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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Tclarke Plc | LSE:CTO | London | Ordinary Share | GB0002015021 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 159.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMCTO
RNS Number : 3830S
TClarke PLC
14 July 2022
TClarke plc
Half year results for the six months ended 30 June 2022
TClarke posts record half year results as it closes in on GBP500m revenue target
TClarke plc ("the Group" or "TClarke"), the Building Services Group, announces its half year results for the period ended 30 June 2022.
Business Highlights:
-- First half year revenues exceed GBP200m for the first time -- 2.9% operating margin achieved -- Interim dividend increased by 67% -- Full year 2022 revenues now expected to be circa GBP450m, ahead of market expectations -- Record forward order book of GBP586m as at 30 June 2022 -- Bonding capacity increased to support GBP500m per annum revenues -- Bank facilities extended to August 2026 Financial Highlights: 6 months to 30 June H1 2022 H1 2021 Revenue GBP206.2m GBP138.2m Operating profit (EBIT) GBP6.0m GBP2.4m Operating margin 2.9% 1.7% Profit before tax GBP5.5m GBP1.9m Earnings per share (Basic) 10.24p 3.58p Interim Dividend 1.25p 0.75p Net Cash GBP7.2m GBP2.0m Forward order book GBP586m GBP503m ---------- ----------
Earnings per share is calculated by dividing profit after tax by the weighted average number of shares in issue
Trading
Trading has continued to be strong for the first six months of 2022 with revenue up 49% compared with the corresponding period last year. Revenue growth has been experienced by all regions but has been particularly strong in London where revenues at GBP125.1m are 72% higher than in 2021. This growth is expected to continue throughout the rest of 2022 with revenues for the full year now expected to be circa GBP450m.
The growth in revenues has been supported by maintaining our operating margin close to target levels at 2.9%; again driven by the London business. London's operating margin for the first six months of the current year is 4.6% (2021 1.4%), UK South operating margin is 2.8% (2021 3.7%) and UK North operating margin is 2.7% (2021 3.7%). After deducting group costs of GBP2.0m the overall Group operating margin during the period is 2.9% (2021 1.7%).
Cash and Facilities
Good financial discipline is at the centre of our operations. Net cash is GBP7.2m as at 30 June 2022; an increase of GBP5.2m compared with 30 June 2021. Average month end net cash during H1 2022 is GBP3m.The principal cash movements are detailed in the banking facilities section of this report.
In support of our growth strategy we have now put in place banking facilities with NatWest comprising a GBP25m revolving credit facility (RCF) which extends to August 2026 and a GBP5m overdraft facility.
Many of our clients demand performance bonds to be in place as part of the contract requirements. Due to the strength of the business TClarke has at its disposal one of the largest bonding capacities when compared to our recognised peer group. This too has recently been increased to provide for a total bonding capacity of GBP65.1m.
Dividend
The Board proposes an interim dividend of 1.25p per share (2021: 0.75p per share) to be paid on 30 September 2022 to shareholders on the register at 2 September 2022. TClarke has a progressive dividend policy and is also rebalancing the split between the interim and final dividend. As a result the interim dividend now proposed has been increased by the full amount of the expected increase in total dividend for 2022.
Net Assets
Group net assets have increased by GBP8.6m in the six months to 30 June 2022 and now stand at GBP35.1m. This is principally due to the increase in retained earnings and the post-tax reduction in pension deficit.
Order Book
Our future confidence is underpinned with the success of the Group's forward order book which has been replenished and expanded and now stands at a new record of GBP586m. This is an GBP83m increase compared to the position at 30 June 2021. In addition, TClarke has many target projects and opportunities with our pipeline of current bids exceeding GBP1bn.The split of the order book is as follows:
30 June 30 June Market Sector 2022 2021 Increase GBPm GBPm % -------- -------- ---------- Infrastructure 141 93 52% -------- -------- ---------- Technology 184 132 39% -------- -------- ---------- Residential & Hotels 96 113 -15% -------- -------- ---------- Engineering Services 151 153 -1% -------- -------- ---------- Facilities Management 14 12 17% -------- -------- ---------- Total 586 503 17% -------- -------- ----------
Outlook
TClarke is moving rapidly towards achieving its 2023 GBP500m annual revenue target whilst maintaining its operating margin. The Board expects based upon the performance to date, revenues to exceed current expectations for 2022 at circa GBP450m for the full year.
Mark Lawrence, Chief Executive, commented
"With the current economic conditions, the business is rightly cautious, however the strategy we follow is of a disciplined tendering approach with early engagement with our supply chain partners and our clients which is ensuring we are not exposed to unnecessary risks.
The record half year revenues and forward order book along with the current visibility of future workloads in our target revenue streams mean TClarke now expects to deliver GBP450m revenue in 2022 and achieve its GBP500m target in 2023."
