We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Redhall Group Plc | LSE:RHL | London | Ordinary Share | GB0001112035 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMRHL
RNS Number : 5249Y
Redhall Group PLC
06 December 2017
Hot Features
Premium
For immediate release 6 December 2017
Redhall Group plc
("Redhall" or the "Company")
Preliminary Results
Redhall Group plc (AIM: RHL), the high integrity manufacturing and services group, announces its preliminary results for the year ended 30 September 2017.
Highlights:
-- Adjusted operating profit GBP1.4 million (2016: GBP0.9 million); GBP3.6 million before deduction of central costs of GBP2.2 million (2016: GBP3.3 million)
-- Overall net margin before central costs of 9.3% (2016: 7.5%) -- Order book GBP32 million (December 2016: GBP27 million) with strong tender pipeline
-- Group turnover GBP38.9 million (2016: GBP43.8 million), showing underlying increase after adjusting for cessation of marine contract
-- Operating exceptional costs of GBP1.1 million (GBP0.7 million closure costs) -- Group loss for the year amounted to GBP1.4 million (2016: loss of GBP1.7 million)
-- Net cash of GBP0.1 million (2016: net debt GBP8.2 million) following GBP9.5 million placing and GBP3.75 million debt conversion
-- Investment of GBP1.2 million in new equipment, process improvement and 3D design -- The Board is pleased with the overall progress achieved in the year
Martyn Everett, Chairman of Redhall, commented:
"The Board continues to see considerable opportunities for its manufacturing and services business. This is reflected in a significant volume of tenders, received by Booth Industries and Jordan Manufacturing, in our key nuclear defence, decommissioning and new build markets. We also see strong demand for our food process manufacturing and installation and mobile networks businesses."
Contact details:
Redhall Group plc Tel: +44 (0) 1924 385 386 Phil Brierley, Chief Executive Chris Kelly, Group Finance Director Buchanan Mark Court, Sophie Wills, Gemma Mostyn-Owen Tel: +44 (0) 20 7466 5000 GCA Altium, NOMAD and Financial Advisors Tim Richardson, Simon Lord Tel: +44 (0) 845 505 4343 WH Ireland, Broker Adrian Hadden, Ed Allsopp Tel: +44 (0) 20 7220 1666
CHAIRMAN'S STATEMENT
Redhall's strategic transformation into a focused high integrity Manufacturing and Services group, working in complex, secure and hazardous environments, gained momentum in 2017. A growing proportion of the Group's order book is now manufactured product, principally for the nuclear sector. The Board has focused on delivering improvements in profitability and operational performance during the year to build a robust platform for a sustained period of growth. Jordan Manufacturing's success in being awarded preferred bid status on the GBP8 million marine works at Hinkley Point C illustrates the Group's strategic progress.
In July 2017, and in response to the growing momentum of the Group's recovery, GBP9.5 million (before expenses) of new equity was successfully raised, at a premium, through an oversubscribed placing and additionally GBP3.75 million of debt was converted to equity. The fund raising provided increased working capital to deliver our order book as work moved from engineering to manufacturing in the second half. The order book stands at GBP32 million, up 19 per cent. compared with GBP27 million in December 2016. The order book comparison excludes the Redhall Marine contract with BAE which concluded in January 2017.
Trading result
Revenue in the year ended 30 September 2017 from continuing operations was GBP38.9 million (2016: GBP43.8 million). Adjusted operating profit before exceptional items was GBP1.4 million (2016: GBP0.9 million). Adjusted diluted earnings per share for the continuing business amounted to 0.20 pence per share (2016: nil). The result was impacted by delays in major projects at the end of our financial year as announced in October 2017. Despite the outturn being below our original expectation, we are pleased with the progress achieved in the year.
The Group loss for the year was GBP1.4 million (2016: loss of GBP1.7 million) which represents a loss of 0.59 pence per share (2016: loss of 0.83 pence).
Exceptional items
Exceptional costs for the continuing business of GBP1.1 million, comprised GBP0.7 million relating to the closure of the remaining element of our RBC business including the loss on sale of a long leasehold property and GBP0.4 million of management reorganisations in the manufacturing businesses as we continued to improve their capabilities and management teams.
We exited our final contract in nuclear site-based contracting and agreed all final accounts. This resulted in a write down of GBP0.3 million, which represents the exceptional loss for discontinued operations, and will generate GBP0.7 million of cash of which GBP0.5 million will be collected early in our 2018 financial year.
Total exceptional costs in the year ended 30 September 2016 amounted to GBP1.4 million.
Financial position
It is very pleasing to be able to report that, following the placing and debt conversion in July and the capital reduction in September, the Group balance sheet is now considerably improved. Four-year bank facilities with HSBC Bank plc and funds managed by Lombard Odier Investment Management (LOIM) amounting to GBP7.2 million plus a further GBP2.5 million accordion facility were agreed in July 2017. At the year end the Group had net cash of GBP0.1 million (2016: net debt of GBP8.2 million).
