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
  +0.00p +0.00% 312.00p 308.00p 316.00p 312.00p 312.00p 312.00p 0 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 33.8 3.6 9.9 31.5 21

Haynes Publishing Group PLC Interim Results

24/01/2019 7:33am

UK Regulatory (RNS & others)


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Haynes Publishing Group PLC

24 January 2019

HAYNES PUBLISHING GROUP P.L.C.

INTERIM RESULTS FOR THE 6 MONTHSED

30 November 2018

Haynes Publishing Group P.L.C. ("Haynes" or "the Group"), creator and supplier of practical information and data solutions to drivers, enthusiasts, professional mechanics and the automotive aftermarket in print and digital formats, today announces its results for the 6 months ended 30 November 2018.

Business and Financial Highlights

 
                                               Restated(1) 
                                   Adjusted       Adjusted                          Statutory(6) 
                                   26 weeks       26 weeks                              26 weeks 
                                         to             to        Change YoY                  to 
                                30 Nov 2018    30 Nov 2017    (Year-on-Year)         30 Nov 2018 
 Group revenue (1)                 GBP18.3m       GBP17.1m               +7%            GBP18.3m 
                              -------------  -------------  ----------------       ------------- 
 EBITDA (2)                         GBP6.3m        GBP5.5m              +15%             GBP6.3m 
                              -------------  -------------  ----------------       ------------- 
 Group operating profit 
  (2)                               GBP1.9m        GBP1.6m              +19%             GBP0.5m 
                              -------------  -------------  ----------------       ------------- 
 Group profit before tax 
  (2)                               GBP1.6m        GBP1.3m              +23%             GBP0.2m 
                              -------------  -------------  ----------------       ------------- 
 Basic earnings per share 
  (2)                                  8.2p           6.2p              +32%                0.3p 
                              -------------  -------------  ----------------       ------------- 
 Interim dividend                      3.5p           3.5p                 -                3.5p 
                              -------------  -------------  ----------------       ------------- 
 Operating cash flow before 
  tax (3)                           GBP5.7m        GBP6.2m              (8%)             GBP5.7m 
                              -------------  -------------  ----------------       ------------- 
 Net cash/(debt) (4,5)              GBP2.6m      (GBP0.3m)          +GBP2.9m             GBP2.6m 
                              -------------  -------------  ----------------       ------------- 
 

-- Headline revenue growth up 7% on last year at GBP18.3 million (2017: GBP17.1 million as restated).

-- YoY digital revenue up 23% at GBP9.7 million (2017: GBP7.9 million as restated) representing 53% of overall Group revenue (2017: 46%).

-- Higher revenues have driven adjusted EBITDA up 15% to GBP6.3 million (2017: GBP5.5 million as restated).

-- UK & European revenue up 15% YoY; segmental operating profit up 32% at GBP2.5 million (2017: GBP1.9 million as restated).

-- Like-for-like North America & Australian revenue down 4% YoY; segmental operating profit held at GBP0.4 million (2017: GBP0.4 million).

-- GBP4.4 million investment in new content, datasets and delivery platforms, up 7% (2017: GBP4.1 million).

   --        UK defined benefit scheme closed to future accrual on 30 November 2018. 

Eddie Bell, Chairman of Haynes Group, commented:

"During the first six months of 2018/19, the Group delivered another strong set of results as we continue to build and grow our global automotive content, data and solutions business. A solid performance from our underlying operations resulted in the seventh consecutive six-month period of headline revenue growth.

"Our continued investment in content, data and platforms is helping to drive a range of new initiatives across the Group that enables us to supply our customers with high quality, innovative commercial solutions to improve their service offering and business efficiency.

"The transition of Haynes continues to gather momentum and we enter the second half of the year with a clear strategic vision for delivering sustainable revenue and profit growth."

Notes to the Financial Highlights:

1. Prior year comparatives have been restated as the Group has adopted IFRS 15 'Revenue from Contracts with Customers'. The impact of the restatement has been to increase prior year reported revenue and profit before tax by GBP0.2 million. Note 1 of this interim report contains full details of the restatement.

2. Adjusted to exclude GBP1.5 million of adjusting items (2017: GBP0.2 million) which primarily relates to equalising Guaranteed Minimum Pensions (GMP's) in the UK defined benefit scheme. Note 4 of this interim report contains full details of the adjusting items.

3. Operating cash flows down 8% at GBP5.7 million (2017: GBP6.2 million) due to timing of previously reported one-off cash outflows including restructuring in the North American and Australian businesses.

   4.     Net cash defined as cash at bank net of overdrafts and loans. 
   5.     The Company has 1.2 million ordinary shares held in treasury. 

6. The Statutory figures for the 26 weeks to 30 November 2017 are included within the Consolidated Income Statement.

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 

James Stearns

   Media Contact:          New Century Media                             +44 20 7930 8033 

Catherine Hems

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

Over the last three years the Group has evolved significantly. As a global team, we are working together to use our unique content and industry data, in combination with our specialist automotive technological knowhow and IT skills, to supply our customers with accurate, reliable and innovative solutions. The recent financial success achieved by the Group is a reflection of our employees' dedication to this clear objective, and I thank everyone in the Group for their contribution.

During the last six months the Group has invested GBP4.4 million (2017: GBP4.1 million) which has been capitalised to expand our global content, datasets and delivery platforms. This investment is funded using cash generated from the Group's operating activities, and management believes that our ongoing investment programme is sustainable.

This investment is facilitating the growth in the services and solutions Haynes provides to its customers, and increasing the proportion of revenue we derive from our digital product ranges. In the six months to November 2018 the proportion of revenue we derive from our digital channels, much of which is contractual and recurring, has increased to 53% (GBP9.7 million), an increase on the 46% (2017: GBP7.9 million as restated) we reported this time last year.