-ends-
Date: 14 July 2022
For further information contact:
TClarke plc Mark Lawrence Chief Executive Officer Trevor Mitchell Finance Director Tel: 020 7997 7400 www.tclarke.co.uk Cenkos Securities plc (Corporate Broker) Ben Jeynes (Corporate Finance) Alex Pollen (Sales) Tel: 020 7397 8900 www.cenkos.com RMS Partners Simon Courtenay Tel: 020 3735 6551
Operational Review
The Group is managed in three operational areas, London, UK South and UK North, providing nationwide coverage from twenty locations across the UK.
We focus on repeat customers and framework contracts in the following key markets:
-- Infrastructure -- Residential & Hotels -- Facilities Management -- Engineering Services -- Technologies
TClarke - London
30 06 2022 30 06 2021 GBPm GBPm Revenue 125.1 72.8 ----------- ----------- Operating profit 5.8 1.0 ----------- ----------- Operating profit margin 4.6% 1.4% ----------- ----------- Order book 3 81 346 ----------- -----------
London is the most significant of our three operating divisions and includes our combined engineering services London business, our London technology business and our off-site prefabrication facility at Stansted.
The growth in revenue has been primarily driven by our success of our data centre offering. Having successfully delivered a major data centre in the first half of the year, we expect to continue to deliver on the remaining (and larger) live data centre projects in the second half of the year.
Our core Engineering Services have also continued to perform strongly, delivering a number of high profile shell and core commercial and hotel developments, which is reflected in the 3.2% increase in operating margin from the same period of 2021.
TClarke - UK South
30 06 2022 30 06 2021 GBPm GBPm Revenue 43.6 35.4 ----------- ----------- Operating profit 1.2 1.3 ----------- ----------- Operating profit margin 2.8% 3.7% ----------- ----------- Order book 86 57 ----------- -----------
UK South operates from our offices at Birmingham, Derby, Oxford, Kimbolton, Newport, Peterborough, Portishead, Plymouth and St Austell, and is able to target a vast range of construction and facilities management opportunities across the region.
The first half of the year has seen good revenue growth compared to 2021, with strong performances in both our Security and Climate divisions. Our new Oxford office is now fully operational having started to trade in the first half of the year and is expected to deliver a profit in its first full year. Our expectation is for margins to recover during the second half of 2022, back to the UK South's normal operating margin of circa 3.7%.
TClarke - UK North
30 06 2022 30 06 2021 GBPm GBPm Revenue 37.5 30.0 ----------- ----------- Operating profit 1.0 1.1 ----------- ----------- Operating profit margin 2.7% 3.7% ----------- ----------- Order book 1 19 100 ----------- -----------
The UK North division operates from five principal locations; Liverpool, Manchester, Leeds, Newcastle and Eurocentral Scotland.
The North West has made the most significant contribution to the GBP1.0m operating profit including the successful delivery of a major engineering services project in Manchester. The operating margin has decreased by 1% compared to 2021 due to the business mix in the first half of the year. Our expectation is for the UK North to maintain an operating margin of circa 2.7% in the second half of 2022.
Pension Obligations
In accordance with IAS 19 'Employee Benefits', an actuarial gain of GBP5.5m, net of tax, has been recognised in reserves during the period, with the pension scheme deficit decreasing to GBP15.9m (30th June 2021: GBP24.5m). The decrease in the deficit is largely the result of the discount rate increasing to 3.82% (30(th) June 2021: 2.0%), partially offset by the hedging strategy employed by the scheme. In accordance with the Group's agreed deficit reduction plan, described in detail in the most recent annual report, the annual deficit reduction contribution is set at GBP1.5m for the current year, and will remain at this amount until the review of the output of the triennial actuarial valuation of the scheme which is currently in progress.
The scheme is closed to new members and the Group continues to meet its ongoing obligations to the scheme.
Banking Facilities and Cash Flow
The Group has recently renewed its banking facilities, which now comprise a GBP5m overdraft facility (previously GBP10m), repayable on demand, and a GBP25m revolving credit facility ("RCF") (previously GBP15m) expiring 31st August 2026. At 30 June 2022 the Group had drawn down GBP5m (2021: GBP15m) of the RCF and the overdraft facility was unutilised. The gross cash balance was GBP11.9m, resulting in net cash of GBP7.2m. The Group therefore has up to GBP37.2m available to support the Group's working capital flows and funding demands during the course of the year. The Group has GBP65.1m bonding facilities in place of which GBP26.3m were utilised at 30 June 2022.
The net cash figure of GBP7.2m is GBP5.2m higher than at the same time in 2021 reflecting profit for the period and other non-operating cashflows, as set out below:
GBPm --------------------------- ------ Balance 1 July 2021 2.0 --------------------------- ------ Profit after tax 9.2 Dividends (2.1) Pension deficit reduction (1.5) Employee Share Trust Share Purchase (0.5) Other 0.1 Balance at 30 June 2022 7.2 --------------------------- ------
Net Assets and Capital Structure
The Group is funded by equity capital, retained reserves and bank facilities, and there are no plans to change this. Shareholders' equity is GBP35.1m; an increase of GBP16.1m compared to 30 June 2021.
