17) was 6%.
As described in the Divisional Reviews, sales have been driven by strong like for like growth in the Building Plastics branch network (GBP3.5 million, or 6% for the division) and the positive impact from branches opened in 2016/17 (GBP2.3 million, or 4% for the division). We have also delivered good organic growth in Profiles (GBP2.4 million, or 6% for the division). Together, the acquisitions of Vista Panels and Security Hardware added GBP2.7 million to sales in H1 2017.
GROSS MARGIN
We have experienced increasing price pressure for raw materials and traded goods, with resin in particular up 11% so far this year and 17% over the last 12 months. In addition, margins have been impacted by the sales mix, with stronger growth in sales to larger fabricators relative to smaller customers.
As described in the Divisional Reviews, these factors have been mitigated by the implementation of selling price increases where possible, and the increased use of recycled materials in our primary extrusion operations.
Overall, this has resulted in a reduction in our gross margin from 52.1% in H1 2016 to 51.4% in H1 2017.
OVERHEADS
Overheads for the half year were GBP40.7 million compared to GBP36.4 million in H1 2016, representing a very similar percentage of sales for both periods. The increase includes GBP1.6 million as a result of new branches opened in 2016/17 and GBP1.4 million from acquisitions. The balance of GBP1.3 million relates to an increase of 4% in the underlying business, where sales growth was 6% as described above. We continue to focus on the tight control of underlying overheads, with the increase driven largely by the impact of the Minimum Wage legislation and higher volume related distribution costs.
DEPRECIATION AND AMORTISATION
Depreciation and amortisation for H1 2017 is GBP3.3 million (H1 2016: GBP3.1 million), with the increase due to amortisation of acquired intangibles relating to the acquisitions of Vista and Security Hardware.
FINANCE COSTS
Finance costs for H1 2017 were GBP0.3 million (H1 2016: GBP0.4 million), reflecting lower average net debt in 2017.
ADJUSTED PROFIT MEASURES
Adjusted EBITDA, adjusted operating profit and adjusted profit before tax all exclude non-recurring costs (see below). Adjusted profit after tax and adjusted earnings per share exclude non-recurring costs and the related tax effect.
Adjusted profit measures are provided as additional guidance to statutory measures to help better describe the underlying performance of the Group.
NON-RECURRING COSTS
Non-recurring costs for H1 2017 of GBP0.5 million comprise professional fees and earn out costs related to the acquisition of Security Hardware, as well as the redundancy and settlement costs of a staff reorganisation. Non-recurring costs for H1 2016 of GBP0.5 million comprise duplicated costs relating to the handover period during which the Company employed two CEO's, as well as professional fees related to the acquisition of Vista Panels.
TAX
The effective tax rate on adjusted profit before tax for H1 2017 of 17.2% was lower than the standard corporation tax rate for this year due to the benefit of Patent Box relief. The effective rate on adjusted profit before tax for H1 2016 of 18.9% was close to the standard rate for that period. The effective tax rate on reported profit before tax for H1 2017 was 17.4% (H1 2016: 18.8%).
The full year tax rate for 2016 of 17.7% was lower than the standard rate due to the beneficial impact on deferred tax of future reductions in the corporation tax rate enacted in the period, as well as adjustments to prior year taxes.
EARNINGS PER SHARE
Taking into account all of the factors described above, adjusted basic earnings per share for the period was 9.4 pence (H1 2016: 8.7 pence). Reported basic earnings per share was 8.9 pence (H1 2016: 8.4 pence). The dilutive impact of outstanding share options is not significant.
ACQUISITIONS
As previously described, the Group acquired Security Hardware in February 2017 for an initial consideration of GBP1.3 million (net of cash acquired, see also Cash Flow below). The impact of Security Hardware on Group earnings for 2017 is not expected to be material.