Operational review

UK and Europe

Segmental revenue from the UK and European operations ended the six-month period up 15% at GBP12.9 million (2017: GBP11.2 million as restated). The increase has been driven by the continued growth in the Group's professional operations. HaynesPro revenue was up 28%, which included an additional four months' revenue from the E3 Technical business acquired on 30 September 2017. Excluding this incremental revenue, like-for-like HaynesPro revenue was up 10%.

A key focus has been to develop and harness the synergies and multi-layered solution opportunities within our European businesses. Product innovation linked to our accurate and comprehensive data sets has been a key factor in serving our customers. We're looking to complement this growth through geographical expansion. During the period HaynesPro also launched a beta version of their highly successful European WorkshopData module for the Australian market.

OATS, our global lubricants business, has delivered revenues in line with the prior period, as it continues to expand its international datasets to support our customers. Towards the end of the period we welcomed a new Managing Director, Mike Skypala, to the OATS business. Mike will play a key role in helping the executive management team deliver on the potential that resides in this important part of the Group.

A strong performance from our automotive titles lifted revenue by 4% in the UK consumer business. This was, however, offset by lower revenue from our practical lifestyle titles which resulted in overall revenue ending the six-month period 2% down on the prior year. Although presently relatively small in value, the revenue from our UK consumer digital products has again delivered strong growth, up 104% over the same period last year.

The higher segmental revenue helped increase UK and European operating profit before interest by 32% to GBP2.5 million (2017: GBP1.9 million as restated).

North America and Australia

On a like-for-like basis revenue from our North America and Australia operations ended the six-month period down 4%. Following management's decision to exit from our low margin Australian print business, reported revenue from the segment was down 8% to GBP5.4 million (2017: GBP5.9 million).

Local US revenue ended the six-month period down 5%, primarily due to lower sales of our print manuals sold through bricks and mortar retailers.

In January 2019, we were delighted to appoint Harvey Wolff as the new Senior Vice President of Haynes North America. Harvey was the Vice President of Sales for Haynes North America until 2010 and has a strong sales and marketing background, with knowledge and experience in the North American automotive aftermarket and the oil service industry.

Our Australian team has been working closely with their European colleagues to bring to market the new Australian HaynesPro WorkshopData module. Local management have also successfully transitioned to a single brand of print manual which will help focus our sales and marketing activity on the Haynes brand.

Excluding the revenue from third party printing and distribution services, which were discontinued at the end of the first quarter, underlying like-for-like Australian revenue was up 4%. The removal of low margin print and distribution services in Australia resulted in local currency revenue ending the period 26% down on the prior year.

The impact of the lower segmental revenue was offset by ongoing savings in the cost base of the North American operation and a refocusing on core activities in our Australian business, which left overall segmental operating profit before interest in line with the previous year at GBP0.4 million (2017: GBP0.4 million).

Interim dividend

The Board is declaring an unchanged interim dividend of 3.5 pence per share. The interim dividend will be paid on 17 April 2019 to shareholders on the register at the close of business on 22 March 2019 (with an ex-dividend date of 21 March 2019).

Future outlook

As the proportion of digital revenue the Group derives from its contracted professional channels increases, the seasonality within the business, which has traditionally led to a higher mix of second half revenue and profitability, is reduced. At this time, the Board is confident that the Group is trading in line with market expectations for the full year.

The Group has a clear vision and business strategy to become a leading global automotive data, content and solutions provider, driven by our growing dynamic and innovative employee base around the world.

The Haynes business model is based on our passion and dedication to providing innovative automotive content and data solutions to our customers. The platforms which disseminate our content help to ensure we remain a trusted supplier to our commercial customers, and an independent and reliable source of information to motorists. The Group is free of debt, with strong cash generation allowing us to grow the business through ongoing internal product development, geographical expansion and where the opportunity arises, strategic acquisition.

J Haynes

Chief Executive Officer

23 January 2019

Financial review

Overall Group revenue ended the six-month period to 30 November 2018 up 7% against the prior year at GBP18.3 million (2017: GBP17.1 million as restated) through a combination of underlying organic growth and incremental revenue from acquisitions. The impact of foreign exchange during the period was negligible as the average Euro rate ended the period in line with last year at EUR1.12 whilst a slight weakening in Sterling against the US Dollar left the average exchange rate at $1.30 (2017: $1.32). Like-for-like, excluding incremental revenue from acquisitions, the discontinued Australian third-party print services and currency exchange, overall Group revenue increased by 2%.

Overall Group gross profit increased by 6% to GBP10.9 million (2017: 10.3 million as restated). The Group's gross margin decreased by 0.9 percentage points to 59.7% (60.6% as restated), due to the mix of sales and a higher amortisation charge as the Group continues to invest in new content, data and delivery platforms. At 59.7% the margin was slightly ahead of the last full year margin (31 May 2018: 59.5%).

Group overheads increased by 3% during the period to GBP9.0 million (2017: GBP8.7 million). Excluding the additional four months of E3 Technical and currency movements, like-for-like overheads were tracking 1% down on the previous period.

Adjusting items include GBP1.2 million relating to our UK pension scheme actuaries best estimate of the impact of guaranteed minimum pension ("GMP") equalisation. On 26 October 2018, the High Court handed down a judgement involving the Lloyds Banking Group's defined benefit pension schemes. The judgement concluded that Schemes should equalise pension benefits for men and women in relation to GMP. The judgement has implications for many defined benefit schemes, including our UK scheme. At this time, having taken advice from our actuary, the Directors feel an expense of GBP1.2 million best reflects the estimate of the impact of this ruling on our reported UK pension liabilities. Adjusting items also include GBP0.3 million of acquired amortisation.