Net assets at 30 September 2017 were GBP30.0 million (2016: GBP15.5 million) reflecting the net proceeds of the placing and the debt conversion of GBP12.6 million and a reduction in the pension deficit of GBP3.3 million partially offset by the retained loss for the year of GBP1.4 million. The pension deficit of GBP0.5 million (2016: GBP3.8 million) reflects improvements in yields and investment performance and changes in mortality assumptions.
Dividend
The Board is not recommending a dividend for the year to 30 September 2017 (2016: nil).
Whilst the Board has no current intention of resuming dividend payments, the capital reduction which took place in September created a positive balance of GBP15.9 million on the Group profit and loss account, which provides it with the flexibility to pay dividends at the appropriate time in the future.
People
In the past three years the Group board has been committed to delivering the Strategic Turnaround Plan which included de-risking the Group by exiting from capital intensive, low margin contracting activities; strengthening the balance sheet and financial resources of the Group through the disposal of the Engineering Division, sale of assets, recovery of work in progress on legacy projects and fundraisings; refocusing the Group's activities onto high integrity manufactured products and services for delivery into complex environments; and establishing the Group in key growth markets, particularly nuclear but also large infrastructure projects such as Crossrail.
The Board considers that the turnaround is complete, and the strategy is now focused on investment, improvement and growth in our core manufacturing businesses. With the completion of the turnaround, Phil Brierley has decided to step down from the role of Chief Executive on 31 March 2018. He will be succeeded by Wayne Pearson, currently the Group's Chief Operating Officer, who is an operationally focused executive with a background in manufacturing. To ensure a smooth handover of responsibilities Phil will remain with the Group in an advisory role until the end of 2018.
I would like to thank Phil for the tremendous commitment he has given in delivering the turnaround strategy and in positioning the business for future growth.
The Board receives great support from our employees and are very grateful to them for their commitment. We have commenced a management development programme for our senior employees and have engaged teams at all levels in business and process improvement projects during the year enabling them to make a strong contribution to the implementation of our strategy.
Prospects
The Board continues to see considerable opportunities for its manufacturing and services business. This is reflected in a significant volume of tenders, received by Booth Industries and Jordan Manufacturing, in our key nuclear defence, decommissioning and new build markets. We also see strong demand for our food process manufacturing and installation and mobile networks businesses.
Martyn Everett
Chairman
6 December 2017
STRATEGIC REPORT
Overview
As the Group moves beyond the turnaround plan of the last three years, the focus of the 2017 financial year has been on putting in place the building blocks to deliver investment, improvement and growth in our high integrity manufacturing businesses.
During the year under review, the Group achieved many of its targets including:
-- Further improvement in the size and quality of its forward order book. This stands at GBP32m (2016: GBP27m) with a greater proportion of the order book derived from high integrity manufacturing projects particularly in nuclear defence, decommissioning and nuclear new build;
-- An improving pipeline of tendered opportunities with high probabilities of conversion particularly in respect of longer term nuclear projects;
-- Strengthening the leadership team with particular focus on enhancing operational and manufacturing management expertise, most significantly with the appointment in July 2017 of Wayne Pearson as Chief Operating Officer. Wayne will be appointed Chief Executive at the end of March next year;
-- The strengthening of the Group's finances and balance sheet through raising GBP9.5 million (before expenses) of new equity and conversion of GBP3.75 million of debt to equity in July, ensuring that the Group has the financial resources to invest in process improvement, plant and equipment, facilities and automation to achieve growth in its core manufacturing markets;
-- The order for Hinkley Point C completes our penetration into all three of the Group's key nuclear markets, being defence, decommissioning and civil new build; and
-- The restructuring of the Group's balance sheet through the capital reduction which completed in September, and resulted in positive retained earnings of GBP15.9 million. This will allow the Group to pay dividends at an appropriate point in the future and enhances the attractiveness of the Company's shares.
The Group made an adjusted operating profit on continuing operations of GBP1.4 million (2016: GBP0.9 million) on revenue of GBP38.9 million (2016: GBP43.8 million), representing a net adjusted operating margin of 3.7% (2016: 2.0%). As detailed in the Group's trading update issued on 4 October 2017, this performance is below earlier initial expectations for the year, due principally to customer delays particularly on the Hinkley Point C project. Despite this, it is pleasing that it still marks an improvement over the 2016 financial year in terms of adjusted operating profit and adjusted net operating margin. Before deducting Group and central services costs the adjusted profit amounted to GBP3.6 million (2016: GBP3.3 million).
The Board believes that the Group's turnaround is complete, and its strategic focus is now investment, improvement and growth in our manufacturing businesses. The opportunities in our core markets are considerable and we are particularly encouraged by the size of the markets in nuclear decommissioning and new build.
We recognise that the future growth strategy requires a different type of expertise than the turnaround and corporate restructuring that has been the principal focus of the last three years. During our 2018 year we will progressively bring in further high calibre manufacturing and operational expertise to the leadership team.
Health and Safety
The health and safety of our employees and those who may be affected by our business remains our highest priority. All of our subsidiaries have accredited management systems to control health and safety risks to OHSAS 18001 and environmental management systems certified to BS EN ISO 14001.
