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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 Apr 2019 to Apr 2024
TIDMHYNS
RNS Number : 8563C
Haynes Publishing Group PLC
25 January 2018
HAYNES PUBLISHING GROUP P.L.C.
INTERIM RESULTS FOR THE 6 MONTHSED
30 November 2017
Haynes Publishing Group P.L.C. ("Haynes" or "the Group"), creator and supplier of practical information and data solutions to drivers, enthusiasts and professional mechanics in print and digital formats, today announces its results for the 6 months ended 30 November 2017.
Business and Financial Highlights
Hot Features
Premium
26 weeks 26 weeks Change
to to YoY
30 Nov 30 Nov (Year-on-Year)
2017 2016
--------------------------- ---------- --------- ----------------
Group revenue GBP16.9m GBP14.0m +21%
--------------------------- ---------- --------- ----------------
Adjusted EBITDA (1) GBP5.3m GBP4.1m +29%
--------------------------- ---------- --------- ----------------
Adjusted operating profit
(1) GBP1.5m GBP0.8m +88%
--------------------------- ---------- --------- ----------------
Adjusted profit before
tax (1) GBP1.1m GBP0.5m +120%
--------------------------- ---------- --------- ----------------
Adjusted basic earnings
per share (1) 5.3p 2.1p +151%
--------------------------- ---------- --------- ----------------
Interim dividend 3.5p 3.5p -
--------------------------- ---------- --------- ----------------
Net cash/(debt) (2,3) (GBP0.3m) GBP0.6m (GBP0.9m)
--------------------------- ---------- --------- ----------------
Operating cash flow GBP6.0m GBP3.8m +58%
--------------------------- ---------- --------- ----------------
-- Highly synergistic acquisition of the E3 Technical business, a leading UK supplier of vehicle registration look-up and helpdesk services, for GBP4.72 million.
-- Like-for-like Group revenue, excluding acquisitions and exchange rate movements, up 8% to GBP15.2 million (2016: GBP14.0 million).
-- Adjusted EBITDA up 29% to GBP5.3 million (2016: GBP4.1 million) with GBP6.0 million (2016: GBP3.8 million) converted into operating cash flow, representing a conversion ratio of 113%.
-- Revenue from the Group's digital product ranges of GBP7.7 million (2016: GBP5.1 million), a YoY increase of 51%, now representing 46% of total Group revenue (2016: 36%).
-- UK & European revenue up 34% YoY; segmental operating profit before interest up 55% at GBP1.7 million (2016: GBP1.1 million).
-- North America & Australian revenue up 2% YoY; segmental operating profit before interest of GBP0.4 million (2016: loss of GBP0.2 million).
-- Like-for-like YoY increase in new product development excluding acquisitions of 2%. Total new product development up 24% at GBP4.1 million (2016: GBP3.3 million).
-- Practical lifestyle publishing programme strengthened following addition of worldwide publishing rights to the Bluffer's Guides.
-- Sale of US freehold property, post period end, for $5.4 million (GBP4.0 million).
Eddie Bell, Chairman of Haynes Group, commented:
"I am pleased to report that this is the third consecutive set of results where Haynes has demonstrated strong underlying revenue and profit growth since we implemented our global operational, cost and structure review in 2015/16.
"These interim results confirm that Haynes is making clear progress in its turnaround and is on its way to becoming an integrated multi-media content provider. Our UK and US operations have returned to profit during the first half of 2017/18, HaynesPro has once again delivered double digit growth in Europe and I am encouraged to see the contribution that our recent acquisitions, OATS and E3 Technical, have made to the Group. I would like to thank all of our staff for the commitment they have shown to growing our business."
"I am delighted to congratulate James Bunkum on his promotion to Chief Operating Officer and Jeremy Yates-Round on his promotion to Managing Director of Haynes Consumer. I welcome Peter van der Galiën and Richard Barker onto the Board. These new appointments will strengthen our board and our executive team and help to deliver long-term growth for the Haynes Group."
Notes to the Financial Highlights:
1. Adjusted to exclude GBP0.2 million of exceptional costs (2016: nil). Reported EBITDA of GBP5.1 million, reported operating profit of GBP1.3 million, reported profit before tax of GBP1.0 million and reported basic earnings per share of 4.3 pence.
2. Net cash defined as cash at bank net of overdrafts and loans.
3. The Company has 1.2 million ordinary shares held in treasury.
Enquiries :
Haynes Publishing Group P.L.C. +44 1963 442009
Eddie Bell, Chairman
J Haynes, Chief Executive Officer
Investor Contact: Panmure Gordon (UK) Limited +44 20 7886 2500
Karri Vuori
Erik Anderson
Media Contact: New Century Media +44 20 7930 8033
Richard Hill
Cautionary Statement :
This report contains certain forward-looking statements with regard to the financial condition and results of the operations of Haynes Publishing Group P.L.C. These statements and forecasts involve risk factors which are associated with, but are not exclusive to, the economic and business circumstances occurring from time to time in the countries and sectors in which the Group operates. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, Haynes Publishing Group P.L.C., has no obligation to update the forward-looking statements or to correct any inaccuracies therein.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
INTERIM STATEMENT
Business overview
Through a combination of restructuring, re-organising and investing in new content and delivery platforms, the Group has been placed on a stronger operational and financial foothold and is transitioning towards becoming an integrated content business.