DIVIDS
On 1 August 2017, the Board approved an interim dividend for the six months ended 30 June 2017 of 3.0 pence per share (GBP3.0 million), representing an increase of 7% on the corresponding period. This is in line with the policy set out at our IPO, to target initially a dividend of approximately 40% of adjusted earnings, with a progressive policy in future years, and with interim and final dividends in the approximate proportions of one-third and two-thirds.
The interim dividend will be paid on or before 6 October 2017 and shares will be marked ex-dividend on 8 September 2017.
CAPITAL EXPITURE
We continue to invest in our future, with capital expenditure for H1 2017 of GBP3.6 million (H1 2016: GBP2.7 million). Capital expenditure includes investment to increase our recycling capacity of GBP0.6 million and in new branches opened in H1 2017 of GBP1.0 million. Investment of GBP0.8 million in Operations includes new tooling costs and general maintenance capex. Other capital expenditure of GBP1.2 million includes branch refurbishments and various IT related costs.
CASH FLOW
Net cash generated from operating activities was GBP10.3 million for the period, compared to GBP9.7 million in H1 2016.
This includes a net outflow from working capital for H1 2017 of GBP1.8 million, comprised of an increase in stocks (GBP2.5 million), an increase in trade and other receivables (GBP5.8 million) and an increase in trade and other payables (GBP6.5 million). This compares to a net outflow from working capital of GBP3.3 million in H1 2016. It also includes tax paid of GBP2.6 million (H1 2016: GBP1.2 million).
The increase in stocks so far this year has been driven largely by the 15 new branches, as well as the introduction of new product lines to the branch network. However, stock days were 58 at 30 June 2017, compared to 67 at 30 June 2016 and 58 at 31 December 2016. The changes to trade receivables and payables reflect normal business seasonality, alongside increased activity and growth in 2017.
Other payments include acquisitions of GBP1.3 million (H1 2016: GBP6.3 million), capital investment of GBP3.6 million (H1 2016: GBP2.7 million) and financing costs of GBP0.3 million (H1 2016: GBP0.3 million).
Dividends paid in H1 2017 represent the final dividend for 2016 of 5.7 pence per share (or GBP5.7 million). (H1 2016: 2015 final dividend of GBP5.2 million)
Taking all of these factors into account, net debt increased by GBP0.5 million during the first half to GBP20.8 million at 30 June 2017 (31 December 2016: GBP20.3 million).
BANK FACILITIES
We have an unsecured, multicurrency, revolving credit facility of GBP45 million, provided by Barclays and Santander. The Group operates comfortably within the terms of the facility and related financial covenants. The facility matures in 2020.
SEASONALITY OF TRADING
The Group is affected by seasonality. Demand in the second half of the year is usually higher than in the first half, with September to November typically representing our peak sales period. In addition, the new build markets are typically slow during the first quarter of the year.
PRINCIPAL RISKS AND UNCERTAINITIES
The principal risks and uncertainties faced by the Group are set out in the 2016 Annual Report (pages 36-39). These risks remain unchanged and are as follows:
-- Macro-economic conditions -- EU Referendum -- Raw material prices -- Raw material supply -- Unplanned plant downtime -- Corporate and regulatory risks -- Unsuccessful branch openings -- Customer credit risks -- Failure to develop new products -- Ability to attract and retain key personnel and highly skilled individuals -- Cyber security -- Failure to identify, complete and integrate bolt-on acquisitions
Michael Scott
Chief Financial Officer
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR REPORT
We confirm that to the best of the Directors' knowledge:
-- The condensed set of financial statements has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' (IAS 34) as adopted by the EU and;
-- 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 their impact on the condensed set of financial statements; 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.