During the year, our subsidiaries once again applied for health and safety awards from The Royal Society for the Prevention of Accidents (RoSPA), which recognises high or very high levels of performance. All our businesses obtained a minimum of the Gold Award.
Trading
We believe that our Group companies are leaders in their respective markets and work with many of the key players within these markets. The focus of the Group is now on performance improvement and growth through cultivating customer relationships, devising bid winning strategies and delivering our quality products and services efficiently.
Booth Industries
Booth had a particularly strong second half in this financial year. A number of projects that had been in design for several months were released onto the shop floor resulting in an increase in turnover and performance.
We invested GBP1.0 million in developing intangible assets and purchasing equipment during the year and are now starting to see some of the productivity benefits of this investment. By way of example our engineering output is significantly higher as a result of migrating all our core engineered doors onto 3D CAD models. We also invested in a laser cutting machine which has reduced lead times considerably.
Delivery in the year was dominated by the manufacture of highly engineered doors for defence projects, predominately in the nuclear sector and the design and manufacture of doors for Crossrail stations and tunnels.
These sectors are heavily represented in our bid pipeline where the largest elements are high integrity nuclear and tunnel doors. The delivery of the current order book in the first half of 2018 and conversion of the bid pipeline for the second half and beyond are key focuses for the business in the current year.
Jordan Manufacturing
Jordan Manufacturing suffered as a result of the delayed start to the works on the Hinkley Point C project which materially impacted the outturn for the year. The contract, estimated to be in excess of GBP8 million, is expected to be delivered in full before the end of our 2018 financial year.
The Group remains very confident in the future prospects for this business. The Hinkley Point C project gives the business good visibility throughout 2018 and as a result of significant bid activity this year, we have a substantial pipeline of quality tendered projects which we remain optimistic of securing. We are also confident that Jordan will have the opportunity to secure a number of larger, long term nuclear contracts that will give us a strong baseload of future work.
Redhall Jex
Redhall Jex performed well in the second half of the 2017 year, helped by the delivery of a GBP2.8 million order for a key client. This project has extended into 2018 and its scope has increased to over GBP4.7 million. Coupled with the fact that all our major customers have capital spend programmes for 2018, this means that Redhall Jex is likely to perform above 2017 levels.
Since the year end we made the decision to consolidate the activities of Redhall Jex in Grimsby into our Trafford Park facility in Manchester. This will make the overall operation more efficient and better controlled as well as reducing overheads. Most of the customer relationships are already held in Manchester.
Redhall Networks
Our networks business had another strong year as it continued to benefit from high volumes of new and upgrade works to the national cellular infrastructure. The long-term outlook is encouraging with mobile operators installing more technologies, disentangling shared sites, upgrading, replacing and reviewing their estates. We are confident, therefore, that the robust performance in Redhall Networks will continue.
Exceptional items
During the year we incurred GBP1.1 million of exceptional operating costs in our continuing businesses. These principally comprised of the costs incurred in the closure of the remaining element of the RBC business (including redundancies and the loss on sale of a property held by this business) and the costs incurred in further restructuring the senior management in the Group's manufacturing subsidiaries as we continue to improve our capabilities.
The Group also incurred GBP0.3 million of exceptional costs relating to discontinued operations. These are non-cash costs which relate to the settlement of legacy final accounts. With the exception of agreeing the Redhall Marine account with BAE, on which work concluded during the year, these legacy accounts are now all agreed.
Outlook
We are pleased with the strategic progress achieved in the financial year. The strengthening of our manufacturing expertise, the further improvement in the quality of order book, an increasing pipeline of high quality opportunities and increasing adjusted operating profit margin give the Board reason for cautious optimism for 2018 and beyond.
In our businesses, we await decisions on a number of sizable bids. Within this tendered pipeline are contracts and frameworks which span many years. We are confident that the likely conversions will provide the Group with a good revenue stream for years to come.
Whilst nuclear defence, decommissioning and new build are key markets in which we are submitting an increasing number of bids, we are also devoting resource to large and complex infrastructure schemes, building on the expertise gained in projects such as Crossrail as we look to secure future contracts for HS2, Crossrail 2 and several international tunnel projects. Whilst capital spend within the oil and gas sector continues to be constrained, we are seeing the first signs of increased activity in this market. It is unlikely that this will have a material impact on our 2018 year but we are once again encouraged to be submitting tenders for live schemes.
The cellular networks market remains buoyant with sufficient activity from the operators for the Group to be optimistic that this will continue for the foreseeable future. The operations in this business are well managed and we expect that it will remain a significant contributor in 2018.
The major food customers of Redhall Jex have committed spend programmes for this year and although this will need to be converted into orders we are confident that the performance of the second half of 2017 will continue through into 2018.
In support of our efforts to achieve growth in our order book, we aim to invest heavily in product development and equipment and to automate many of our activities to keep the Group at the forefront of its chosen markets. We continue to invest in our people, increasing the access they have to learning and development opportunities to create the highest calibre teams.
