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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Haynes Publishing Group Plc | LSE:HYNS | London | Ordinary Share | GB0004160833 | ORD 20P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 685.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMHYNS
RNS Number : 7496B
Haynes Publishing Group PLC
24 September 2018
Haynes Publishing Group P.L.C. ("the Company")
Annual Financial Report
Annual Report and Notice of Annual General Meeting
The Company has posted its Annual Report and Accounts 2018 and Notice of Annual General Meeting 2018 to shareholders.
The Company announces that in compliance with Listing Rule 9.6.1, copies of the following documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/nsm.
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i) Annual Report and Accounts 2018
ii) Notice of Annual General Meeting 2018
iii) Form of proxy for Ordinary Shareholders for the Annual General
Meeting
The Annual Report and Accounts, which were approved by the Board of Directors on 19 September 2018, constitute the Annual Financial Report for the purposes of DTR 4.1.
The Company's Annual General Meeting will be held at 1:00pm on Thursday 8 November 2018 at the Haynes International Motor Museum, Sparkford, near Yeovil, Somerset.
Both the Annual Report and Accounts 2018 and Notice of Annual General Meeting 2018 are also available to view on the Company's website www.haynes.com/investor.
In compliance with DTR 6.3.5, the following information is extracted from the Annual Report and Accounts 2018 and should be read in conjunction with the Company's Results Announcement issued on 5 September 2018, both of which can be found at www.haynes.com/investor. Together, these documents constitute the information required by DTR 6.3.5 to be communicated to the media in full unedited text through a Regulatory Information Service. This information is not a substitute for reading the Annual Report and Accounts 2018 in full and page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the Annual Report and Accounts 2018.
Principal risks and uncertainties
The following is an extract from the Strategic Report on pages 22-23 of the Annual Report and Accounts 2018:
"The Board has the primary responsibility for identifying the major business risks facing the Group and developing appropriate policies to manage those risks. These policies are used both by the directors and by senior management to determine the key control procedures for each area of risk identified by the Board and the degree of information required to safeguard the business and the assets used within it.
It is accepted that risk is itself prevalent in any commercial enterprise and in common with most businesses there are risks inherent in the Group's underlying operations which could impact on the Group's operating and financial performance. Thus, the reporting systems can only provide reasonable and not absolute assurance against damage or loss resulting from business activities. Nevertheless, it is the objective of the Board and Group staff to be prudent in the acceptance and control of a risk incurring activity rather than aiming to eliminate it entirely. Through its day to day management disciplines and monitoring of systems, the Group evaluates and mitigates unnecessary risks.
The table overleaf highlights the principal risks and uncertainties which the Board believes are presently most relevant to the Haynes Group. Wider scope risks such as macroeconomic conditions which impact all business but over which the Group has little or no control have not been included.
Brexit
The risks relating to Britain's exit of the European Union ("EU") are not considered Principal Risks to Haynes. Shortly after the vote to leave management considered an internal impact assessment that had been undertaken. The Group is exposed to fluctuations in the value of sterling, in particular:
i) A proportion of sales are made outside the UK and are invoiced by the local businesses in euro's and US dollars; and
ii) The contract for the Group's external production is in US dollars.
In relation to the first of the exposures, the risk is primarily translational and does not affect the underlying operating efficiency or performance of the local businesses.
In relation to the second of the exposures, the Group has some natural hedging which helps to offset the impact of the transactional exposure such that the overall impact for the Group is not expected to be material."
Risk Why the Board How the Board mitigate the risk
think this
is important
------------------------ ------------------------- ---------------------------------------------------------------------
A failure in The business IT representation on the Board
the Group's is dependent through the Chief Technology Officer
information on its (CTO). The recruitment of technically
technology information competent staff and the appropriate
systems technology level of investment in the Group's
prevents the systems to information technology infrastructure.
business run its Increasing use of the Cloud, monitoring
from day-to-day security risks, up-to-date anti-virus
functioning operations software, maintaining adequate
and/or and in the back-up procedures and regular
fulfilling case of its testing and control reviews of
its digital the systems are key components
contractual delivery of minimising the risk of system
duties. platforms to downtime.
deliver
the technical
information
to its end
users.