46% of Group revenues are now digital and Haynes is committed to growing its data business in both its professional and consumer markets. In particular, recent acquisitions have added to the breadth of the Group's automotive repair and maintenance content. Following the acquisition of OATS in December 2016, Haynes now has lubricant data covering 98% of the European car market. Moreover, the acquisition of the E3 Technical business widens the Group's professional offering to include vehicle registration look-up and customer helpdesk services covering the UK automotive aftermarket adding to both the breadth and quality of our digital professional and consumer products.
The Group also continues to strengthen the range of its print titles and, in September 2017, we attained the worldwide print and digital publishing rights to the Bluffer's Guides, which will be re-launched in 2018 with a fresh look and new line-up.
Operational review
UK & Europe
In Europe, HaynesPro has experienced another strong six months of trading and, in September 2017, it successfully released the second phase of a major website and data overhaul for a major global automotive aftermarket parts supplier.
An important driver for HaynesPro's growth following the acquisition of OATS in December 2016 has been the expansion of the OATS lubricants data matching coverage. It was encouraging to see that, towards the end of the period, OATS won their first new global contract under Haynes ownership.
Meanwhile, in the UK, for the second year in a row, the Haynes Explains series has sold well in the run up to Christmas, with over 200,000 copies sold into retail since the beginning of September 2017. Haynes further secured another deal with Disney to publish the next four 'Star Wars' themed Haynes manuals. Since first publication, the Star Wars titles have sold over 250,000 copies internationally.
North America and Australia
Over the last six months, US management have been working with key retail customers on introducing new in-store programmes to improve the stock turn of print manuals. Alongside these programmes, and to coincide with the launch of the Haynes OnDemand platform in June 2017, management launched a range of sales and marketing initiatives to promote the growing range of consumer digital products.
In Australia, management recently implemented initiatives with retail partners to grow sales while addressing excess inventory and range availability issues. The outcome of these initiatives will become clearer by the end of the financial year.
Financial review
Overall Group revenue during the six-month period to 30 November 2017 increased by 21% to GBP16.9 million (2016: GBP14.0 million), boosted by a full period of revenue from the OATS acquisition in December 2016 and two months of trading from the newly acquired E3 Technical business which, in combination, contributed GBP1.6 million to Group revenue. The impact of foreign exchange rate movements increased half year revenues by GBP0.1 million. Like for like, excluding acquisitions and exchange rate movements, overall Group revenue increased by 8%.
In the UK and Europe, revenue was up 34% at GBP11.0 million (2016: GBP8.2 million) with like-for-like local currency revenue from HaynesPro up 15%. In the UK, revenue ended the period 8% ahead of last year with higher sales of practical lifestyle titles (up 24%) offsetting a softening in the sales of UK automotive print manuals which ended the period down 6%. The higher revenue in the UK and Europe has helped increase segmental operating profit before interest in the UK and European business by 55% to GBP1.7 million (2016: GBP1.1 million).
In North America and Australia local currency revenue ended the six-month period up 3% at $7.7 million (2016: $7.5 million). After translation to Sterling, the increase was 2%, yielding revenue for the period of GBP5.9 million (2016: GBP5.8 million). Segmental operating profit before interest in this part of the business returned to profit over the first half of the year ending the period at GBP0.4 million (2016: loss of GBP0.2 million). The improved performance was driven, in part, by a higher mix of US consumer digital revenue.
Overall Group gross profit increased by 24% to GBP10.2 million (2016: GBP8.2 million). The Group's gross margin increased by 1.6 percentage points to 60.2% (2016: 58.6%), helped by higher revenue from our higher margin professional operations in Europe.
Group overheads increased by 16% during the period to GBP8.7 million (2016: GBP7.5 million). This rise was largely due to the first-time inclusion of OATS, two months of overheads from the E3 acquisition, increased marketing and trade show costs and the costs of the new Senior Executive long-term incentive plan. Like-for-like excluding acquisitions and exchange, the increase in overheads was 6%.
Exceptional costs of GBP0.2 million were incurred during the period in relation to professional fees on the E3 acquisition.
Adjusted Group operating profit before tax and exceptional items was up 88% to GBP1.5 million (2016: GBP0.8 million).
Net finance costs ended the period in line with the prior year at GBP0.3 million (2016: GBP0.3 million).
Adjusted Group profit before tax before exceptional items ended the period up 120% at GBP1.1 million (2016: GBP0.5 million).
The Group's effective tax rate for the period was 32% (2016: 34%).
Adjusted earnings per share before exceptional items increased to 5.3 pence (2016: 2.1 pence).
Balance sheet and cash flow
Expenditure on product development grew during the six months to 30 November 2017 by 24% to GBP4.1 million (2016: GBP3.3 million), marking the fifth consecutive year of increased investment in the Group's platforms and product ranges.
The remaining US freehold property in Nashville was sold on 15 December 2017 for $5.35 million (GBP4.0 million), giving rise to an estimated profit on disposal of GBP2.6 million. As the sale did not occur until after 30 November 2017, it is not reflected in these interim results but will be included in the final year results to 31 May 2018.
The net IAS 19 pensions deficit on the Group's two defined benefit retirement schemes as at 30 November 2017 was 3% lower at GBP22.4 million (31 May 2017: GBP23.0 million). The combined assets of the schemes were GBP33.3 million (31 May 2017: GBP34.2 million) and the combined scheme liabilities were GBP55.7 million (31 May 2017: GBP57.2 million).
The net cash generated from operations before tax increased during the six-month period to GBP6.1 million (2016: GBP3.9 million).
The Group's net debt position on 30 November 2017 was GBP0.3 million (31 May 2017: net cash of GBP3.7 million) reflecting the acquisition of the E3 Technical business in September 2017 for GBP4.72 million financed through a combination of internal cash and an increase in the UK overdraft.