By Order of the Board
Mark Kelly Michael Scott
Chief Executive Officer Chief Financial Officer
1 August 2017 1 August 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ending 30 June 2017
6 months ended 30 6 months ended 30 June Year ended 31 December
June 2017 2016 2016
Recurring Non-recurring Total Recurring Non-recurring Total Recurring Non-recurring Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Note (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited) (Audited)
---------------- ----- ------------ -------------- ------------ ------------ -------------- ------------ ----------- -------------- ----------
Revenue 5 108,129 - 108,129 97,220 - 97,220 204,816 - 204,816
Cost of sales (52,522) - (52,522) (46,559) - (46,559) (98,251) - (98,251)
Gross profit 55,607 - 55,607 50,661 - 50,661 106,565 - 106,565
Distribution
costs (8,158) - (8,158) (7,145) - (7,145) (15,517) - (15,517)
Administrative
expenses (35,821) (539) (36,360) (32,365) (455) (32,820) (66,096) (455) (66,551)
Operating
profit 11,628 (539) 11,089 11,151 (455) 10,696 24,952 (455) 24,497
Finance expense (282) - (282) (403) - (403) (677) - (677)
Profit before
tax 11,346 (539) 10,807 10,748 (455) 10,293 24,275 (455) 23,820
Taxation 7 (1,949) 66 (1,883) (2,029) 89 (1,940) (4,299) 81 (4,218)
Profit for
the period 9,397 (473) 8,924 8,719 (366) 8,353 19,976 (374) 19,602
---------------- ----- ------------ -------------- ------------ ------------ -------------- ------------ ----------- -------------- ----------
Basic earnings
per share
(pence) 9 9.4 8.9 8.7 8.4 20.0 19.6
---------------- ----- ------------ -------------- ------------ ------------ -------------- ------------ ----------- -------------- ----------
The group has no other comprehensive income in the current or prior year.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Note (Unaudited) (Unaudited) (Audited)
------------------------------- ----- ------------ ------------ ------------
Assets
Non-current assets
Property, plant and
equipment 11 29,876 27,713 29,294
Intangible assets 11 20,151 20,119 19,713
Total non-current assets 50,027 47,832 49,007
------------------------------- ----- ------------ ------------ ------------
Current assets
Inventories 20,846 18,886 17,404
Trade and other receivables 34,267 31,255 28,123
Cash and cash equivalents 4,993 2,580 5,559
Total current assets 60,106 52,721 51,086
------------------------------- ----- ------------ ------------ ------------
Total assets 110,133 100,553 100,093
------------------------------- ----- ------------ ------------ ------------
Liabilities
Current liabilities
Bank overdrafts and
other loans (18) (53) (42)
Trade and other payables (36,478) (29,964) (29,042)
Provisions (48) (48) (48)
Corporation tax (2,185) (1,980) (2,873)
Total current liabilities (38,729) (32,045) (32,005)
------------------------------- ----- ------------ ------------ ------------
Non-current liabilities
Borrowings (25,818) (33,832) (25,785)
Trade and other payables (350) (355) (520)
Provisions (1,351) (1,442) (1,463)
Deferred tax (2,182) (3,020) (2,194)
Total non-current liabilities (29,701) (38,649) (29,962)
------------------------------- ----- ------------ ------------ ------------
Total liabilities (68,430) (70,694) (61,967)
------------------------------- ----- ------------ ------------ ------------
Net assets 41,703 29,859 38,126
------------------------------- ----- ------------ ------------ ------------
Equity attributable
to equity holders of
the parent
Share capital 100 100 100
Share premium 1,926 1,926 1,926
Other reserves 701 530 348
Retained earnings 38,976 27,303 35,752
Total equity 41,703 29,859 38,126
------------------------------- ----- ------------ ------------ ------------
CONSOLIDATED CASH FLOW STATEMENT
For the six months ending 30 June 2017
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Note (Unaudited) (Unaudited) (Audited)
-------------------------------- ----- ------------ ------------ ------------
Cash generated from operations 12 12,677 10,711 31,782
Non-recurring costs 6 539 455 455
Cash generated from underlying