Lack of In all our The Board ensures that the level
investment key markets of ongoing investment on product
in the core it is vital development is appropriate to maintain
products and that our the Group's reputation and to retain
in content, its market leading positions in
developing coverage and its respective market sectors.
new product platforms are
initiatives. kept
up-to-date
and relevant.
The The Haynes Through the process driven methodology
publication brand is the Group adopts to capture its
of built technical data; the skill and expertise
inaccurate on a of the staff and the level of quality
information. reputation of control applied throughout the
publishing process, the Group takes the necessary
technically steps to minimise this risk. As
accurate a responsible business the Group
information has appropriate global insurance
in a trusted to cover product indemnity and
and easy to multimedia liability.
understand
format.
Reducing DIY Revenue The Board seek to mitigate this
activity on derived from risk by :
cars & the sale of * Broadening the Group's revenue generating base.
motorcycles printed
in the service
Group's and repair * By opening up new geographic sales territories.
geographic manuals is
markets. down 5% from
2017. * By developing new delivery platforms to deliver the
Group's content through a variety of multi-media
formats.
Regulatory Changes to The Group actively monitor planned
risk regulations and actual changes to regulations
from changes around the in all territories in order to
affecting provision minimise disruption to the business.
the of technical Key senior personnel are appointed
Group's data could to Associations and Bodies that
access necessitate regularly feedback on the drafting
to content changes to of future regulations in our key
or the territories.
the production
availability processes
of content. of the Group
or increase
competition
in the
market.
Judgemental Significant Regularly monitoring of Group policies
valuation of assets and adopted with consistent and evidence-based
assets and provisions in approach to assumptions. Where
provisions the balance valuations are undertaken internally
from sheet depend they are subject to external review
financial on as part of the audit process.
valuations. judgemental
assumptions
as explained
in Note 1 to
the financial
statements.
Intellectual Piracy of The Group have an ongoing Trademark
Property and content in filing and registration strategy
Copyright. both a print in place covering all Group marks
and digital in the appropriate classes and
format as territories. Bi-annual meetings
well as the are held with the external trademark
lapsing of advisors. Internally the Group
copyrights adopt robust anti-piracy policies
and on a territory and product basis
trademarks that is regularly reviewed to update
held, for changes in the market.
impacting the
financial
performance
of the Group.
An over The loss of a The Group aims to establish strong
reliance major and long-standing relationships
on a single customer with all its key customers. However,
key could the Board recognises that a customer
customer. significantly can be lost for a variety of reasons
impact and therefore, by broadening the
on the base of the business and developing
financial new delivery platforms, the reliance
performance on a single customer is reduced.
of the Group In the current financial year there
and hamper are no customers who represent
the Board's more than 10% of Group revenue.
objective
of delivering
sustainable
revenue and
profit
growth.
The loss of The Group has Through the setting of competitive
key key remuneration packages and fulfilling
executives executives employment conditions the Group
and and employees helps to mitigate the loss of a
personnel. who have senior Board executive or key employee.
worked in the In the case of Board executives,
business the responsibility for succession
for a number planning and the recruitment of
of years new Board executives is overseen
and who have by the Remuneration and Nomination
an in-depth Committee. During 2017/18 a new
knowledge of Long Term Incentive Plan (LTIP)
the Group, was established for executive and
its processes senior managers of the Group and
and its a new group wide bonus scheme implemented
culture. for all group employees.
The funding A need to The performance of both the US
position on significantly and UK pension schemes are monitored
the Group's increase on a regular basis by the Company,
two defined contributions the Trustees and the Scheme's professional
benefit into the advisers and the funding to the
schemes pension schemes reflects the ongoing investment
deteriorates schemes requirements of the Group.
requiring could
significant adversely
additional affect
funding. the Group's
ability to
invest in the
development
of new
delivery
platforms,
new product
initiatives
and to fund
both internal
and
acquisitive
growth.