Our 2018 financial year is another important phase in the delivery of the Group's strategic plans and for Redhall as a high integrity manufacturing and services business serving secure, hazardous and complex environments. The Group's ambitions are to deliver a strong performance, further building shareholder value.
Phil Brierley
Chief Executive
6 December 2017
CONSOLIDATED INCOME STATEMENT
Year to 30 September Year to 30 September
2017 2016
Before Exceptional Before Exceptional
exceptional items exceptional items
Note items (Note 2) Total items (Note 2) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 1 38,905 - 38,905 43,823 - 43,823
Cost of sales (29,066) (243) (29,309) (33,739) (164) (33,903)
================== =========== ============ ======== ================= ================== ============
Gross profit 9,839 (243) 9,596 10,084 (164) 9,920
Administrative
expenses (9,083) (841) (9,924) (9,924) (233) (10,157)
================== =========== ============ ======== ================= ================== ============
Operating
profit/(loss) 1 756 (1,084) (328) 160 (397) (237)
=========== ============ ======== ================= ================== ============
Continuing
businesses 3,632 (1,084) 2,548 3,295 (287) 3,008
Central costs (2,202) - (2,202) (2,439) (110) (2,549)
================== =========== ============ ======== ================= ================== ============
Adjusted operating
profit/(loss)* 1,430 (1,084) 346 856 (397) 459
Amortisation of
acquired
intangible assets (287) - (287) (323) - (323)
IFRS 2 charge (387) - (387) (373) - (373)
================== =========== ============ ======== ================= ================== ============
Operating
profit/(loss) 756 (1,084) (328) 160 (397) (237)
================== =========== ============ ======== ================= ================== ============
Financial expenses 3 (857) - (857) (857) - (857)
================== =========== ============ ======== ================= ================== ============
Loss before tax
from
continuing
operations (101) (1,084) (1,185) (697) (397) (1,094)
Tax credit 4 81 - 81 407 - 407
================== =========== ============ ======== ================= ================== ============
Loss on continuing
operations (20) (1,084) (1,104) (290) (397) (687)
Loss on
discontinued
operations net of
tax - (265) (265) - (983) (983)
================== =========== ============ ======== ================= ================== ============
Loss attributable
to
equity holders
=========== ============ ======== ================= ================== ============
of the Parent
Company (20) (1,349) (1,369) (290) (1,380) (1,670)
================== =========== ============ ======== ================= ================== ============
Loss per share 6
Basic (0.59)p (0.83)p
Diluted (0.59)p (0.83)p
*Adjusted operating profit/(loss) is profit/(loss) before financial expenses, IFRS 2 charge, tax and amortisation of intangible assets acquired with business combinations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
30 September 30 September
Note 2017 2016
GBP000 GBP000
Loss for the year (1,369) (1,670)
Other comprehensive income:
Items that will not be reclassified
to profit or loss:
Remeasurement of defined benefit
liability 7 3,234 (1,963)
Tax on actuarial gain 4 (566) 318
Revaluation gains on fixed assets 5 - 46
======================================= ==== ============ ============
Other comprehensive income for the
year net of tax 2,668 (1,599)
======================================= ==== ============ ============
Total comprehensive income attributable to
equity holders of the Parent Company 1,299 (3,269)
============================================= ============ ============
The accompanying notes form part of these financial statements.
CONSOLIDATED BALANCE SHEET
As at As at
30 September 30 September
Note 2017 2016
GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 2,488 2,648
Intangible assets 2,569 2,732
Purchased goodwill 18,305 18,305
Deferred tax asset 5 1,021 1,032
=============================== ==== ============ ============
24,383 24,717
Current assets
Inventories 626 636
Trade and other receivables 13,778 11,452
Cash and cash equivalents
and overdraft 2,370 1,021
Assets held for sale 141 -
=============================== ==== ============ ============
16,915 13,109
Liabilities
Current liabilities
Trade and other payables (8,645) (9,217)
Borrowings and overdraft (266) -
Current tax payable - (19)
=============================== ==== ============ ============
(8,911) (9,236)
Non-current liabilities
Borrowings (1,969) (9,269)
Retirement benefit obligations 7 (450) (3,796)
=============================== ==== ============ ============
(2,419) (13,065)
=============================== ==== ============ ============
Net assets 29,968 15,525
=============================== ==== ============ ============
Shareholders' equity
Share capital 12,297 12,284
Share premium account - 28,326
Merger reserve - 12,679
Revaluation reserve 102 102
Other reserve 1,690 1,389
Retained earnings 15,879 (39,255)
=============================== ==== ============ ============
Total equity 29,968 15,525
=============================== ==== ============ ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Revaluation Other Retained
capital premium reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2015 12,284 28,326 12,679 102 1,177 (35,986) 18,582
Employee share-based compensation - - - - 212 - 212
================================================================== ======= ======== ======== =========== ======= ======== =======
Transactions with owners - - - - 212 - 212
======= ======== ======== =========== ======= ======== =======
Loss for the year - - - - - (1,670) (1,670)
Other comprehensive income for
the year - - - - - (1,599) (1,599)
================================================================== ======= ======== ======== =========== ======= ======== =======
Total comprehensive income for
the year - - - - - (3,269) (3,269)
At 30 September 2016 12,284 28,326 12,679 102 1,389 (39,255) 15,525
======= ======== ======== =========== ======= ======== =======
Share capital issued during
the year net of expenses 13 12,608 - - - - 12,621
Capital reduction net of expenses - (40,934) (12,679) - - 53,583 (30)
Employee share-based compensation
- current year 221 221
- prior
year
amounts
realised - - - - (11) - (11)
Employee share based compensation
- deferred tax - - - - 343 - 343
================================================================== ======= ======== ======== =========== ======= ======== =======
Transactions with owners 12,297 - - 102 1,942 14,328 28,669
Loss for the year - - - - - (1,369) (1,369)
Movement between reserves (252) 252 -
Other comprehensive income for
the year 2,668 2,668
================================================================== ======= ======== ======== =========== ======= ======== =======
Total comprehensive income for
the year - - - - (252) 1,551 1,299
At 30 September 2017 12,297 - - 102 1,690 15,879 29,968
================================================================== ======= ======== ======== =========== ======= ======== =======
Other reserves comprise share based compensation GBP420,000 (2016: GBP462,000), equity reserve relating to the grant of options on conversion of debt during the prior year GBP925,000 (2016: GBP925,000) deferred tax of GBP343,000 and other reserves of GBP2,000 (2016: GBP2,000). An amount of GBP252,000 has been transferred to retained earnings in respect of previously lapsed options.