operations 13,216 11,166 32,237
Income taxes paid (2,610) (1,158) (3,537)
Non-recurring costs paid (332) (273) (273)
Net cash generated from
operating activities 10,274 9,735 28,427
Investing activities
Acquisition of subsidiary,
net of cash acquired 10 (1,260) (6,332) (6,332)
Purchase of property,
plant and equipment 11 (3,046) (2,129) (6,342)
Purchase of intangible
assets 11 (535) (567) (877)
Net cash used in investing
activities (4,841) (9,028) (13,551)
Financing activities
Proceeds from bank borrowings - 8,000 8,000
Repayment of bank borrowings (24) (485) (8,523)
Finance costs paid (275) (291) (643)
Dividends paid to equity
shareholders 8 (5,700) (5,200) (8,000)
Net cash (used in)/generated
from financing activities (5,999) 2,024 (9,166)
Net (decrease)/increase
in cash and cash equivalents (566) 2,731 5,710
-------------------------------- ----- ------------ ------------ ------------
Cash and cash equivalents
at the beginning of the
period 5,559 (151) (151)
-------------------------------- ----- ------------ ------------ ------------
Cash and cash equivalents
at the end of the period 4,993 2,580 5,559
-------------------------------- ----- ------------ ------------ ------------
Net debt
Cash and cash equivalents 4,993 2,580 5,559
Bank overdrafts and other
loans (18) (53) (42)
Bank loans (25,818) (33,832) (25,785)
(20,843) (31,305) (20,268)
-------------------------------- ----- ------------ ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months ended Share Share Retained Other Total
30 June 2017 (Unaudited) capital premium earnings reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- --------- --------- ---------- ---------- --------
Balance at 1 January
2017 100 1,926 35,752 348 38,126
Comprehensive income
for the period
Profit for the period - - 8,924 - 8,924
Total comprehensive
income for the period - - 8,924 - 8,924
Contributions by and
distributions to owners
Share based payments - - - 289 289
Deferred tax on share
based payments - - - 64 64
Dividends paid (note
8) - - (5,700) - (5,700)
Total contributions
by and distributions
to owners - - (5,700) 353 (5,347)
Balance at 30 June
2017 100 1,926 38,976 701 41,703
--------------------------- --------- --------- ---------- ---------- --------
For the 6 months ended Share Share Retained Other Total
30 June 2016 (Unaudited) capital premium earnings reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- --------- --------- ---------- ---------- --------
Balance at 1 January
2016 100 1,926 24,150 380 26,556
Comprehensive income
for the period
Profit for the period - - 8,353 - 8,353
Total comprehensive
income for the period - - 8,353 - 8,353
Contributions by and
distributions to owners
Share based payments - - - 127 127
Deferred tax on share
based payments - - - 23 23
Dividends paid (note
8) - - (5,200) - (5,200)
Total contributions
by and distributions
to owners - - (5,200) 150 (5,050)
Balance at 30 June
2016 100 1,926 27,303 530 29,859
--------------------------- --------- --------- ---------- ---------- --------
For the year ended Share Share Retained Other Total
31 December 2016 (Audited) capital premium earnings reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------------------- ---------------- ---------- ------------ ---------- ----------
Balance at 1 January
2016 100 1,926 24,150 380 26,556
Comprehensive income
for the year
Profit for the year - - 19,602 - 19,602
Total comprehensive
income for the year - - 19,602 - 19,602
Contributions by and
distributions to owners
Share based payments - - - 239 239
Release of share based
payments - - - (221) (221)
Deferred tax on share
based payments - - - (50) (50)
Dividends paid (note
8) - - (8,000) - (8,000)
Total contributions
by and distributions
to owners - - (8,000) (32) (8,032)
Balance at 31 December
2016 100 1,926 35,752 348 38,126
----------------------------------------- ---------------- ---------- ------------ ---------- ----------
1. BASIS OF PREPARATION
The half year report for the 6 months ended
30 June 2017 reflects the results of the Company
and its subsidiaries (together the 'Group').