------------------------ ------------------------- ---------------------------------------------------------------------
Risk management
The following is an extract from the Corporate Governance statement on page 35 of the Annual Report and Accounts 2018:
"The Board has the primary responsibility for identifying the major business risks facing the Group and developing appropriate policies to manage those risks. These policies are used both by the directors and by senior management to determine the key control procedures for each area of risk identified by the Board and the degree of information required to safeguard the business and the assets used within it.
It is accepted that risk is itself prevalent in any commercial enterprise and that it must be the objective of the Group's management and staff to be prudent in the acceptance and control of risk incurring activity, rather than aiming to eliminate it entirely. Thus the reporting systems can only provide reasonable and not absolute assurance against damage or loss resulting from business activities.
Through its day to day management disciplines, face to face meetings, regular written reports and monitoring systems, the Group evaluates and mitigates unnecessary risks.
In addition, there are a number of areas of the Group's business where it is necessary to accept a degree of risk in order to deliver revenue and profitability growth. The publication of automotive workshop manuals in both a print and online format and a range of titles covering non-automotive practical and DIY subject matters, including a range of light entertainment manuals styled on the iconic Haynes Manual, engenders commercial and publishing risk requiring close evaluation by editors and editorial committees with an in-depth knowledge of their subject and their markets.
For the financial year ended 31 May 2018, the Board is satisfied that there was in place an ongoing process for identifying, evaluating, and managing the significant risks faced by the Group as a whole. This process is formally structured by means of a written report which is presented annually by the Group Finance Director to the Board. In addition, through discussion with the heads of the various operating units, an update is provided to the Board by the Group Finance Director at the half year. Risks identified by this process are regularly reviewed by the Board and addressed jointly by the Group Chief Executive and directors drawing upon the skills of senior management as necessary. The Board monitors this process and is satisfied that, given the size of the Group, and the nature of its operations, this process is sufficient to meet its needs without unduly hampering entrepreneurial activity, and that (in accordance with the recommendation of the Audit Committee) a separate internal audit function is not required."
Statement of Directors' Responsibilities
The following is an extract from page 49 of the Annual Report and Accounts 2018:
"The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101
"Reduced Disclosure Framework", and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group and Parent Company for that period. In preparing the financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business.
The directors are also responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Parent Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.
The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' confirmations
The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's position and performance, business model and strategy."
Financial risk and treasury policy
The following is an extract from Note 21 on pages 83 to 84 of the Annual Report and Accounts 2018:
"The Group's principal financial instruments during the year comprised bank loans and overdrafts, cash and short-term deposits as well as other various items arising from its operations such as trade receivables and trade payables. The main purpose of these instruments is to finance the Group's working capital requirements as well as funding its capital expenditure programmes. From time to time the Group may enter into derivative transactions such as interest rate swaps or forward exchange contracts, the main purpose of such transactions is to manage the interest rate and currency risks arising from the Group's operations and sources of finance. There were no such transactions entered into during the current or preceding financial years.
Foreign currency risk
The Group has investments in subsidiary operations outside of the UK and also buys and sells goods and services in currencies other than in the functional currencies of its subsidiary operations. In light of the above, the Group's non sterling revenues, profits, assets, liabilities and cash flows can be affected by movements in exchange rates. The Group is able to take advantage of certain natural hedge flows within the business operations which helps to minimise the impact of the fluctuations in exchange but where appropriate will use forward rates to minimise the risk. There were no forward exchange contracts entered into during the current or preceding financial years. It is Group policy not to engage in any speculative trading in financial instruments.