On 21 September, the Company announced that a court order and a statement of capital approved by the court had been registered with the Registrar of Companies. The Company issued and immediately cancelled bonus shares to a value of GBP12,679,000 to capitalise the amount standing to the credit of the Company's merger reserve. The court order had the effect of reducing the share premium to nil with the balance transferred to the profit and loss account.
CONSOLIDATED CASH FLOW STATEMENT
Year to Year to
30 September 30 September
Note 2017 2016
GBP000 GBP000
Cash flows from operating activities
Loss after taxation (1,369) (1,670)
Adjustments for:
Depreciation 392 331
Amortisation of intangible assets 447 415
Difference between pension charge and
cash contributions (88) (196)
Loss on disposal of property, plant
and equipment 210 -
Share-based payments charge* 210 212
Financial income - -
Financial expenses 857 857
Deferred tax credit (81) (514)
(Increase)/decrease in trade and other
receivables (2,511) 3,516
Decrease/(increase) in inventories 10 (119)
Decrease in trade and other payables (641) (4,407)
================================================== ============ ============
Cash absorbed by operations (2,564) (1,575)
Interest paid (807) (792)
================================================== ============ ============
Net cash absorbed by operating activities (3,371) (2,367)
================================================== ============ ============
Cash flows from investing activities
Purchase of property, plant and equipment (883) (478)
Purchase of intangible assets (284) (355)
Proceeds from disposal of fixed assets 300 -
Proceeds from disposal of assets held
for sale - 440
================================================== ============ ============
Net cash used in investing activities (867) (393)
================================================== ============ ============
Cash flows from financing activities
Proceeds from issue of share capital
(net of costs incurred) 8,871 -
Finance lease borrowing 384 -
Repayment of finance leases (61) -
Proceeds from borrowings 197 9,744
Repayment of facility - (5,745)
Repayment of long-term borrowing (3,804) (905)
============================================ ===== ============ ============
Net cash generated by financing activities 5,587 3,094
============================================ ===== ============ ============
Net increase in cash and cash equivalents 1,349 334
Cash and cash equivalents at beginning
of year 1,021 687
============================================ ===== ============ ============
Cash and cash equivalents at end of
year 2,370 1,021
============================================ ===== ============ ============
*IFRS 2 amount charged to reserves net of employer's national insurance
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SEGMENT ANALYSIS
IFRS 8 "Operating Segments" requires an entity to report on those operating segments that engage in business activities from which it may earn revenues and incur expenses; whose operating results are regularly reviewed by the chief operating decision maker ("CODM"); and for which discrete financial information is available. The CODM has been identified ultimately as the Board of Directors.
The Board, following cessation of work by Redhall Marine, considers that the Group now comprises one segment and this is how the CODM reviews performance and allocates resources. The comparatives have been restated to reflect this. The Group's businesses are all market leaders in the provision of high integrity manufacturing and services delivered into complex and hazardous environments, share resources and have similar characteristics.
The Board assess the performance of the operating segments based on a measure of operating profit or loss which excludes the effects of exceptional items. Central costs and unallocated items represent head office functions and items such as amortisation of acquired intangible assets arising on the acquisition of businesses. Central costs include the costs of the Group's centralised Finance, IT and HR functions.
Site Services
During the second half of the year ended 30 September 2015, the activities of the Site Services segment were discontinued.
Continuing operations
Geographical segments
2017 2016
GBP000 GBP000
Revenue by destination
United Kingdom 34,318 41,833
Other European Union countries 2,794 953
Other overseas locations 1,793 1,037
==================================================== ====== ======
38,905 43,823
==================================================== ====== ======
All of the Group's assets and capital expenditure
originate in the United Kingdom.