Interim dividend
Despite the encouraging results Haynes remains a company in turnaround, and given the content and platform investment requirements needed to grow the business, the Board feels it is appropriate to declare an unchanged interim dividend of 3.5 pence per share. The interim dividend will be paid on 11 April 2018 to shareholders on the register at the close of business on 16 March 2018 (with an ex-dividend date of 15 March 2018).
Group Auditors
In line with Board policy and good corporate governance, the services offered by the Group's auditors were competitively reviewed by the Audit Committee in November 2017. Following this review, PricewaterhouseCoopers LLP (PwC) were appointed as the new Haynes Group Auditors. On behalf of the Board, I would like to thank our outgoing auditors, BDO LLP for their services since they took office in 2003. I would also like to welcome PwC as our new Group auditors.
Board
I am pleased to announce that the following Board changes will take effect from 1 February 2018.
James Bunkum is promoted to Chief Operating Officer and will step down from his position as Chief Financial Officer.
Jeremy Yates-Round, currently Managing Director Consumer Publishing, will take on additional responsibility and oversee the commercial activities of the Group's consumer digital initiatives as Managing Director of Haynes Consumer.
Peter van der Galiën and Richard Barker will be appointed to the Board as Executive Directors.
Peter has been Managing Director of HaynesPro since 2016 and has played a key role in overseeing the growth in this part of the Group. Peter will now take on overall responsibility for the Group's professional operations.
Richard Barker will be promoted to the role of Group Finance Director. Richard is currently the Group's UK and European Finance Director. Richard will also retain his role as Group Company Secretary.
Future outlook
We are encouraged that in each part of our business, we are implementing new projects and initiatives to drive future revenue and profit growth.
We are committed to providing a broad range of practical content and solutions to end-users, whether drivers, hobbyists or professional mechanics. The re-positioning of Haynes requires significant investment in new products and platforms. We will continue to carefully manage our costs and cash flows during this turnaround to ensure we maintain focus on our end goal: the transition of the Group to being an integrated multi-media content and data solutions provider.
J Haynes
Chief Executive Officer
24 January 2018
Responsibility statement
Pages 22 and 23 of the Annual Report 2017 provide details of the serving Executive and Non-Executive Directors. A statement of the Directors' responsibilities is contained on page 45 of the Annual Report 2017. A copy of the Annual Report 2017 can be found on the Haynes website www.haynes.com/investor.
The Board confirms that to the best of its knowledge the condensed set of financial statements gives a true and fair view of the assets and liabilities, financial position and profit of the Group and has been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules as issued by the Financial Conduct Authority, namely:
-- DTR 4.2.7: 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 financial year.
-- DTR 4.2.8: Details of 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 enterprise during that period. Together with any changes in the related parties' transactions described in the last annual report that could have a material effect on the enterprise in the first six months of the current financial year.
INTERIM FINANCIAL STATEMENTS FOR THE 6 MONTHSED 30 NOVEMBER 2017
Consolidated Income Statement
Unaudited Unaudited Audited
6 months 6 months
to 30 Nov to 30
30 Nov 2017 Nov Year ended 31 May
30 Nov 2017 2017 2016 31 May 2017 31 May 2017 2017
Exceptional
Before Items Exceptional
Exceptional (note Total Before exceptional items
items 4) Total items (note 4) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Continuing
operations
Revenue (note
2) 16,882 - 16,882 14,032 29,774 - 29,774
Cost of sales (6,725) - (6,725) (5,812) (11,694) (1,282) (12,976)
----------- ---------
Gross profit 10,157 - 10,157 8,220 18,080 (1,282) 16,798
Other operating
income 5 - 5 15 31 - 31
Distribution
costs (4,292) - (4,292) (4,129) (8,039) (209) (8,248)
Administrative
expenses (4,417) (171) (4,588) (3,329) (6,864) (88) (6,952)
Gain on disposal
of property - - - - - 1,608 1,608
----------- ---------
Operating profit 1,453 (171) 1,282 777 3,208 29 3,237
Finance income 3 - 3 2 5 - 5
Finance costs (49) - (49) (30) (60) - (60)
Other finance
costs - retirement
benefits (270) - (270) (258) (518) - (518)
------------ ----------- --------- ---------
Profit before
taxation 1,137 (171) 966 491 2,635 29 2,664
Taxation (note
5) (340) 31 (309) (167) (1,211) (79) (1,290)
Profit for the
period 797 (140) 657 324 1,424 (50) 1,374
============ =========== ========= ========= ================== ============ ========
Earnings per
20p share - Pence
(note 6) Pence Pence Pence Pence
From continuing
operations
- Basic 5.3 4.3 2.1 9.4 9.1
- Diluted 5.2 4.3 2.1 9.4 9.1
------------ ----------- --------- ------------------ ------------ --------
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months
to to Year ended
30 Nov 30 Nov 31 May
2017 2016 2017
GBP000 GBP000 GBP000
Profit for the period 657 324 1,374
Other comprehensive income
Items that will not be reclassified
to profit or loss in subsequent
periods:
Actuarial gains/(losses) on
retirement benefit obligation
- UK Scheme 1,644 (4,233) (8,392)
- US Scheme (1,002) (1,464) 451
Deferred tax on retirement benefit
obligation
- UK Scheme (279) 720 1,427
- US Scheme 400 586 (180)
Deferred tax arising on change
in UK corporation tax rate - (143) (144)
763 (4,534) (6,838)
Items that will or maybe reclassified
to profit or loss in subsequent
periods:
Exchange differences on translation
of foreign operations (652) 3,864 3,678
Other comprehensive income/(expense)
recognised directly in equity 111 (670) (3,160)
Total comprehensive income/(expense)
for the financial period 768 (346) (1,786)
========= ========= ==========
Consolidated Balance Sheet
Unaudited Unaudited Audited
30 Nov 30 Nov 31 May
2017 2016 2017
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment
(note 11) 4,023 8,854 4,011
Intangible assets (note 12) 32,806 24,783 27,696
Deferred tax assets 7,630 9,086 7,669
Total non-current assets 44,459 42,723 39,376