Sensitivity analysis
The most significant foreign currency risk to the Group is in relation to the euro and the US dollar. Management estimate that if all other variables remained constant the impact on pre-tax profits/(losses) of a 5% increase in the value of the euro and US dollar against sterling would have been to reduce profits by GBP0.2 million and GBP0.2 million respectively, with a decrease of 5% having an equal and opposite effect. The impact on net assets of a 5% increase in the value of the euro and US dollar against sterling would be GBP0.6 million and GBP0.6 million respectively, with a decrease of 5% having an equal and opposite effect. These estimates have been based on an assessment of translating the euro and US dollar profits into sterling using the average exchange rates for the year of EUR1.13 and $1.35 and closing rates of EUR1.14 and $1.33. Apart from balances held in the functional currency of the various Group trading entities, there were no other significant balances held by the trading companies in other currencies which would give rise to a significant foreign exchange exposure at the end of the financial year.
Credit risk
The Group's credit risk is primarily attributable to its trade receivables, which are spread over a range of countries and customers, a factor which helps to dilute the concentration of risk. The risk associated with such trading is mitigated through credit control management procedures including the use of credit worthiness checks, the application of credit limits and the sale of goods subject to retention of title clauses. The UK business outsources its distribution which includes customer invoicing, cash collection and credit control. The external distributor invoices the customers of the UK business as its agent but the UK business retains the full credit risk associated with the sales. In light of this arrangement the UK business has a secondary risk in relation to the cash collected from its customers which has yet to be remitted to the UK business by the external distributor. A provision is made against such balances where there is an identifiable loss or event, which based on prior experience provides management with a significant doubt over the recovery of the balance. Due to the long established relationships with the majority of the Group's customers and the good standing of the UK distributor which is part of a large multinational publishing group, there is not deemed to be a credit quality issue in relation to the trade receivables balance. The amount of the total exposure is shown in note 16.
In addition to the above, the UK business has an exposure in relation to contractual advanced royalty payments to authors. However, due to the large number of authors there is no significant concentration of risk. The asset balance in relation to the author advances is held within other debtors and prepayments (refer to note 16) and amounted to GBP0.1 million net of allowances for doubtful recovery (2017: GBP0.2 million).
The credit risk on liquid funds is limited as the funds are held at banks with high credit ratings assigned by international credit rating agencies.
Liquidity risk
The principal aim of the Group's liquidity management is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and asset leasing. As at 31 May 2018 the Group had a GBP5.0 million UK overdraft facility (2017: GBP5.0 million) which has no fixed renewal date and is due for review in December 2018, a EUR0.4 million overdraft facility in Europe (2017: EUR0.4 million) which has no fixed renewal date and a $1.0 million revolving loan facility in the US (2017: $1.0 million) which has $1.0 million undrawn as at 31 May 2018 and is due for renewal in October 2018.
Interest rate risk
From time to time the Group companies have overdraft and loan facilities which are subject to variable rates of interest based on the respective bank's base rate. As at 31 May 2018 there were bank overdrafts outstanding of GBP2.3 million (2017: GBP3.3 million). Money market deposits are placed for periods varying between call and one month and attract variable rates of interest based upon the banks cost of funds for the relevant currencies.
Sensitivity analysis
As all of the Group's borrowings are subject to variable interest rates the Group has an exposure to a change in the market rates of interest. Management have not undertaken a sensitivity analysis on the impact of movement in the bank base rate as they deem it would have an immaterial effect on Group results due to a combination of the low level of borrowing at the year end and the low current base rates in the UK and US.
Fair value of financial assets and liabilities
There are no material differences between the carrying values and the fair values of the financial assets and liabilities as recorded in the Consolidated Balance Sheet. Details of the amounts of financial assets and liabilities held in foreign currencies can be found in notes 16, 17, 18, 19 and 20 to the Consolidated Financial Statements.
Capital management
The primary aim of the Group's capital management is to safeguard the Group's ability to continue as a going concern, to support its businesses and to maximise shareholder value. The Group monitors its capital structure and makes adjustments as and when it is deemed necessary and appropriate to do so using such methods as adjusting the dividend payment to shareholders or the issuing of new shares.