It has been prepared in accordance with IAS
34 'Interim Financial Reporting' as adopted
by the European Union and the Disclosure and
Transparency rules of the Financial Conduct
Authority, and includes the half year condensed
consolidated financial statements (the 'interim
financial statements').
The interim financial statements do not constitute
statutory accounts as defined in Section 434
of the Companies Act 2006. They do not include
all the information required for full financial
statements and should be read in conjunction
with the 2016 Annual Report.
The comparative figures for the year ended
31 December 2016 have been extracted from the
Group's audited financial statements for that
year. Those financial statements are included
in the 2016 Annual Report and have been delivered
to the Registrar of Companies. The auditor's
report was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying
their audit report, and (iii) did not contain
a statement under Section 498 (2) or (3) of
the Companies Act 2006.
The interim financial statements are unaudited,
but have been reviewed by the auditors in accordance
with the Auditing Practices Board guidance
on Review of Interim Financial Information.
The half year report was approved by the Board
of Directors on 1 August 2017.
2. GOING CONCERN
The interim financial statements have been
prepared on a going concern basis. The Directors
are satisfied that the Group has adequate resources
to continue in operation for the foreseeable
future; a period of not less than 12 months
from the date of this report.
3. ACCOUNTING POLICIES AND ESTIMATES
The interim financial statements have been
prepared applying the accounting policies and
presentation that were applied in the preparation
of Group's audited financial statements for
the year ended 31 December 2016. Adoption of
new standards, amendments or interpretations
to published standards since that date have
had no material impact on the interim financial
statements.
IFRS 15 'Revenue from Contracts with Customers'
becomes effective from 1 January 2018. Management
expects to complete its analysis of the expected
impact on revenue recognition by the end of
2017. IFRS 16 'Leases' becomes effective from
1 January 2019. Management has yet to assess
the impact of IFRS 16. However, with a significant
number of operating leases, the implementation
of IFRS 16 is likely to have a material impact
on the Group's balance sheet.
The preparation of the interim financial statements
requires management to make judgements, estimates
and assumptions that affect the application
of accounting policies and the reported amounts
of assets and liabilities, income and expenses.
The significant judgements, estimates and assumptions
relevant to the preparation of the interim
financial statements are consistent with those
described on pages 77 to 81 of the 2016 Annual
Report.
4. FINANCIAL INSTRUMENTS
The Group is exposed to financial risks through
its use of the following financial instruments:
* Trade and other receivables
* Cash and cash equivalents
* Bank overdrafts
* Borrowings
* Trade and other payables
The relevant financial risks are: credit risk,
market risk, foreign exchange risk and liquidity
risk.
The Group estimates that the fair value of
these financial assets and liabilities is approximate
to their carrying amount. Further information
in relation to the Group's exposure to financial
risks is included on pages 81 to 83 of the
2016 Annual Report.
5. SEGMENT INFORMATION
The Group has the following reportable segments:
Profiles, Building Plastics and Corporate.
The Profiles division manufactures extruded
rigid and foam PVC profiles. Rigid PVC profiles
are sold to third party fabricators, who produce
windows, trims, cavity closer systems, patio
doors and conservatories for installers, retail
outlets and house builders. Foam products are
used for roofline (e.g. fascias and soffits)
and are supplied to customers through the nationwide
branch network in the Building Plastics division.
The Profiles division also includes S&S Plastics
and Vista; businesses acquired in 2015 and
2016 respectively.
Building Plastics distributes a range of Eurocell
manufactured and branded PVC foam roofline
products and Vista doors, as well as third
party manufactured ancillary products. These
include windows manufactured by the Group's
fabricator customers using products manufactured
by Profiles, sealants, tools and rainwater
products. Distribution is through a network
of 174 branches to installers, small and independent
builders, house builders and nationwide maintenance
companies. The branches also sell roofline
products to independent wholesalers. The Building
Plastics division also includes Security Hardware;
acquired in February 2017.