Analysis of revenue by category
All of the revenue of the Group relates to
the provision of high integrity manufacturing
and services delivered into complex and hazardous
environments.
Practically all of the Group's revenue is considered to be contract revenue as defined by IAS 11.
Customers accounting for more than 10% of revenue
One customer accounted for more than 10% of revenue in the year and accounted for revenue of GBP5.0 million (2016: one customer accounting for GBP10.2 million of revenue).
2. EXCEPTIONAL ITEMS
The Board has separately identified, by virtue of their size or incidence, certain credits and charges to the consolidated income statement that should be separately disclosed to enable users of the financial statements to better understand the underlying performance of the Group:
Continuing operations
2017 2016
GBP000 GBP000
Cost of sales
Business closure costs 243 -
Other redundancy and restructuring
costs - 15
Provisions against contracts - 149
243 164
=================================== ====== ======
Administrative expenses
Business closure costs 205 -
Other redundancy and restructuring
costs 429 233
Loss on disposal of properties 207 -
841 233
=================================== ====== ======
Exceptional items before tax 1,084 397
Tax credit - -
Exceptional items after tax 1,084 397
=================================== ====== ======
Business closure costs represents the costs of closure of R Blackett Charlton. It includes redundancy and disruption costs (GBP243,000) and asset write-downs and related property costs (GBP412,000).
Other redundancy and restructuring costs reflect the costs of resizing the businesses. These are split between cost of sales and administrative expenses on the basis of the function of the business to which they relate.
Discontinued operations
Exceptional costs relate to final account settlements of GBP265,000 (2016: GBP983,000 - relates to account settlements and redundancy and restructuring costs).
3. FINANCIAL INCOME AND EXPENSES
2017 2016
GBP000 GBP000
Financial expenses
Interest on loans and overdrafts (632) (703)
Net finance expense on pension scheme* (225) (154)
======================================= ====== ======
(857) (857)
*Includes GBP135,000 of pension administration expenses paid for by the Company (2016: GBP85,000).
4. TAX EXPENSE
2017 2016
GBP000 GBP000
(a) Recognised in the income statement
Current tax charge:
Current year 66 -
Adjustment in respect of prior years 65 107
================================================== ======= =======
Current tax charge 131 107
Deferred tax credit (90) (312)
Effect of change of tax rate (13) 96
Prior years (109) (298)
================================================== ======= =======
Deferred tax credit (212) (514)
================================================== ======= =======
Tax credit in the income statement (81) (407)
================================================== ======= =======
2017 2016
GBP000 GBP000
(b) Reconciliation of the effective tax rate
Loss before tax - continuing operations (1,185) (1,094)
Loss before tax - discontinued operations (265) (983)
================================================== ======= =======
Loss before tax (1,450) (2,077)
================================================== ======= =======
Tax at standard rate of UK corporation tax
of 19.5% (2016: 20.0%) (283) (415)
Expenses not deductible for tax purposes 39 48
Income not taxable for tax purposes (3) (31)
Tax losses not recognised 245 86
Adjustments in relation to prior periods (44) (191)
Change in tax rate (13) 96
Share options 34 -
Other (56) -
================================================== ======= =======
Tax credit in the income statement (81) (407)
================================================== ======= =======
Tax credit in the income statement - continuing
operations (81) 407
2017 2016
GBP000 GBP000
(c) Deferred tax charge/(credit) recognised
in other comprehensive income
On actuarial gain/(loss) 566 (318)
Accelerated capital allowances - (46)
================================================== ======= =======
566 (364)
(d) A deferred tax credit of GBP343,000 (2016: nil) is included
in equity relating to share based payments
5. DEFERRED TAX ASSETS AND LIABILITIES
Recognised deferred tax assets and liabilities
The net deferred tax asset at the year-end and movement during the year is analysed as follows:
Credit/(charge)
to
Balance as Disposal Balance as
at Consolidated Credit of at
1 October 2016 Income directly to 30 September
Statement equity investment 2017
GBP000 GBP000 GBP000 GBP000 GBP000
Accelerated capital
allowances/ 262 110 - - 372
revaluation gains
on fixed assets
Short term timing
differences 123 142 - - 265
Losses 656 (150) - - 506
Intangible assets (651) 39 - - (612)
Retirement benefits 642 - (566) - 76
Share options - 71 343 414
==================== ========== ================ =============== ========== ============
1,032 212 (223) - 1,021
==================== ========== ================ =============== ========== ============
Credit/(charge)
to
Balance as Disposal Balance as
at Consolidated (Charge)/credit of at
1 October directly to 30 September
2015 Income Statement equity investment 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Accelerated capital
allowances/ 170 46 46 - 262
revaluation gains
on fixed assets
Short term timing
differences 30 93 - - 123
Losses 528 128 - - 656
Buildings (160) 160 - - -
Intangible assets (803) 152 - - (651)
Retirement benefits 389 (65) 318 - 642
==================== ========== ================ =============== ========== ============
154 514 364 - 1,032
---------------- --------------- ---------- ------------
Unrecognised deferred tax assets
Deferred tax assets have not been recognised on tax losses of GBP18,450,000 (2016: GBP16,200,000) as their recovery is insufficiently certain in the longer term. GBP14,900,000 are related to the discontinued site services segment.