Current assets
Inventories 3,511 4,908 3,965
Trade and other receivables 7,750 7,718 7,806
Tax recoverable - 1,228 130
Cash and short-term deposits 4,260 3,538 7,036
Total current assets 15,521 17,392 18,937
Assets held for sale (note
13) 1,416 - 1,483
Total assets 61,396 60,115 59,796
--------- --------- --------
Current liabilities
Trade and other payables (8,553) (5,283) (7,674)
Current tax liabilities (51) (364) -
Borrowings (4,570) (2,915) (3,331)
Provisions (885) (3,678) (1,164)
Total current liabilities (14,059) (12,240) (12,169)
Non-current liabilities
Deferred tax liabilities (3,335) (3,541) (3,287)
Retirement benefit obligation
(note 9) (22,364) (21,049) (23,024)
Total non-current liabilities (25,699) (24,590) (26,311)
Total liabilities (39,758) (36,830) (38,480)
--------- --------- --------
Net assets 21,638 23,285 21,316
========= ========= ========
Equity
Share capital 3,270 3,270 3,270
Share premium 638 638 638
Treasury shares (2,447) (2,447) (2,447)
Retained earnings 12,576 13,385 11,602
Foreign currency translation
reserve 7,601 8,439 8,253
--------- --------- --------
Total equity 21,638 23,285 21,316
========= ========= ========
Consolidated Statement of Changes in Equity
Foreign
currency
Share Share Treasury translation Retained
capital premium shares reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Unaudited
Current interim
period :
Balance at 1 June
2017 3,270 638 (2,447) 8,253 11,602 21,316
Profit for the period - - - - 657 657
Other comprehensive
income:
Currency translation
adjustments - - - (652) - (652)
Actuarial gains/(losses)
on defined benefit
plans (net of tax) - - - - 763 763
------- ------- -------- ----------- -------- -------
Total other comprehensive
income / (expense) - - - (652) 763 111
------- ------- -------- ----------- -------- -------
Total comprehensive
income / (expense) - - - (652) 1,420 768
Performance share
plan - - - - 158 158
Dividends (note
7) - - - - (604) (604)
------- ------- -------- ----------- -------- -------
Balance at 30 November
2017 3,270 638 (2,447) 7,601 12,576 21,638
-------------------------- ------- ------- -------- ----------- -------- -------
Unaudited
Prior interim period
:
Balance at 1 June
2016 3,270 638 (2,447) 4,575 18,199 24,235
Profit for the period - - - - 324 324
Other comprehensive
income:
Currency translation
adjustments - - - 3,864 - 3,864
Actuarial losses
on defined benefit
plans (net of tax) - - - - (4,534) (4,534)
------- ------- -------- ----------- -------- -------
Total other comprehensive
income / (expense) - - - 3,864 (4,534) (670)
------- ------- -------- ----------- -------- -------
Total comprehensive
income / (expense) - - - 3,864 (4,210) (346)
Dividends (note
7) - - - - (604) (604)
------- ------- -------- ----------- -------- -------
Balance at 30 November
2016 3,270 638 (2,447) 8,439 13,385 23,285
------- ------- -------- ----------- -------- -------
Audited
Prior year :
Balance at 1 June
2016 3,270 638 (2,447) 4,575 18,199 24,235
Profit for the period - - - - 1,374 1,374
Other comprehensive
income:
Currency translation
adjustments - - - 3,678 - 3,678
Actuarial gains/(losses)
on defined benefit
plans (net of tax) - - - - (6,838) (6,838)
------- ------- -------- ----------- -------- -------
Total other comprehensive
income / (expense) - - - 3,678 (6,838) (3,160)
------- ------- -------- ----------- -------- -------
Total comprehensive
income / (expense) - - - 3,678 (5,464) (1,786)
Dividends (note
7) - - - - (1,133) (1,133)
Balance at 31 May
2017 3,270 638 (2,447) 8,253 11,602 21,316 -------------------------- ------- ------- -------- ----------- -------- -------
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months
to to Year ended
30 Nov 30 Nov 31 May
2017 2016 2017
GBP000 GBP000 GBP000
Cash flows from operating activities
- continuing
Profit after tax 657 324 1,374
Adjusted for :
Income tax expense 309 167 1,290
Interest payable and similar
charges 49 30 60
Interest receivable (3) (2) (5)
Retirement benefit finance cost 270 258 518
--------- --------- ----------
Operating profit 1,282 777 3,237
Depreciation on property, plant
and equipment 258 363 782
Amortisation of intangible assets 3,620 2,983 6,421
Impairment of intangible assets - - 1,249
Performance share plan 158 - -
IAS 19 pensions current service
cost net of contributions paid (254) (179) (636)
Movement in provisions (234) (571) (2,492)
Loss/(gain) on disposal of property,
plant and equipment 2 68 (963)
--------- --------- ----------
4,832 3,441 7,598
Changes in working capital :
Decrease in inventories 338 262 1,111
(Increase)/decrease in receivables (49) 508 724
Increase/(decrease) in payables 947 (336) 285
---------
Net cash generated from operations 6,068 3,875 9,718
Tax (paid)/received (79) (111) 159
---------
Net cash generated by operating
activities 5,989 3,764 9,877
---------
Investing activities
Acquisition - business combinations (4,720) - (1,729)
Disposal proceeds on disposal
of property, plant and equipment - 214 4,329
Purchases of property, plant
and equipment (356) (164) (415)
Expenditure on development costs
included in intangible assets (4,100) (3,346) (7,922)
Interest received 3 2 5
---------
Net cash used in investing activities (9,173) (3,294) (5,732)
---------
Financing activities
Repayments of borrowings - (155) (177)
Dividends paid (604) (604) (1,133)
Interest paid (49) (30) (60)
Net cash used in financing activities (653) (789) (1,370)
Net (decrease)/increase in cash
and cash equivalents (3,837) (319) 2,775
Cash and cash equivalents at
beginning of period 3,705 540 540
Effect of foreign exchange rate
changes (178) 402 390
Cash and cash equivalents at
end of period (note 8) (310) 623 3,705
========= ========= ==========
Notes to the Interim Results
1. Accounting policies - Basis of preparation a) General information
The interim financial statements for the six months ended 30 November 2017 and 30 November 2016 and for the twelve months ended 31 May 2017 do not constitute statutory accounts for the purposes of Section 434 of the Companies Act 2006. The Annual Report and Financial Statements for the year ended 31 May 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 May 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. The 30 November 2017 statements were approved by the Board of Directors on 24 January 2018 and although not audited are subject to a review by the Group's auditors. These condensed interim financial statements have been reviewed, not audited.