6 months ended 30
June 2017
(Unaudited) Building
Profiles Plastics Corporate Total
GBP000 GBP000 GBP000 GBP000
---------------------------------- ---------------- ---------- ------------ ----------------------
Revenue
Total revenue 68,171 62,078 - 130,249
Inter-segmental
revenue (21,807) (313) - (22,120)
Total revenue from
external customers 46,364 61,765 - 108,129
----------------------------------------
Adjusted EBITDA 11,660 3,194 86 14,940
Amortisation (80) (56) (669) (805)
Depreciation (1,915) (364) (228) (2,507)
Operating profit/(loss)
before
non-recurring costs 9,665 2,774 (811) 11,628
---------------------------------------- ---------------- ---------- ------------ ----------------------
Non-recurring costs (539)
Finance expense (282)
Profit before tax 10,807
---------------------------------------- ---------------- ---------- ------------ ----------------------
6 months ended 30
June 2016
(Unaudited) Building
Profiles Plastics Corporate Total
GBP000 GBP000 GBP000 GBP000
---------------------------------- ---------------- ---------- ------------ ----------------------
Revenue
Total revenue 61,254 55,132 - 116,386
Inter-segmental
revenue (18,862) (304) - (19,166)
Total revenue from
external customers 42,392 54,828 - 97,220
----------------------------------------
Adjusted EBITDA 11,408 2,654 158 14,220
Amortisation (78) (67) (511) (656)
Depreciation (1,928) (282) (203) (2,413)
Operating profit/(loss)
before
non-recurring costs 9,402 2,305 (556) 11,151
---------------------------------------- ---------------- ---------- ------------ ----------------------
Non-recurring costs (455)
Finance expense (403)
Profit before tax 10,293
---------------------------------------- ---------------- ---------- ------------ ----------------------
Year ended 31 December Building
2016 (Audited) Profiles Plastics Corporate Total
GBP000 GBP000 GBP000 GBP000
---------------------------------- ---------------- ---------- ------------ ----------------------
Revenue
Total revenue 127,171 118,148 - 245,319
Inter-segmental
revenue (39,817) (686) - (40,503)
Total revenue from
external customers 87,354 117,462 - 204,816
----------------------------------------
Adjusted EBITDA 22,657 8,832 (160) 31,329
Amortisation (158) (123) (1,091) (1,372)
Depreciation (3,969) (609) (427) (5,005)
Operating profit/(loss)
before
non-recurring costs 18,530 8,100 (1,678) 24,952
---------------------------------------- ---------------- ---------- ------------ ----------------------
Non-recurring costs (455)
Finance expense (677)
Profit before tax 23,820
---------------------------------------- ---------------- ---------- ------------ ----------------------
6. NON-RECURRING COSTS
Amounts included in the consolidated statement
of comprehensive income are as follows:
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
--------------------------- ------------ ------------ ------------
Acquisition and earn
out costs (note 10) 194 112 112
Redundancy and settlement
costs 345 - -
Duplicated costs related
to CEO handover period - 343 343
539 455 455
-------------------------------- ------------ ------------ ------------
7. TAXATION
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
--------------------------- ------------ ------------ ------------
Current tax
Current tax on profits
for the period 1,998 2,021 5,025
Adjustments in respect
of prior years - (1) 75
Total current tax 1,998 2,020 5,100
-------------------------------- ------------ ------------ ------------
Deferred tax
Origination and reversal
of temporary differences (115) 214 (174)
Adjustment in respect
of change in rates - - (385)
Adjustments in respect
of prior years - (294) (323)
Total deferred tax (115) (80) (882)
-------------------------------- ------------ ------------ ------------
Tax expense in the
consolidated statement
of comprehensive income 1,883 1,940 4,218
-------------------------------- ------------ ------------ ------------
The reason for the difference between the
actual tax charge for the period and the standard
rate of corporation tax in the United Kingdom
applied to profits for the period are as follows:
Profit before tax 10,807 10,293 23,820
-------------------------------- ------------ ------------ ------------
Expected tax charge
based on the standard
rate of corporation
tax in the UK of 19.25%
(2016: 20.0%) 2,080 2,059 4,764
Expenses not deductible
for tax purposes 110 176 87
Adjustments in respect
of prior years - (295) (248)
Adjustments in respect
of change in rates - - (385)
Patent Box relief (307) - -
Total tax expense 1,883 1,940 4,218
-------------------------------- ------------ ------------ ------------
Changes in tax rates and factors affecting
the future tax charge
A reduction in the standard rate of UK corporation
tax from 20% to 19% took effect from April
2017. A further reduction to 17% from April
2020 was enacted during 2016.