Interest cover
2018 2017
Operating profit before exceptional items
(GBP000) 3,502 3,208
Net finance costs (GBP000) 46 55
Interest cover (ratio) 76 58
Interest cover is calculated by taking the operating profit before adjusting items from the Consolidated Income Statement divided by net finance costs (defined as finance costs less finance income), where finance income is greater than the finance costs, net finance costs is shown as GBPnil.
Net Gearing ratio
Restated(1)
2018 2017
Net debt (GBP000) - -
Total equity (GBP000) 24,987 20,732
Gearing ratio (%) - -
The net gearing ratio comprises net debt divided by total equity (net debt being defined as cash and cash equivalents net of bank loans - see notes 17 and 18)."
(1) See Note 1 - Restatement of prior years
Related party transactions
The following is an extract from Note 25 on page 93 of the Annual Report and Accounts 2018:
Identity of related parties
The Group has a related party relationship with its subsidiaries and with its directors. A list of all the Group's subsidiaries is shown in note 36.
Transactions with related parties
The interests of the directors in the ordinary share capital of the Company as at 31 May 2018 are shown in the Board Report on Remuneration on page 46 as required by the FCA's Disclosure Transparency rules.
During the year, the directors had declarable interests in contracts with the Company and its subsidiary undertakings as shown below.
1. A lease dated 28 August 1979 between John H Haynes Developments Inc, (a company registered in California and controlled by JH Haynes) and Haynes North America Inc. of the premises situated at 859 and 861 Lawrence Drive, Newbury Park, California which was amended on 1 May 2001, runs for a period of 5 years from that date. The tenancy on premises 859 Lawrence Drive is presently held over pending renewal and the annual rent for the Year ended 31 May 2018 was $103,607 (2017: $103,607) or GBP76,848 (2017: GBP81,260) at the average exchange rate for the year. The tenancy on premises 861 Lawrence Drive was terminated on 28 February 2017 and the amount paid to Haynes Developments for the Year ended 31 May 2018 was $nil (2017: $77,705) or GBPnil (2017: GBP60,952) at the average exchange rate for the year.
2. During the year, The Haynes Motor Museum Limited, (of which JH Haynes and Mrs AC Haynes are directors) which is jointly owned by the Haynes International Motor Museum Charitable Trust and JH Haynes and Mrs AC Haynes (spouse of JH Haynes), undertook the following transactions with the Group:
Balance Balance
at at
Transactions 31 May Transactions 31 May
2018 2018 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000
Supply of conference
facilities and garage
workshop services 4 - 5 -
Purchase of books and
manuals and storage
rental 10 1 13 1
JH Haynes is a Trustee of the Charitable Trust.
3. During the year, GBP500 (2017: GBP1,200) was paid to Haynes Developments Limited, of which JH Haynes and Mrs AC Haynes are directors, for rent and service charges relating to Fulton Mews in London. As at 31 May 2018, the balance outstanding to Haynes Developments Limited was GBPnil (2017: GBP240).
4. During the year, the Company engaged the services of New Century Media Limited to undertake financial PR on behalf of the Company. Mr E Bell is a non-executive director of New Century Media Limited. During the period the Company paid GBP85,502 (2017: GBP78,243) to New Century Media Limited for financial PR services. As at 31 May 2018 the balance outstanding to New Century Media Limited was GBP7,800 (2017: GBPnil).
Except as stated above, no directors were materially interested in contracts with the Company or any of its subsidiary undertakings.
Key management emoluments
The remuneration of the directors, who are the key management personnel of the Group is set out below in aggregate for each of the categories specified within IAS 24 'Related Party Disclosures'. Further information regarding the directors' individual remuneration packages is provided in the audited part of the Board Report on Remuneration on pages 39 to 48.
2018 2017
GBP'000 GBP'000
Short term employee benefits 1,847 1,214
Post employee benefits 320 47
------- -------
2,167 1,261
Employer's social security costs 142 127
------- -------
2,309 1,388
------- -------
Contact :
Haynes Publishing Group P.L.C. +44 1963 442009
Richard Barker
Group Company Secretary
Panmure Gordon +44 20 7886 2500
James Stearns
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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