The financial information has been prepared in accordance with the Disclosure and Transparency rules of the Financial Conduct Authority and in compliance with International Accounting Standard (IAS) 34 'Interim Financial Reporting (Revised)' as endorsed by the European Union.
b) Estimates and judgements
The preparation of 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 expense. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key source of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 May 2017, with the exception of changes in estimates that are required in determining the provision for income taxes.
These interim financial statements have been prepared on the going concern basis, as the directors have a reasonable expectation that the Group has adequate resources to continue to operate for a period of at least 12 months from the date of this report. In forming this view the directors have considered the Group's recent trading performance and its future outlook, its cash flow forecasts for the next 12 months and any known financial commitments.
c) New standards and interpretations
The interim financial statements have been prepared on a consistent basis with the accounting policies set out in the Annual Report 2017 and should be read in conjunction with that Annual Report. The Group's annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS's) and International Financial Reporting Interpretations Committee (IFRIC) pronouncements as adopted by the European Union and the Annual Report 2017 provides details of other new standards, amendments and interpretations which come into effect for the first time during the current financial year. The new standards, amendments to standards and interpretations which apply to the Group for the first time in this financial year have been reviewed by management who do not believe that the new standards, amendments to standards or interpretations will have a material impact on the Group's financial statements for the financial year ended 31 May 2018. Management are currently assessing the impact of the new standards, interpretations and amendments which are effective for accounting periods beginning on or after 1 January 2018 and which have not been adopted early, including the following:
- IFRS 15 Revenue from contracts with customers (with an effective date of 1 January 2018)
- IFRS 16 Leases (with an effective date of 1 January 2019)
- IFRS 9 Financial instruments (with an effective date of 1 January 2018)
2. Revenue
6 months to Year ended
30 Nov 30 Nov 31 May
2017 2016 2017
GBP000 GBP000 GBP000
Revenue by geographical destination
on continuing operations :
United Kingdom 4,259 2,989 6,873
Rest of Europe 6,285 5,047 10,527
United States of America 5,201 5,010 10,490
Australasia 870 773 1,322
Rest of World 267 213 562
------ ------ ----------
Total consolidated revenue
* 16,882 14,032 29,774
====== ====== ==========
* Analysed as follows :
Revenue from sales of printed
products 8,907 8,831 17,533
Revenue from sales of digital
data 7,742 5,089 11,853
Revenue from royalty and licensing
arrangements 233 112 388
16,882 14,032 29,774
====== ====== ==========
3. Segmental analysis
For management and internal reporting purposes, the Group is organised into two geographical operating segments as follows:
- UK and Europe - North America and Australia
The UK and European business with headquarters in Sparkford, Somerset has subsidiaries in the Netherlands, Italy, Spain, Romania, Germany and Sweden. Its core business is the publication and supply of automotive repair and technical information to the professional automotive and DIY aftermarkets in both a printed and digital format.
The North American and Australian business with headquarters near Los Angeles, California publishes DIY repair manuals for cars and motorcycles in both a printed and digital format. The business publishes titles under the Haynes, Chilton, Clymer and Intertec brands. The operation in Sydney, Australia publishes similar products under both the Haynes and Gregory's brands.
The above two operating segments are each organised and managed separately and are treated as distinct operating and reportable segments in line with the provisions of IFRS 8. The identification of the two operating segments is based on the reports reviewed by the chief operating decision maker, which form the basis for operational decision making. The segments reflect the geographical location and management of the operating units rather than the delivery channel through which the Group's content is delivered, as this is deemed to be more relevant for reporting purposes. Inter-segmental revenue is charged at the prevailing market rates in a manner similar to transactions with third parties.
The adjustments below have been made in the segmental tables which follow to reconcile the internal reports as reviewed by the chief operating decision maker to the financial information as reported under IFRS in the Group Financial Statements:
-- In the segmental reporting the excess of the consideration over net assets acquired on a business combination is shown as goodwill - under IAS 38 specific intangible assets are created and adjusted for deferred tax arising on acquisition.