8. DIVIDS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
-------------------------- ------------ ------------ ------------
Dividends paid during
the period
Interim dividend for
2016: 2.8p per share - - 2,800
Final dividend for
2016: 5.7p per share
(2015: 5.2p per share) 5,700 5,200 5,200
------------------------------- ------------ ------------ ------------
5,700 5,200 8,000
------------------------------- ------------ ------------ ------------
Dividends proposed
Interim dividend for
H1 2017: 3.0p per share
(H1 2016: 2.8p per
share) 3,000 2,800 2,800
Final dividend for
2016: 5.7p per share - - 5,700
------------------------------- ------------ ------------ ------------
3,000 2,800 8,500
------------------------------- ------------ ------------ ------------
9. EARNINGS PER SHARE
Basic earnings per share is calculated by
dividing the net profit for the period attributable
to ordinary shareholders by the weighted number
of ordinary shares outstanding during the
period. Diluted earnings per share is calculated
by adjusting the earnings and number of shares
for the effects of dilutive options. Adjusted
earnings per share excludes non-recurring
costs and the related tax effect from the
calculations.
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
------------------------------ ------------ ------------ ------------
Profit attributable
to ordinary shareholders 8,924 8,353 19,602
Adjusted profit attributable
to ordinary shareholders 9,397 8,719 19,976
----------------------------------- ------------ ------------ ------------
Number Number Number
------------------------------ ------------ ------------ ------------
Weighted average number
of shares- basic 100,000,000 100,000,000 100,000,000
Weighted average number
of shares- diluted 100,412,105 100,000,000 100,227,068
----------------------------------- ------------ ------------ ------------
Pence Pence Pence
------------------------------ ------------ ------------ ------------
Basic earnings per
share 8.9 8.4 19.6
Adjusted basic earnings
per share 9.4 8.7 20.0
Diluted earnings per
share 8.9 8.4 19.6
Adjusted diluted earnings
per share 9.4 8.7 19.9
----------------------------------- ------------ ------------ ------------
10. ACQUISITION OF SUBSIDIARIES (Unaudited)
On 24 February 2017, the Group completed the
acquisition of Security Hardware Limited,
a supplier of locks and hardware primarily
to the RMI market, with annual sales of approximately
GBP3 million. Consideration paid was GBP1.5
million (or GBP1.3 million net of cash acquired).
Goodwill represents potential synergies arising
from the enlarged group. The amount of goodwill
deductible for tax purposes is GBPnil. Goodwill
has been calculated as follows:
Provisional
Book value Fair value values
on acquisition adjustment on acquisition
GBP000 GBP000 GBP000
----------------------------- ---------------- ------------ ----------------
Intangible assets 20 466 486
Property, plant and
equipment 43 - 43
Inventories 748 153 901
Trade and other receivables 297 - 297
Cash and cash equivalents 226 - 226
Trade and other payables (501) (97) (598)
Deferred tax (8) (83) (91)
Identifiable assets
and liabilities 825 439 1,264
----------------------------------- ---------------- ------------ ----------------
Cash consideration
paid 1,486
Goodwill on acquisition 222
Fair value adjustments
-- The adjustment to intangible assets is to recognise
intangible assets in respect of customer
relationships, and has been valued using discounted
cash flows.