Adjusted Group operating profit before tax and adjusting items was up 19% to GBP1.9 million (2017: GBP1.6 million as restated) boosted by the higher Group revenue. Reported Group operating profit was GBP0.5 million (2017: GBP1.5 million as restated).

Net finance costs ended the period in line with the prior year at GBP0.3 million (2017: GBP0.3 million).

Adjusted Group profit before tax before adjusting items ended the period up 23% at GBP1.6 million (2017: GBP1.3 million as restated). Reported Group profit before tax was GBP0.2 million (2017: GBP1.1 million as restated).

The Group's effective tax rate for the period was 25% (2017: 29% as restated) with the reduction primarily due to the reduction in the headline rate of US federal tax enacted in December 2017.

Adjusted earnings per share before adjusting items increased to 8.2 pence (2017: 6.2 pence as restated) reflecting a combination of the underlying profit growth and reduction in the Group's effective tax rate. Reported earnings per share were 0.3 pence (2017: 5.3 pence as restated).

Balance sheet and cash flow

Expenditure on product development increased during the six months to 30 November 2018 as the Group invested GBP4.4 million in new content, platforms and services for its professional and consumer product ranges (2017: GBP4.1 million) and GBP0.2 million on tangible fixed assets (2017: GBP0.4 million).

The net IAS 19 pensions deficit on the Group's two defined benefit retirement schemes as at 30 November 2018 was 3% higher at GBP19.3 million (31 May 2018: GBP18.7 million) largely due to the inclusion of the estimated impact for equalising GMP in the UK scheme. Partially offsetting the impact of GMP equalisation was a reduction in the scheme liabilities driven by a higher UK discount rate assumption. The combined assets of the schemes were GBP33.3 million (31 May 2018: GBP34.1 million) and the combined scheme liabilities were GBP52.6 million (31 May 2018: GBP52.8 million).

On 30 November 2018, the UK defined benefit scheme closed to future accrual and all active members transferred to a new Group defined contribution arrangement.

Net cash generated from operations before tax decreased during the six-month period to GBP5.7 million (2017: GBP6.2 million) notwithstanding EBITDA ending the period up 15% at GBP6.3 million (2017: GBP5.5 million as restated). This was primarily due to the net cash outflows of non-recurring adjusting items reported in prior periods.

The Group's net cash position on 30 November 2018 was GBP2.6 million (31 May 2018: GBP2.5 million). The Group still holds 1.2 million shares in treasury.

Responsibility statement

Pages 28 and 29 of the Annual Report 2018 provide details of the serving Executive and Non-Executive Directors. A statement of the Directors' responsibilities is contained on page 49 of the Annual Report 2018. A copy of the Annual Report 2018 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 (refer to note 15).

-- 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.

By order of the Board

Richard Barker

Group Finance Director

23 January 2019

INTERIM FINANCIAL STATEMENTS FOR THE 6 MONTHSED 30 NOVEMBER 2018

Consolidated Income Statement

 
 
 
                                               Unaudited                             Unaudited 
                                           6 Months to 30 Nov                   6 Months to 30 Nov 
                                                  2018                                 2017 
                                              Adjusting                            Adjusting 
                                                  items                                items 
                                                  (note               Restated(1)      (note    Restated(1) 
                                    Adjusted         4)    Statutory     Adjusted         4)      Statutory 
                                      GBP000     GBP000       GBP000       GBP000     GBP000         GBP000 
Continuing operations 
 
Revenue (note 2)                      18,270          -       18,270       17,064          -         17,064 
 
Cost of sales                        (7,367)          -      (7,367)      (6,725)          -        (6,725) 
                                              ---------  ----------- 
 
Gross profit                          10,903          -       10,903       10,339          -         10,339 
 
Other income                              23          -           23            5          -              5 
 
Distribution costs                   (4,253)          -      (4,253)      (4,292)          -        (4,292) 
 
Administrative expenses              (4,733)    (1,459)      (6,192)      (4,417)      (171)        (4,588) 
 
Operating profit/(loss)                1,940    (1,459)          481        1,635      (171)          1,464 
 
Finance income                             2          -            2            3          -              3 
 
Finance costs                           (26)          -         (26)         (49)          -           (49) 
Other finance costs - retirement 
 benefits                              (269)          -        (269)        (270)          -          (270) 
                                    --------  ---------  ----------- 
 
Profit/(loss) before taxation          1,647    (1,459)          188        1,319      (171)          1,148 
 
Taxation (note 5)                      (412)        263        (149)        (380)         31          (349) 
 
 
Profit/(loss) for the period           1,235    (1,196)           39          939      (140)            799 
                                    ========  =========  ===========  ===========  =========  ============= 
 
 
Earnings per 20p share - (note 
 6)                                    Pence                   Pence        Pence                     Pence 
From continuing operations 
         - Basic                         8.2                     0.3          6.2                       5.3 
         - Diluted                       8.0                     0.3          6.1                       5.2 
                                    --------  ---------  -----------  -----------  ---------  ------------- 
 

(1) See Note 1 - Restatement of prior years

Consolidated Statement of Comprehensive Income

 
                                                              Unaudited     Unaudited 
                                                                          Restated(1) 
                                                               6 months      6 months 
                                                                     to            to 
                                                            30 Nov 2018   30 Nov 2017 
                                                                 GBP000        GBP000 
 
Profit for the period                                                39           799 
 
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                                                        777         1,644 
 - US Scheme                                                       (89)       (1,002) 
Deferred tax on retirement benefit obligation 
 - UK Scheme                                                      (133)         (279) 
 - US Scheme                                                         20           400 
                                                                    575           763 
 
Items that will or may be reclassified to profit 
 or loss in subsequent periods: 
Exchange differences on translation of foreign operations           525         (652) 
 
Other comprehensive income                                        1,100           111 
 
Total comprehensive income                                        1,139           910 
                                                            ===========  ============ 
 