-- The unallocated head office assets primarily relate to freehold property, deferred tax assets and amounts owed by subsidiary undertakings. The unallocated head office liabilities primarily relate to the deficit on the UK's multi-employer defined benefit pension scheme and tax liabilities.
3. Segmental analysis (continued)
Analysis of geographic operating segments
Revenue and results: UK North America
& Europe & Australia Consolidated
6 months 6 months 6 months
to to to
30 Nov 30 Nov 30 Nov
2017 2017 2017
GBP000 GBP000 GBP000
Segmental revenue
Total segmental revenue 11,109 5,965 17,074
Inter-segment revenue (92) (100) (192)
-------- ------------- ------------
Total external revenue 11,017 5,865 16,882
-------- ------------- ------------
Segment result
Segment operating profit
before interest 1,710 422 2,132
Interest receivable 2 1 3
Interest payable (38) - (38)
-------- -------------
Segment profit after and
interest 1,674 423 2,097
Unallocated head office
income less expenses (including
exceptional costs of GBP171,000) (1,131)
Consolidated profit before
tax 966
Taxation (309)
------------
Consolidated profit after
tax 657
============
UK & North America
Europe & Australia Eliminations Consolidated
30 Nov 30 Nov 30 Nov 30 Nov
2017 2017 2017 2017
GBP000 GBP000 GBP000 GBP000
Segment assets:
Property, plant and
equipment 890 465 - 1,355
Intangible assets 19,195 5,280 - 24,475
Working capital assets 7,942 9,112 (149) 16,905
------ ------------- ------------ ------------
Segment total assets 28,027 14,857 (149) 42,735
Unallocated head office
assets and eliminations 18,661
Consolidated total
assets 61,396
Segment liabilities:
Segment working capital
liabilities 8,327 4,402 (500) 12,229
Unallocated head office liabilities
and eliminations 27,529
Consolidated total liabilities 39,758
============
3. Segmental analysis (continued)
Revenue and results: UK & North America
Europe & Australia Consolidated
6 months 6 months 6 months
to to to
30 Nov 30 Nov 30 Nov
2016 2016 2016
GBP000 GBP000 GBP000
Segmental revenue
Total segmental revenue 8,448 6,346 14,794
Inter-segment revenue (239) (523) (762)
-------- ------------- ------------
Total external revenue 8,209 5,823 14,032
-------- ------------- ------------
Segment result
Segment operating profit/(loss)
before interest 1,118 (235) 883
Interest receivable 1 1 2
Interest payable (29) - (29)
-------- -------------
Segment profit/(loss)
after exceptional items
and interest 1,090 (234) 856
Unallocated head office income
less expenses (365)
Consolidated profit before
tax 491
Taxation (167)
------------
Consolidated profit after
tax 324
============
UK & North America
Europe & Australia Eliminations Consolidated
30 Nov 30 Nov 30 Nov 30 Nov
2016 2016 2016 2016
GBP000 GBP000 GBP000 GBP000
Segment assets:
Property, plant and
equipment 774 5,408 - 6,182
Intangible assets 11,765 6,229 - 17,994
Working capital assets 7,168 10,906 (844) 17,230
------ ------------- ------------ ------------
Segment total assets 19,707 22,543 (844) 41,406
Unallocated head office
assets and eliminations 18,709
Consolidated total
assets 60,115
============
Segment liabilities:
Segment working capital
liabilities 7,291 7,834 (1,330) 13,795
Unallocated head office
liabilities and eliminations 23,035
Consolidated total
liabilities 36,830
============
The above tables have been updated to allocate items previously classified as reconciling from internal reporting into the appropriate segment.
3. Segmental analysis (continued)
Revenue and results: UK & North America
Europe & Australia Consolidated
Year ended Year ended Year ended
31 May 31 May 31 May
2017 2017 2017
GBP000 GBP000 GBP000
Segmental revenue
Total segmental revenue 18,129 12,543 30,672
Inter-segment revenue (342) (556) (898)
---------- ------------- ------------
Total external revenue 17,787 11,987 29,774
---------- ------------- ------------
Segment result
Underlying segment operating
profit before exceptional
items and interest 2,704 643 3,347
Exceptional items (213) 1,285 1,072
Interest receivable 2 3 5
Interest payable (50) (2) (52)
---------- -------------
Segment profit after exceptional
items and interest 2,443 1,929 4,372
Unallocated head office
income less expenses (including
exceptional costs of GBP1,043,000) (1,708)
Consolidated profit before
tax 2,664
Taxation (1,290)
------------
Consolidated profit after
tax 1,374
============
UK & North America
Europe & Australia Eliminations Consolidated
31 May 31 May 31 May 31 May
2017 2017 2017 2017
GBP000 GBP000 GBP000 GBP000
Segment assets:
Property, plant and
equipment 715 1,087 - 1,802
Intangible assets 13,945 5,567 - 19,512
Working capital assets 9,388 12,440 (1,718) 20,110
------ ------------- ------------ ------------
Segment total assets 24,048 19,094 (1,718) 41,424
Unallocated head office assets and
eliminations 18,372
Consolidated total
assets 59,796
============
Segment liabilities:
Segment working capital
liabilities 9,312 3,430 (1,254) 11,488
Unallocated head office liabilities
and eliminations 26,992
Consolidated total
liabilities 38,480
============
The above tables have been updated to allocate items previously classified as reconciling from internal reporting into the appropriate segment.