-- The adjustment to inventories is to reflect the fair
value of finished goods acquired.
-- The adjustment to trade and other payables is to
recognise a dilapidation provision in respect of the
leased premises occupied by Security Hardware.
-- The adjustment to deferred taxation is to recognise
the associated deferred tax liability arising on the
intangible assets.
Subsequent payments
Under the terms of the acquisition agreement,
the former shareholders of Security Hardware
are entitled to further cash consideration
based on financial performance for the year
ended 31 December 2017 (the 'earn out'). The
Directors estimate the total earn out payable
will be in the region of GBP0.2 million, which
will be recognised as a non-recurring expense
in the 2017 consolidated statement of comprehensive
income. An amount of GBP0.1 million has therefore
been included within the non-recurring charge
for H1. The earn out is payable in equal instalments
over a three-year period.
Acquisition related costs
The Group incurred acquisition related costs
of GBP0.1 million in relation to professional
fees and transaction costs arising upon acquisition.
These costs have been expensed to the consolidated
statement of comprehensive income, also as
a non-recurring item.
The contribution of Security Hardware to the
profits of the Group for the period since
acquisition is not material.
11. NON-CURRENT ASSETS
(Unaudited)
Property,
plant and Intangible
equipment assets
GBP000 GBP000
------------------------------- ----------- -----------
Balance at 1 January
2017 29,294 19,713
Additions 3,046 535
Additions on acquisition
(note 10) 43 486
Goodwill arising on
acquisition (note 10) - 222
Depreciation and amortisation (2,507) (805)
Balance at 30 June
2017 29,876 20,151
------------------------------------- ----------- -----------
12. RECONCILIATION OF PROFIT AFTER TAX TO CASH
GENERATED FROM OPERATIONS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
---------------------------- ------------ ------------ ------------
Profit after tax 8,924 8,353 19,602
Add back:
Taxation 1,883 1,940 4,218
Finance expense 282 403 677
Adjustments for:
Depreciation of property,
plant and equipment 2,507 2,413 5,005
Amortisation of intangible
assets 805 656 1,372
Loss on sale of property,
plant and equipment - 46 86
Share based payments 289 127 18
(Increase)/decrease
in inventories (2,541) 153 1,635
Increase in trade and
other receivables (5,821) (3,774) (616)
Increase/(decrease)
in trade and other
payables 6,461 346 (184)
(Decrease)/increase
in provisions (112) 48 (31)
Cash generated from
operations 12,677 10,711 31,782
---------------------------------- ------------ ------------ ------------
13. RELATED PARTY TRANSACTIONS
The remuneration of executive and non-executive
Directors and members of the Executive Committee
is disclosed in the 2016 Annual Report. Other
related party transactions are disclosed below.
Transactions with key management personnel
Kalverboer Management UK LLP is controlled
by P H L Kalverboer, a non-executive director
of Eurocell plc. Kalverboer Management UK
LLP has charged the following to the Group.
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
--------------------- ------------ ------------ ------------
Fees for management
services 20 20 40
The amount outstanding at the end of each
period in respect of the above fees was GBP10,000.
INDEPENDENT REVIEW REPORT TO EUROCELL PLC
REPORT ON THE HALF YEAR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Our conclusion
We have reviewed Eurocell plc's half year condensed consolidated financial statements (the "interim financial statements") in the half-year results of Eurocell plc for the 6 month period ended 30 June 2017. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the consolidated statement of financial position as at 30 June 2017; -- the consolidated statement of comprehensive income for the period then ended; -- the consolidated cash flow statement for the period then ended; -- the consolidated statement of changes in equity for the period then ended; and -- the explanatory notes to the interim financial statements.
The interim financial statements included in the half-year results have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The half-year results, including the interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-year results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the half-year results based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
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, 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.
We have read the other information contained in the half-year results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Birmingham
1 August 2017
a) The maintenance and integrity of the Eurocell plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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