(1) See Note 1 - Restatement of prior years

Consolidated Balance Sheet

 
                                                          Unaudited       Audited 
                                            Unaudited   Restated(1)   Restated(1) 
                                          30 Nov 2018   30 Nov 2017   31 May 2018 
                                               GBP000        GBP000        GBP000 
Non-current assets 
Property, plant and equipment (note 11)         1,439         4,023         1,525 
Intangible assets (note 12)                    33,489        32,806        33,244 
Deferred tax assets                             5,852         7,800         5,693 
Total non-current assets                       40,780        44,629        40,462 
Current assets 
Inventories                                     2,729         3,511         3,084 
Trade and other receivables                     9,940         8,712         9,264 
Tax recoverable                                   441             -           124 
Cash and cash equivalents                       5,089         4,260         4,809 
                                               18,199        16,483        17,281 
Assets held for sale (note 13)                  2,195         1,416         2,195 
Total current assets                           20,394        17,899        19,476 
                                          -----------  ------------  ------------ 
Total assets                                   61,174        62,528        59,938 
                                          -----------  ------------  ------------ 
Current liabilities 
Trade and other payables                      (9,539)       (8,604)       (9,813) 
Borrowings                                    (2,490)       (4,570)       (2,276) 
Provisions                                      (261)         (885)         (332) 
Total current liabilities                    (12,290)      (14,059)      (12,421) 
Non-current liabilities 
Deferred tax liabilities                      (3,388)       (3,570)       (3,233) 
Retirement benefit obligation (note 9)       (19,266)      (23,118)      (18,712) 
Total non-current liabilities                (22,654)      (26,688)      (21,945) 
 
Total liabilities                            (34,944)      (40,747)      (34,366) 
                                          -----------  ------------  ------------ 
 
Net assets                                     26,230        21,781        25,572 
                                          ===========  ============  ============ 
 
Equity 
Share capital                                   3,270         3,270         3,270 
Share premium                                     638           638           638 
Treasury shares                               (2,425)       (2,447)       (2,447) 
Retained earnings                              16,499        12,719        16,388 
Foreign currency translation reserve            8,248         7,601         7,723 
                                          -----------  ------------  ------------ 
Total equity                                   26,230        21,781        25,572 
                                          ===========  ============  ============ 
 

(1) See Note 1 - Restatement of prior years

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 2018                     3,270      638   (2,447)        7,723    15,803  24,987 
Impact of adoption of IFRS 
 15(1)                                         -        -         -            -       585     585 
                                        --------  -------  --------  -----------  --------  ------ 
Balance at 1 June 2018 (restated(1) 
 )                                         3,270      638   (2,447)        7,723    16,388  25,572 
Profit for the period                          -        -         -            -        39      39 
Other comprehensive income: 
Currency translation adjustments               -        -         -          525         -     525 
Actuarial gains/(losses) 
 on defined benefit plans 
 (net of tax)                                  -        -         -            -       575     575 
                                        --------  -------  --------  -----------  --------  ------ 
Total other comprehensive 
 income                                        -        -         -          525       575   1,100 
                                        --------  -------  --------  -----------  --------  ------ 
Total comprehensive income                     -        -         -          525       614   1,139 
Performance share plan                         -        -         -            -       102     102 
Sale of treasury shares                        -        -        22            -         -      22 
Dividends (note 7)                             -        -         -            -     (605)   (605) 
                                        --------  -------  --------  -----------  --------  ------ 
Balance at 30 November 2018                3,270      638   (2,425)        8,248    16,499  26,230 
--------------------------------------  --------  -------  --------  -----------  --------  ------ 
 
Unaudited 
 
Prior interim period : 
Balance at 1 June 2017                     3,270      638   (2,447)        8,253    11,602  21,316 
Prior year restatement(1)                      -        -         -            -     (584)   (584) 
Impact of adoption of IFRS 
 15(1)                                         -        -         -            -       585     585 
                                        --------  -------  --------  -----------  --------  ------ 
Balance at 1 June 2017 (restated(1) 
 )                                         3,270      638   (2,447)        8,253    11,603  21,317 
Profit for the period (restated(1) 
 )                                             -        -         -            -       799     799 
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) (restated(1) 
 )                                             -        -         -        (652)     1,562     910 
Performance share plan                         -        -         -            -       158     158 
Dividends (note 7)                             -        -         -            -     (604)   (604) 
                                        --------  -------  --------  -----------  --------  ------ 
Balance at 30 November 2017 
 (restated(1) )                            3,270      638   (2,447)        7,601    12,719  21,781 
--------------------------------------  --------  -------  --------  -----------  --------  ------ 
 
 (1) See Note 1 - Restatement 
 of prior years 
 
 

Consolidated Cash Flow Statement

 
 