Effect of reduction in the main rate of Corporation tax
The reduction in the main rate of corporation tax from 19% to 17% was substantively enacted on 6 September 2016. This will have effect from 1 April 2020. Accordingly, deferred tax balances have been recognised at the reduced rate of 17% in these financial statements.
6. LOSS PER SHARE
Basic and diluted loss per share
The calculation of the basic loss per share of 0.59p (30 September 2016: loss per share 0.83p) is based on 232,080,273 shares (30 September 2016:
200,050,084) being the weighted average number of shares in issue throughout the period and on a loss of GBP1,369,000 (30 September 2016: loss of GBP1,670,000).
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted loss per share for both the year ended 30 September 2017 and 30 September 2016 are identical to those used for the basic loss per share. This is because the exercise of share options would have the effect of reducing the loss per share and is, therefore, not a dilution under the terms of IAS 33. At 30 September 2017 there were 28,640,436 outstanding options under relevant schemes and 18.5 million shares under option to funds managed by LOIM. These may impact dilutive earnings per share in future.
Adjusted earnings per share
The Directors believe that helpful additional earnings per share calculations are earnings per share on adjusted bases (i.e. based on profit before exceptional items, IFRS 2 charge and amortisation of acquired intangible assets and on a fully taxed basis). The impact of the dilutive share options is taken into account where these measures result in earnings per share. The basic and adjusted weighted average numbers of shares and the adjusted earnings have been calculated as follows:
2017 2016
Number Number
Basic weighted average number of shares 232,080,273 200,050,684
Dilutive potential ordinary shares arising
from share options 45,151,395 -
=============================================== =========== ===========
Adjusted weighted average number of shares 277,231,668 200,050,684
=============================================== =========== ===========
GBP000 GBP000
Earnings:
Loss before tax* (1,450) (2,077)
Exceptional items 1,349 1,380
Amortisation of acquired intangible assets 287 323
IFRS 2 charge 387 373
=============================================== =========== ===========
Adjusted profit/(loss) before tax 573 (1)
Tax at 19.5% (2016: 20.0%) (112) -
=============================================== =========== ===========
Adjusted loss after tax 461 (1)
=============================================== =========== ===========
Adjusted, fully taxed basic profit per share 0.20p 0.00p
=============================================== =========== ===========
Adjusted, fully taxed diluted profit per share 0.20p 0.00p
=============================================== =========== ===========
Continuing operations
GBP000 GBP000
Loss before tax (1,185) (1,094)
Exceptional items 1,084 397
Amortisation of acquired intangible assets 287 323
IFRS 2 charge 387 373
=============================================== =========== ===========
Adjusted profit/(loss) before tax 573 (1)
Tax at 19.5% (2016: 20.0%) (112) -
=============================================== =========== ===========
Adjusted profit/(loss) after tax 461 (1)
=============================================== =========== ===========
Adjusted, fully taxed diluted profit/(loss)
per share 0.20p 0.00p
=============================================== =========== ===========
Discontinued operations
GBP000 GBP000
Loss before tax (265) (983)
Exceptional items 265 983
Amortisation of acquired intangible assets - -
=============================================== =========== ===========
Adjusted loss before tax - -
Tax at 19.5% (2016: 20.0%) - -
=============================================== =========== ===========
Adjusted loss after tax - -
=============================================== =========== ===========
Adjusted, fully taxed diluted loss per share 0.00p 0.00p
=============================================== =========== ===========
* Loss before tax from continuing operations plus loss on discontinued operations net of tax.
7. RETIREMENT BENEFIT OBLIGATION
The Group sponsors a defined benefit pension scheme in the United Kingdom, the Booth Industries Group PLC Staff Pension and Life Assurance Scheme ("the Booth Scheme") and operates a small number of defined contribution pension schemes and makes contributions to personal pension plans.
a) Defined benefit scheme
Pension benefits are linked to the members' final pensionable salaries and service at their retirement date (or date of leaving if earlier). The scheme is closed to new entrants. The scheme is governed by a Board of Trustees who meet on a quarterly basis. The Group has opted to recognise all actuarial gains and losses immediately through the Consolidated Statement of Comprehensive Income.