4. Exceptional items
6 months to Year ended
30 Nov 30 Nov 31 May
2017 2016 2017
GBP000 GBP000 GBP000
Exceptional items included in
cost of sales :
* Write down of intangible assets - - 1,282
Exceptional items included in
selling and distribution expenses
:
* Restructuring costs - - 209
Exceptional items included in
administrative expenses :
* Acquisition expenses 171 - 88
Exceptional items included in
gain on disposal of property:
* Gain on sale of property - - (1,608)
171 - (29)
====== ====== ==========
Exceptional items are those significant items which warrant separate disclosure by virtue of their scale and nature to enable a full understanding of the Group's financial performance.
5. Taxation
The tax charge in the Consolidated Income Statement is calculated using the tax rates which each of the Group's operating entities expects to adopt for the financial year ended 31 May 2018. The Group continues to expect its effective corporation tax rate to be higher than the standard UK rate due to the trading profits it generates in overseas subsidiaries where the tax rates are higher than the UK.
The deferred tax asset relates to obligations under the defined benefit pension scheme and other temporary differences. The elements of the asset will be recovered in the UK and USA respectively.
On 22 December 2017, the US Senate substantively enacted the Tax Cuts and Jobs Act of 2017 (TCJA) which included, amongst other changes, a reduction in the federal tax rate in the US from 35% to 21%. As the announcement was not made until after the Balance Sheet date the Haynes North America Inc, deferred tax assets and liabilities have been valued using the federal tax rate in force as at 30 November 2017. Management estimate the impact of the change would have reduced the US deferred tax assets and deferred tax liabilities held on the balances held at 30 November 2017 by GBP1.3 million and GBP0.1 million respectively. An adjustment to reflect this tax change on the deferred tax balances will be made in the full year results to 31 May 2018.
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following:-
Before After Before After exceptional
exceptional exceptional exceptional items
items items items
6 months 6 months 6 months Year
to to to ended Year ended
30 Nov 30 Nov 31 May
2017 2017 30 Nov 2016 2017 31 May 2017
GBP000 GBP000 GBP000 GBP000 GBP000
Earnings :
Profit after tax attributable
to equity holders of
the Company - continuing
operations 797 657 324 1,424 1,374
------------ ------------ ----------- ------------ -----------------
No. No. No. No. No.
Number of shares
Weighted average for
basic earnings per
share ([a]) 15,111,540 15,111,540 15,111,540 15,111,540 15,111,540
Adjusted weighted average
for diluted earnings
per share ([a]) 15,272,540 15,272,540 15,111,540 15,111,540 15,111,540
------------ ------------ ----------- ------------ -----------------
Basic earnings per
share (pence) 5.3 4.3 2.1 9.4 9.1
Diluted earnings per
share (pence) 5.2 4.3 2.1 9.4 9.1
------------ ------------ ----------- ------------ -----------------
([a]) During the period the Company held 1,240,000 of its ordinary shares in treasury and have not been included in the calculation.
As at 30 November 2017, there were outstanding options on the Company's Ordinary shares. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential ordinary shares, such as share options granted to directors and employees.
As at 31 May 2017 and 30 November 2016 there were no outstanding options on either of the Company's two classes of shares and there was no difference between the earnings used in the basic and diluted earnings per share calculation.
7. Dividends
6 months to Year ended
30 Nov 30 Nov 31 May
2017 2016 2017
GBP000 GBP000 GBP000
Amounts recognised as distributions
to equity holders :
Final dividend of 4.0p per share
(2016: 4.0p) 604 604 604
Interim dividend of 3.5p per
share - - 529
604 604 1,133
====== ====== ==========
The directors have decided to pay an interim dividend of 3.5p per share (2016: 3.5p) amounting to GBP528,904 (2016: GBP528,904) on 11 April 2018 to shareholders on the register at the close of business on 16 March 2018. Accordingly, this dividend is not recognised in the interim accounts.
8. Analysis of the changes in cash and cash equivalents
As at Exchange As at
1 June 30 Nov
2017 Cash flow movements 2017
GBP000 GBP000 GBP000 GBP000
Cash at bank and
in hand 7,036 (2,598) (178) 4,260
Bank overdrafts (3,331) (1,239) - (4,570)
------- --------- --------- -------
3,705 (3,837) (178) (310)
======= ========= ========= =======
9. Retirement benefit obligation
The Group operates a number of different retirement programmes in the countries within which it operates. The principal pension programmes are a contributory defined benefit scheme in the UK and a non-contributory defined benefit plan in the US. The assets of all schemes are held independently of the Group and its subsidiaries.
During the period, the financial position of the above pension arrangements have been updated in line with the anticipated annual cost for current service, the interest on scheme liabilities and cash contributions made to the schemes.
The last full IAS 19 actuarial valuation was carried out by a qualified independent actuary as at 31 May 2017. This valuation has been updated by the scheme's actuaries on an approximate basis for the six month period ending 30 November 2017.