                                                              Unaudited    Unaudited 
                                                                         Restated(1) 
                                                               6 months     6 months 
                                                                     to           to 
                                                            30 Nov 2018  30 Nov 2017 
                                                                 GBP000       GBP000 
Cash flows from operating activities 
Profit after tax                                                     39          799 
Adjusted for : 
Income tax expense                                                  149          349 
Interest payable and similar charges                                 26           49 
Interest receivable                                                 (2)          (3) 
Retirement benefit finance cost                                     269          270 
                                                            -----------  ----------- 
Operating profit                                                    481        1,464 
Depreciation on property, plant and equipment                       238          258 
Amortisation of non-acquired intangible assets                    4,156        3,620 
Adjusting items (note 4)                                          1,459          171 
                                                            -----------  ----------- 
EBITDA before adjusting items                                     6,334        5,513 
Performance share plan                                              102          158 
IAS 19 pensions current service cost net of contributions 
 paid                                                             (245)        (254) 
Loss on disposal of property, plant and equipment                    35            2 
Operating cashflows before working capital movements              6,226        5,419 
Changes in working capital : 
Decrease in inventories                                             446          338 
Increase in receivables                                           (551)        (231) 
(Decrease)/increase in payables                                   (370)          947 
Movement in provisions                                             (84)        (234) 
Net cash generated from operations                                5,667        6,239 
Tax paid                                                          (516)         (79) 
                                                            ----------- 
Net cash generated by operating activities                        5,151        6,160 
                                                            ----------- 
Investing activities 
Prior year acquisition - business combinations                        -      (4,891) 
Disposal proceeds on property, plant and equipment                    3            - 
Purchases of property, plant and equipment                        (162)        (356) 
Expenditure on development costs included in intangible 
 assets                                                         (4,362)      (4,100) 
Interest received                                                     2            3 
                                                            ----------- 
Net cash used in investing activities                           (4,519)      (9,344) 
                                                            ----------- 
Financing activities 
Dividends paid                                                    (605)        (604) 
Interest paid                                                      (26)         (49) 
Proceeds from sale of treasury shares                                22            - 
Net cash used in financing activities                             (609)        (653) 
Net increase/(decrease) in cash and cash equivalents                 23      (3,837) 
Cash and cash equivalents at beginning of period                  2,533        3,705 
Effect of foreign exchange rate changes                              43        (178) 
Cash and cash equivalents at end of period (note 8)               2,599        (310) 
                                                            ===========  =========== 
 

(1) See Note 1 - Restatement of prior years

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 2018 and 30 November 2017 and for the twelve months ended 31 May 2018 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 2018 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 2018 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. These 30 November 2018 statements were approved by the Board of Directors on 23 January 2019 and although not audited are subject to a review by the Group's auditors.

This 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 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 2018, with the exception of IFRS 15 (as detailed below), Guaranteed Minimum Pension (note 4) and changes in estimates that are required in determining the provision for income taxes due to tax rate changes in the territories that the Group operates.

These interim financial statements have been prepared on a 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 adopted in the current period 

The interim financial statements have been prepared on a consistent basis with the accounting policies set out in the Annual Report 2018 and should be read in conjunction with that Annual Report except for the adjustments of new accounting standards as discussed below. The Group's annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS's) and IFRS Interpretations Committee (IFRSIC) interpretations as adopted by the European Union and the Annual Report 2018 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 and with the exception of the standards detailed below, management 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 2019. As a result of adopting the standards below, the Group has changed its accounting policies and, where applicable, made retrospective adjustments.

   -         IFRS 15 Revenue from Contracts with Customers 

This is the first set of reported results where the Group has adopted IFRS 15, "Revenue from Contracts with Customers" which establishes a principles based approach for revenue recognition and is based on the concept of recognising revenue when (or as) performance obligations are satisfied and the control of goods and services is transferred.

During the first six months of the current year, the Directors completed the review outlined in the 2018 Annual Report and have adopted IFRS 15 from 1 June 2018, applying the full retrospective approach and restating the comparatives where necessary. Full details of the restatement are contained in section (e) below.

The review focussed on the timing of recognition of revenue from some contracts in the professional business where 'usage' of services was reported by customers to the Group either on a monthly or quarterly basis and until this point, the Group had no visibility of the revenue. Until the adoption of IFRS 15, the Group recognised this revenue in line with IAS 18 "Revenue" at the time it could be reliably measured i.e. when it was reported to the Group. Under IFRS 15, the revenue from these particular contracts has been estimated and brought forward to be in line with when performance conditions are provided to customers and when they are deemed to have 'control' which under the standard is when

Accounting policies - Basis of preparation (continued)

they use the Group's Intellectual Property under contract for their benefit. The Group has updated its revenue recognition policy on revenue from the sale of digital data through subscriptions, software licences and development projects to reflect when licences are sold on the Group's behalf by third party distributors, revenue will be estimated over the period in which these sales occur.

Note 2 sets out the analysis of contracted revenues.

   -         IFRS 9 Financial Instruments 

The Group has adopted IFRS 9, "Financial Instruments", prospectively from 1 June 2018. The standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. There have been no significant changes to the classification and measurement of the Group's financial assets and liabilities as a result of IFRS 9.

IFRS 9 requires a new impairment model with impairment provisions based on expected credit losses rather than incurred credit losses under IAS 39. For trade and other receivables, we have applied the simplified approach under the standard and determined expected credit losses for the Group's receivables. The Directors consider the transitional movement in the impairment allowance as a result of adopting this policy as immaterial therefore there was no IFRS 9 impact on retained earnings at 1 June 2018.

   d)       New standards and interpretations not adopted with an effective date after the period 

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 2019 and which have not been adopted early, including the following:

   -         IFRS 16 Leases (with an effective date of 1 January 2019) 

Requires operating leases to be treated the same as finance leases except for short-term leases and leases of low value assets. This results in previously recognised operating leases being treated as right of use assets and the finance lease liability being recorded on the Consolidated Balance Sheet. The right of use asset is initially measured at cost and subsequently measured at cost less accumulated depreciation and impairment losses. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments. Under IFRS 16, the classification of cash flows will be amended as the lease payments will be split into a principal and interest portion and presented as financing and operating cash flows respectively.