The most recent formal actuarial valuation was carried out as at 6 April 2015. The results of this valuation have been updated to 30 September 2017 by an independent qualified actuary. The assumptions used were as follows:
Assumptions
The following were the principle actuarial assumptions at the reporting date:
2017 2016
Discount rate 2.80% 2.40%
Retail Prices Index
(RPI) inflation 3.10% 3.00%
Consumer Prices Index
(CPI) inflation 2.00% 2.00%
Salary increases n/a n/a
Rate of increases to pensions in payment
subject to inflationary increases:
- RPI capped at 5%
pa 3.00% 2.90%
- RPI capped at 2.5%
pa 2.30% 2.30%
- CPI capped at 3%
pa 1.80% 1.80%
- CPI capped at 5% pa with
minimum 3% pa 3.10% 3.10%
Revaluation of deferred pensions
(non-GMP) 2.00% 2.00%
Mortality basis pre
and post retirement 130% S2PMA/S2PFA 100% S2PMA/S2PFA
+ 2 years
CMI 2015 with
CMI 2016 with a a
long term rate long term
of rate of
improvement improvement
of 1% pa of 1% pa
Allowance for cash
commutation 95% of maximum 95% of maximum
Proportion married 80% for males 80% for males
70% for females 70% for females
Asset class 2017 2016
% of total % of total
Market value scheme assets Market value scheme assets
GBP000 GBP000
Equities 12,763 56% 12,167 54%
Diversified growth
funds 1,639 7% 996 5%
Bonds 2,221 10% 2,285 10%
Gilts 3,234 14% 4,051 18%
Liability driven
investment 1,003 4% 1,134 5%
Property 1,812 8% 1,662 7%
Cash 227 1% 162 1%
===================== ============ ============= ============ =============
Total 22,899 100% 22,457 100%
===================== ============ ============= ============ =============
Actual return on
assets over period 1,578 3,029
Pension expense
Amounts recognised within administrative expenses
within the income statement are:
2017 2016
GBP000 GBP000
Charge for current service cost - (49)
Administration costs (52) (52)
================================================== ====== ======
(52) (101)
================================================== ====== ======
Following the 6 April 2015 valuation the Company agreed to pay annual contributions of GBP365,000 for the year to 5 April 2016, followed by contributions of GBP140,000 for the following 2 years. Contributions will then increase to GBP305,000 per annum until 5 April 2027. Total employer contributions in 2017 were GBP140,000 (2016: GBP297,000).
The amounts credited/(charged) to financial
income and expense are:
2017 2016
GBP000 GBP000
Return on assets recorded as interest* 390 645
Interest on pension scheme liabilities (615) (799)
============================================ ====== ======
Net financial expense (225) (154)
====== ======
*Includes GBP135,000 of pension administration expenses paid for by the Company (2016: GBP85,000).
Total actuarial gains and losses recognised in the consolidated statement of comprehensive income
The cumulative actuarial loss recognised in the consolidated statement of comprehensive income from 1 October 2006 (being the transition date to the adoption of International Financial Reporting Standards) is GBP1,395,000 (2016: loss GBP4,743,000).
Analysis of movement in retirement benefit
obligation
2017 2016
GBP000 GBP000
Retirement benefit obligation at start of
the year 26,253 22,000
Current service cost - 49
Interest cost on retirement benefit obligation 615 799
Contributions by employees - 18
Benefits paid and transfers out (1,224) (875)
Actuarial (gains)/losses (2,295) 4,262
=============================================== ======= ======
Retirement benefit obligation at end of year 23,349 26,253
=============================================== ======= ======
Change in fair value of scheme assets during the year
2017 2016
GBP000 GBP000
Fair value at start of the year 22,457 20,040
Interest income 525 730
Actual return on assets less interest 1,053 2,299
Employer contributions 140 297
Member contributions - 18
Benefits paid (1,224) (875)
Administration costs (52) (52)
====================================== ======= ======
Fair value at end of the year 22,899 22,457
====================================== ======= ======
Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the percentage amounts shown below:
2017 2016
Change in Change in
defined
Change in defined benefit Change in benefit
Assumption assumption obligation assumption obligation
+ 8% / -
Discount rate +/- 0.5% pa + 7% / - 6% +/- 0.5% pa 7%
RPI and CPI inflation +/- 0.5% pa +3% /- 2% +/- 0.5% pa +/- 3%
Future salary increases n/a n/a n/a n/a
Assumed life expectancy + 1 year + 4% + 1 year + 4%
b) Defined contribution schemes and personal pension plans
The Group operates a small number of defined contribution pension schemes and contributes to a number of personal pension plans. The total expense for these schemes during the year was GBP428,000 (2016: GBP469,000).
8. BASIS OF PREPARATION
The financial information set out above for the years ended 30 September 2017 and 2016 ("the financial information"), has been prepared with consistent accounting policies and in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and are effective at 30 September 2017.
The financial information does not constitute the statutory financial statements (as defined by S434 of the Companies Act 2006) for those years. The 2017 financial statements, upon which the auditors issued an unqualified opinion and did not contain a statement either under sections 498(2) or 498(3) of the Companies Act 2006, have not yet been delivered to the Registrar.
The 2016 financial statements have been delivered to the Registrar and included in the auditors' report which was unqualified and did not contain a statement either under sections 498(2) or 498(3) of the Companies Act 2006.
The annual report and accounts for the year ended 30 September 2017 will be posted to shareholders. Copies will be available from the Company's registered office, Unit 3, Calder Close, Wakefield WF4 3BA and will be made available on the Company's website at www.redhallgroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GLBDDBUGBGRL
(END) Dow Jones Newswires
December 06, 2017 02:00 ET (07:00 GMT)
1 Year Redhall Chart |
1 Month Redhall Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