The movements in the retirement benefit obligation were as follows:
6 months
6 months to to Year ended
30 Nov 31 May
30 Nov 2017 2016 2017
GBP000 GBP000 GBP000
Retirement benefit obligation
at beginning of period (23,024) (15,101) (15,101)
Movement in the period :
- Total expenses charged
in the income statement (677) (600) (1,397)
- Contributions paid 661 520 1,515
- Actuarial (losses)/gains
taken directly to reserves 642 (5,697) (7,941)
- Foreign currency exchange
rates 34 (171) (100)
Retirement benefit obligation
at end of period (22,364) (21,049) (23,024)
=========== ======== ==========
10. Exchange rates
The foreign exchange rates used in the financial statements to consolidate the overseas subsidiaries are as follows (local currency equivalent to GBP1):
Period end rate Average rate
30 30 31 30 31
Nov Nov May 30 Nov Nov May
2017 2016 2017 2017 2016 2017
US dollar 1.35 1.25 1.29 1.32 1.29 1.28
Euro 1.13 1.18 1.15 1.12 1.17 1.17
Australian dollar 1.78 1.69 1.74 1.70 1.71 1.70
11. Property, plant and equipment
Total
GBP000
Net book value at 1 June 2016 8,434
Exchange rate movements 901
Additions 164
Disposals (282)
Depreciation (363)
Net book value at 30 November 2016 8,854
======
GBP000
Net book value at 1 June 2017 4,011
Exchange rate movements (84)
Additions 356
Disposals (2)
Depreciation (258)
Net book value at 30 November 2017 4,023
======
The Group had no capital expenditure which had been contracted but had not been provided for as at 30 November 2017 (2016: GBPnil).
12. Intangible assets
Total
GBP000
Carrying value at 1 June 2016 22,381
Exchange rate movements 2,039
Additions 3,346
Amortisation (2,983)
Carrying value at 30 November 2016 24,783
=======
GBP000
Carrying value at 1 June 2017 27,696
Exchange rate movements (90)
Additions 4,100
Additions through business combinations (note
14) 4,720
Amortisation (3,620)
Carrying value at 30 November 2017 32,806
=======
13. Asset held for sale
A freehold property in Nashville, US has been reclassified as an Asset held for sale. At the Balance Sheet date the property was under offer and was subsequently sold on 15 December 2017 for a gross cash consideration of $5.35 million (GBP4.0 million) with a subsequent estimated tax charge of $1.6 million (GBP1.2 million). The disposal will generate an estimated pre-tax profit on sale of $3.5 million (GBP2.6 million).
14. Acquisition
On 30 September 2017, Haynes Publishing Group P.L.C. acquired the E3 Technical business from Carweb, a UK subsidiary of Solera Holdings Inc for a cash consideration of GBP4.72 million. The E3 Technical business consists of repair and maintenance information ("RMI"), vehicle registration mark look-up ("VRM") and associated helpdesk services. The transaction included the acquisition of certain customer contracts, and the transfer of employees from Carweb. Immediately after acquisition Haynes Publishing Group P.L.C. assigned the assets acquired to its wholly owned subsidiary, HaynesPro (UK) Limited.
The table below shows the fair values of the assets and liabilities arising on the acquisition. The fair values are provisional pending the completion of the fair value exercise in respect of each class of asset which will be finalised during the second half of the financial year :
Recognised
on
acquisition
GBP'000
Assets Acquired
Intangible assets 4,720
Trade receivables 390
Other payables (390)
Fair value of net assets and Total consideration 4,720
Cash consideration 4,720
Total consideration 4,720
============
The net cash outflows arising on the acquisition
were as follows :
Cash consideration 4,720
Costs of acquisition (included in cash
flows from operating activities)(A) 171
Net cash outflow 4,891
============
(A) The costs of acquisition of GBP171,000 were expensed as incurred in the period and have been included as an exceptional item within administrative expenses (note 4).
During the two month period since acquisition, the E3 Technical business contributed GBP0.5 million of revenue and GBP0.2 million of profit before tax. If the acquisition had been made at the start of the financial period the revenue from the acquired business would have been GBP1.5 million. However, as prior to the acquisition the E3 Technical business was an integral part of the wider Carweb business utilising shared overhead services, it is not practical to quantify the associated profit contribution during this period.
15. Related party transactions
During the six months to 30 November 2017 there were no material related party transactions or material changes to the arrangements with related parties as reported in the Annual Report 2017.
16. Principal risks and uncertainties
The principal risks and uncertainties facing the Group during the second half of the financial year are outlined in the Interim Statement and summarised below :
- The UK and Global economic outlook and in particular, the consequential impact on consumer confidence and businesses.
- Movements in the exchange rate of the US Dollar and Euro against Sterling.
- The impact of movements in interest rates, inflation and investment performance on the Group's retirement benefit schemes.
The Board considers that the above, along with the principal risks and uncertainties which were discussed at more length in the Annual Report 2017 under the following headings and page references, continue to be the major risks and uncertainties facing the Group :
-- The Group's principal operational risks and uncertainties (page 18) -- The processes adopted by the Board to identify and monitor risk (page 31) -- The Group's principal financial risks and uncertainties (pages 78 - 80)
A copy of the Annual Report 2017 can be found on the Group's corporate website www.haynes.com/investor.
A copy of this half-year report will be distributed to all shareholders and will also be available to members of the public from the Company's registered office at Sparkford, Near Yeovil, Somerset BA22 7JJ. A copy of the interim report will also be available on the Group's corporate website at www.haynes.com/investor.
INDEPENT REVIEW REPORT TO HAYNES PUBLISHING GROUP P.L.C.
Report on the Interim Financial Statements
Our conclusion
We have reviewed Haynes Publishing Group P.L.C.'s Interim Financial Statements (the "Interim Financial Statements") in the interim results of Haynes Publishing Group P.L.C. for the 6 month period ended 30 November 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 Balance Sheet as at 30 November 2017;
-- the Consolidated Income Statement and 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 interim 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 interim results, including the Interim Financial Statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim 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 interim 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.
INDEPENDENT REVIEW REPORT TO HAYNES PUBLISHING GROUP P.L.C.
Responsibilities for the interim financial statements and the review (continued)
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 interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Interim Financial Statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Bristol
24 January 2018
a) The maintenance and integrity of the Haynes Publishing Group P.L.C. 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
IR SEIFULFASESF
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