As at 31 May 2018, the Group had total non-cancellable lease commitments of GBP2,448,000. An initial assessment indicates that these arrangements meet the definition of a lease under IFRS 16 and hence the Group will recognise a right of use asset and lease liability unless they meet the definitions of short-term or low value leases. Management therefore considers that the adoption of IFRS 16 will have an impact on the Consolidated Financial Statements but their assessment of which transition option to adopt is still ongoing.

   e)       Restatement of prior years 

IFRS 15 - As explained in section (c) above, the Group has transitioned to IFRS 15 applying the full retrospective approach which requires the restatement of previous periods, so that prior period revenue is reported in line with the current period. The impact of this restatement in the period to 30 November 2017 has been to increase revenue by in the UK and European segment by GBP183,000 and also the tax charge by GBP40,000 in the Consolidated Income Statement. The impact on the Consolidated Balance Sheet as at 30 November 2017 has been to increase trade receivables by GBP963,000, increase deferred tax liabilities by GBP235,000 and increase equity reserves by GBP585,000 which has also been adjusted in the Consolidated Statement of Changes in Equity.

The impact of this restatement in the years ended 31 May 2018 and 31 May 2017 in the Consolidated Balance Sheet has been to increase trade receivables by GBP780,000, increase deferred tax liabilities by GBP195,000 and increase equity reserves by the corresponding GBP585,000 which has also been adjusted in the Consolidated Statement of Changes in Equity. There is no impact on the Consolidated Income Statement.

US Pension Plan - In the financial statements for the year ended 31 May 2018, the methodology for calculating the discount rate on the US defined benefit pension plan was amended to use an appropriate yield curve basis as prescribed under IAS 19. The impact of this change has been to increase the US retirement benefit obligation by GBP754,000 in the 31 May 2017 Consolidated Balance Sheet. Accordingly, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity and affected notes have been restated. The impact of this restatement on 31 May 2017 Consolidated Balance Sheet has been to increase the US defined benefit pension plan liability by GBP754,000 and to increase deferred tax assets by GBP170,000 with the net effect of GBP584,000 decreasing equity reserves in the Consolidated Statement of Changes in Equity.

   2.       Revenue 
 
                                         6 months to 
                                                                   Restated(1) 
                                                     30 Nov 2018   30 Nov 2017 
                                                          GBP000        GBP000 
Revenue by geographical destination on continuing 
operations : 
United Kingdom                                             5,626         4,337 
Rest of Europe                                             6,589         6,389 
United States of America                                   5,200         5,201 
Australasia                                                  616           870 
Rest of World                                                239           267 
                                                     -----------  ------------ 
Total consolidated revenue *                              18,270        17,064 
                                                     ===========  ============ 
 
* Analysed as follows : 
Revenue from sales of digital data                         9,726         7,925 
Revenue from royalty and licensing arrangements              200           233 
                                                     -----------  ------------ 
Total contracted revenue                                   9,926         8,158 
Revenue from sales of printed products                     8,344         8,906 
                                                          18,270        17,064 
                                                     ===========  ============ 
 
 

(1) See Note 1 - Restatement of prior years

   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 UK, Netherlands, Italy, Spain, Romania and Germany. Its core business is the publication and supply of automotive repair and technical information to the DIY and professional automotive aftermarkets in both a print and digital format. Through OATS, the UK and European business also supplies lubricants data to European and global oil companies.

The North American and Australian business with headquarters near Los Angeles, California publishes DIY repair manuals for cars and motorcycles in both a print and digital format. The business publishes titles under the Haynes, Chilton and Clymer brands, in both English and Spanish. On 1 June 2017, the Australian branch operation based in Sydney, incorporated as a separate legal entity (Haynes Australia Pty Limited) and became a 100% subsidiary of Haynes Publishing Group P.L.C. The Australian company publishes print manuals under both the Haynes and Gregory's brands.

The two operating segments above 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 upon 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 estimate of contracted revenue included under IFRS 15 "Revenue from Contracts with Customers" relating to the period is included in the appropriate segment. No estimate is included in the internal reports reviewed by the chief operating decision maker.

-- The unallocated head office assets primarily relate to freehold property, intangible assets, 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 2018    30 Nov 2018   30 Nov 2018 
                                             GBP000         GBP000        GBP000 
Segmental revenue 
Total segmental revenue                      13,007          5,511        18,518 
Inter-segment revenue                         (122)          (126)         (248) 
                                        -----------  -------------  ------------ 
Total external revenue                       12,885          5,385        18,270 
                                        -----------  -------------  ------------ 
Segment result 
Segment operating profit before 
 adjusting items and interest                 2,460            412         2,872 
Adjusting items                               (177)              -         (177) 
Interest receivable                               1              -             1 
Interest payable                               (13)              -          (13) 
                                        -----------  ------------- 
Segment profit after adjusting 
 items and interest                           2,271            412         2,683 
Unallocated head office income less 
 expenses (including adjusting items 
 of GBP1,282,000)                                                        (2,495) 
Consolidated profit before tax                                               188 
Taxation                                                                   (149) 
                                                                    ------------ 
Consolidated profit after tax                                                 39 
                                                                    ============ 
 
 
                                              UK &  North America 
                                            Europe    & Australia  Eliminations  Consolidated 
                                       30 Nov 2018    30 Nov 2018   30 Nov 2018   30 Nov 2018 
                                            GBP000         GBP000        GBP000        GBP000 
Segment assets: 
Property, plant and equipment                  962            475             -         1,437 
Intangible assets                           20,197          5,125             -        25,322 
Working capital assets                      10,734          7,631         (363)        18,002 
                                      ------------  -------------  ------------  ------------ 
Segment total assets                        31,893         13,231         (363)        44,761 
Unallocated head office assets and eliminations                                        16,413 
Consolidated total assets                                                              61,174 
 
 
 
  Segment liabilities: 
  Segment working capital 
  liabilities                               12,835          3,741       (5,764)        10,812 
Unallocated head office liabilities and eliminations                                   24,132 
Consolidated total liabilities                                                         34,944 
                                                                                 ============ 
 
   3.      Segmental analysis (continued) 
 
Revenue and results:                            Restated(1) 
                                                       UK &  North America   Restated(1) 
                                                     Europe    & Australia  Consolidated 
                                                   6 months       6 months      6 months 
                                                         to             to            to 
                                                30 Nov 2017    30 Nov 2017   30 Nov 2017 
                                                     GBP000         GBP000        GBP000 
Segmental revenue 
Total segmental revenue                              11,291          5,965        17,256 
Inter-segment revenue                                  (92)          (100)         (192) 
                                                -----------  -------------  ------------ 
Total external revenue                               11,199          5,865        17,064 
                                                -----------  -------------  ------------ 
Segment result 
Segment operating profit before interest              1,892            422         2,314 
Interest receivable                                       2              1             3 
Interest payable                                       (38)              -          (38) 
                                                -----------  ------------- 
Segment profit after interest                         1,856            423         2,279 
Unallocated head office income less expenses 
 (including adjusting items of GBP171,000)                                       (1,131) 
Consolidated profit before tax                                                     1,148 
Taxation                                                                           (349) 
                                                                            ------------ 
Consolidated profit after tax                                                        799 
                                                                            ============ 
 
 
                                        Restated(1)     Restated(1) 
                                               UK &   North America                 Restated(1) 
                                             Europe     & Australia  Eliminations  Consolidated 
                                        30 Nov 2017     30 Nov 2017   30 Nov 2017   30 Nov 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                        8,905           9,112         (149)        17,868 
                                        -----------  --------------  ------------  ------------ 
Segment total assets                         28,990          14,857         (149)        43,698 
Unallocated head office assets and eliminations                                          18,830 
Consolidated total assets                                                                62,528 
                                                                                   ============ 
 
 
  Segment liabilities: 
  Segment working capital liabilities         8,327           5,156         (500)        12,983 
Unallocated head office liabilities and 
 eliminations                                                                            27,764 
Consolidated total liabilities                                                           40,747 
                                                                                   ============ 
 

(1) See Note 1 - Restatement of prior years

   3.      Segmental analysis (continued) 
 
Revenue and results:                                   UK &  North America 
                                                     Europe    & Australia  Consolidated 
                                                 Year ended     Year ended    Year ended 
                                                31 May 2018    31 May 2018   31 May 2018 
                                                     GBP000         GBP000        GBP000 
Segmental revenue 
Total segmental revenue                              22,873         11,358        34,231 
Inter-segment revenue                                 (176)          (267)         (443) 
                                                -----------  -------------  ------------ 
Total external revenue                               22,697         11,091        33,788 
                                                -----------  -------------  ------------ 
Segment result 
Underlying segment operating profit 
 before adjusting items and interest                  4,805            399         5,204 
Adjusting items                                       (368)          1,963         1,595 
Interest receivable                                       9              1            10 
Interest payable                                       (46)              -          (46) 
                                                -----------  ------------- 
Segment profit after adjusting items 
 and interest                                         4,400          2,363         6,763 
Unallocated head office income less expenses 
 (including adjusting items of GBP935,000)                                       (3,201) 
Consolidated profit before tax                                                     3,562 
Taxation                                                                         (2,068) 
                                                                            ------------ 
Consolidated profit after tax                                                      1,494 
                                                                            ============ 
 
 
                                        Restated(1) 
                                               UK &    North America                 Restated(1) 
                                             Europe      & Australia  Eliminations  Consolidated 
                                        31 May 2018      31 May 2018   31 May 2018   31 May 2018 
                                             GBP000           GBP000        GBP000        GBP000 
Segment assets: 
Property, plant and equipment                   926              595             -         1,521 
Intangible assets                            21,390            5,153             -        26,543 
Working capital assets                       10,638            7,488         (529)        17,597 
                                        -----------  ---------------  ------------  ------------ 
Segment total assets                         32,954           13,236         (529)        45,661 
Unallocated head office assets and eliminations                                           14,277 
Consolidated total assets                                                                 59,938 
                                                                                    ============ 
 
 
  Segment liabilities: 
  Segment working capital liabilities        15,675            5,265       (7,325)        13,615 
Unallocated head office liabilities and eliminations                                      20,751 
Consolidated total liabilities                                                            34,366 
                                                                                    ============ 
 

(1) See Note 1 - Restatement of prior years

   4.       Adjusting items 
 
                                                                6 months to 
                                                          30 Nov 2018  30 Nov 2017 
                                                               GBP000       GBP000 
Adjusting items included in administrative expenses 
 : 
 
  *    Acquisition expenses                                         -          171 
 
  *    Acquired intangible amortisation charge                    299            - 
 
  *    Equalisation of Guaranteed Minimum Pension (GMP) 
       benefits                                                 1,160            - 
                                                          -----------  ----------- 
                                                                1,459          171 
                                                          ===========  =========== 
 

Adjusting 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.

The change in pension liabilities recognised in relation to GMP equalisation involves estimation uncertainty. The judgement was made one month prior to the Group's balance sheet date of 30 November 2018 and accordingly, the Directors have had limited time to consider the full implications of the judgement. The Company and the Scheme Trustees are yet to decide which approach they will use to equalise GMP as a range of options are available. While the financial statements reflect the current best estimate of the impact on pension liabilities, that estimate reflects a number of assumptions and the information currently available. The current best estimate reflects an increase in liabilities of 2.7% and the Directors have been advised the final impact could be in the potential range of 2.0% - 3.3% of liabilities.

   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 2019. 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.

   6.       Earnings per share 

The calculation of the basic and diluted earnings per share is based on the following:-

 
                                                                  Restated(1)  Restated(1) 
                                            Adjusted   Statutory     Adjusted    Statutory 
                                            6 months    6 months     6 months     6 months 
                                                  to          to           to           to 
                                              30 Nov      30 Nov       30 Nov       30 Nov 
                                                2018        2018         2017         2017 
                                              GBP000      GBP000       GBP000       GBP000 
Earnings : 
Profit after tax attributable to equity 
 holders of the Company - continuing 
 operations                                    1,235          39          939          799 
                                          ----------  ----------  -----------  ----------- 
                                                 No.         No.          No.          No. 
Number of shares 
Weighted average for basic earnings 
 per share ([a])                          15,116,684  15,116,684   15,111,540   15,111,540 
Adjusted weighted average for diluted 
 earnings per share ([a])                 15,427,351  15,427,351   15,272,540   15,272,540 
                                          ----------  ----------  -----------  ----------- 
Basic earnings per share (pence)                 8.2         0.3          6.2          5.3 
Diluted earnings per share (pence)               8.0         0.3          6.1          5.2 
                                          ----------  ----------  -----------  ----------- 
 

([a]) At the beginning of the period, the Company held 1,240,000 (2017: 1,240,000) of its ordinary shares in treasury which are not included in the calculation. On 5 September 2018, the Company sold 10,946 ordinary shares held in treasury which have been weighted accordingly in the above calculation. The total number of ordinary shares held in treasury at 30 November 2018 was 1,229,054.

As at 30 November 2018 and 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.

(1) See Note 1 - Restatement of prior years

   7.       Dividends 
 
                                    6 months to 
                                                         30 Nov 2018  30 Nov 2017 
                                                              GBP000       GBP000 
Amounts recognised as distributions to equity holders 
: 
 
Final dividend of 4.0p per share (2017: 4.0p)                    605          604 
                                                                 605          604 
                                                         ===========  =========== 
 
 

The Directors have decided to pay an interim dividend of 3.5p per share (2017: 3.5p) amounting to GBP529,287 (2017: GBP528,904) on 17 April 2019 to shareholders on the register at the close of business on 22 March 2019. 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 2018  Cash flow  movements  30 Nov 2018 
                                GBP000     GBP000     GBP000       GBP000 
 
Cash at bank and in hand         4,809        237         43        5,089 
Bank overdrafts                (2,276)      (214)          -      (2,490) 
                           -----------  ---------  ---------  ----------- 
                                 2,533         23         43        2,599 
                           ===========  =========  =========  =========== 
 
   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 2018. This valuation has been updated by the scheme's actuaries on an approximate basis for the six month period ending 30 November 2018.

The movements in the retirement benefit obligation were as follows:

 
                                                                     Restated(1) 
                                                           6 months     6 months 
                                                                 to           to 
                                                        30 Nov 2018  30 Nov 2017 
                                                             GBP000       GBP000 
 
Retirement benefit obligation at beginning of period       (18,712)     (23,778) 
Movement in the period : 
- Total expenses charged in the income statement              (576)        (677) 
- Equalisation of Guaranteed Minimum Pension benefits       (1,160)            - 
- Contributions paid                                            551          661 
- Actuarial gains taken directly to reserves                    688          642 
- Foreign currency exchange rates                              (57)           34 
 
Retirement benefit obligation at end of period             (19,266)     (23,118) 
                                                        ===========  =========== 
 

(1) See Note 1 - Restatement of prior years

   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 Nov   30 Nov   31 May   30 Nov   30 Nov   31 May 
                        2018     2017     2018     2018     2017     2018 
 US dollar              1.28     1.35     1.33     1.30     1.32     1.35 
 Euro                   1.13     1.13     1.14     1.12     1.12     1.13 
 Australian dollar      1.75     1.78     1.76     1.78     1.70     1.74 
 
   11.     Property, plant and equipment 
 
                                      Total 
                                     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 
                                     ====== 
 
                                     GBP000 
Net book value at 1 June 2018         1,525 
Exchange rate movements                  27 
Additions                               162 
Disposals                              (37) 
Depreciation                          (238) 
Net book value at 30 November 2018    1,439 
                                     ====== 
 

The Group had no capital expenditure which had been contracted but had not been provided for as at 30 November 2018 (2017: GBPnil).

   12.     Intangible assets 
 
                                               Total 
                                              GBP000 
Carrying value at 1 June 2017                 27,696 
Exchange rate movements                         (90) 
Additions                                      4,100 
Additions through business combinations        4,720 
Amortisation                                 (3,620) 
Carrying value at 30 November 2017            32,806 
                                             ======= 
 
                                              GBP000 
Carrying value at 1 June 2018                 33,244 
Exchange rate movements                          338 
Additions                                      4,362 
Amortisation of acquired intangible assets     (299) 
Amortisation of other intangible assets      (4,156) 
Carrying value at 30 November 2018            33,489 
                                             ======= 
 
   13.     Asset held for sale 

As at 31 May 2018, the freehold land and buildings in Sparkford, UK, were reclassified as an asset held for sale. The Directors have concluded that it is still appropriate to classify the freehold land and buildings property as an asset held for sale at 30 November 2018.

During the prior period to 30 November 2017, a freehold property in Nashville, US, was reclassified as an asset held for sale. At 30 November 2017, the property was under offer and was subsequently sold on 15 December 2017.

   14.     Related party transactions 

During the six months to 30 November 2018 there were no material related party transactions or material changes to the arrangements with related parties as reported in the Annual Report 2018.

   15.     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 :

- Both Brexit and the wider UK and Global economic outlook, 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 2018 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 (pages 22 - 23) 
   --        The processes adopted by the Board to identify and monitor risk (page 35) 
   --        The Group's principal financial risks and uncertainties (pages 83 - 84) 

A copy of the Annual Report 2018 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 Report and Accounts of Haynes Publishing Group P.L.C. for the 6 month period ended 30 November 2018. 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 2018; 

-- 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 Report and Accounts 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 Report and Accounts, including the interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Report and Accounts 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 Report and Accounts 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 Report and Accounts and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

Bristol

23 January 2019

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 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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January 24, 2019 02:33 ET (07:33 GMT)

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