Condensed consolidated income statement Unaudited Unaudited Audited 6 Months 6 Months 12 Months to to to 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Revenue 206.2 138.2 327.1 Cost of sales (181.5) (123.0) (286.6) ----------- ----------- ----------- Gross profit 24.7 15.2 40.5 Administrative expenses (18.7) (12.8) (31.7) ----------- ----------- ----------- Operating profit 6.0 2.4 8.8 Finance costs (0.5) (0.5) (1.0) ----------- ----------- ----------- Profit before taxation 5.5 1.9 7.8 Taxation (1.1) (0.4) (1.5) ----------- ----------- ----------- Profit for the period 4.4 1.5 6.3 Earnings per share Attributable to owners of TClarke plc Basic 10.24p 3.58p 14.99p Diluted 10.17p 3.38p 13.91p Condensed consolidated statement of comprehensive income Unaudited Unaudited Audited 6 Months 6 Months 12 Months to to to 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Profit for the period 4.4 1.5 6.3 Other comprehensive income Items that will not be reclassified to profit or loss Actuarial gain on defined benefit pension scheme, net of tax 5.5 4.4 6.0 Other comprehensive income for the period, net of tax 5.5 4.4 6.0 Total comprehensive income for the period 9.9 5.9 12.3 ----------- ----------- ----------- Condensed consolidated statement of financial position Unaudited Unaudited Audited 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Non-current assets Intangible assets 25.3 25.3 25.3 Property, plant and equipment 12.5 7.6 7.5 Deferred taxation 4.4 5.2 6.4 Trade and other receivables 4.9 3.2 4.9 Total non-current assets 47.1 41.3 44.1 ----------- ----------- ----------- Current assets Inventories 0.4 0.4 0.4 Amounts due from customers under construction contracts 69.8 56.4 51.7 Trade and other receivables 39.9 37.3 52.5 Current tax receivables 0.2 0.6 0.2 Cash and cash equivalents 12.2 17.0 20.3 ----------- ----------- ----------- Total current assets 122.5 111.7 125.1 ----------- ----------- ----------- Total assets 169.6 153.0 169.2 ----------- ----------- ----------- Current liabilities Borrowings (5.0) (15.0) (15.0) Amounts due to customers under construction contracts (2.5) (1.8) (2.9) Trade and other payables (101.9) (85.8) (96.3) Obligations under leases (1.8) (1.2) (1.6) ----------- ----------- ----------- Total current liabilities (111.2) (103.8) (115.8) ----------- ----------- ----------- Net current assets 11.3 7.9 9.3 ----------- ----------- ----------- Non-current liabilities Obligations under leases (5.7) (2.0) (1.3) Deferred tax liabilities - (0.2) - Trade and other payables (1.7) (3.5) (1.7) Retirement benefit obligation (15.9) (24.5) (23.9) Total non-current liabilities (23.3) (30.2) (26.9) ----------- ----------- ----------- Total liabilities (134.5) (134.0) (142.7) Net assets 35.1 19.0 26.5 ----------- ----------- ----------- Equity attributable to owners of the parent Share capital 4.4 4.3 4.4 Share premium 4.4 3.8 4.2 Revaluation reserve 0.7 0.9 0.7
Retained earnings 25.6 10.1 17.2 ----------- ----------- ----------- Total equity 35.1 19.0 26.5 ----------- ----------- ----------- Condensed consolidated statement of cash flows Unaudited Unaudited Audited 6 Months 6 Months 12 Months to to to 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Net cash generated by / (used in) operating activities (see note 5A) 5.3 (5.3) (0.6) ----------- ------------- ----------- Investing activities Purchase of property, plant and equipment (0.6) (0.1) (0.4) Net cash used in investing activities (0.6) (0.1) (0.4) Financing activities New shares issued 0.2 0.5 Facility fee - - (0.1) Repayment of bank borrowing (10.0) - - Equity dividends paid (1.8) (1.5) (1.9) Acquisition of shares by ESOT (0.5) (0.5) (0.9) Repayment of lease obligations (0.7) (0.8) (1.5) Net cash used in financing activities (12.8) (2.8) (3.9) ----------- ------------- ----------- Net decrease in cash and cash equivalents (8.1) (8.2) (4.9) Cash and cash equivalents at beginning of period 20.3 25.2 25.2 ----------- ------------- ----------- Cash and cash equivalents at end of period (see note 5) 12.2 17.0 20.3 ----------- ------------- ----------- Condensed consolidated statement of changes in equity For the six months ended 30th June 2022 Share Share Revaluation Retained capital premium reserve earnings Total GBPm GBPm GBPm GBPm GBPm At 1st January 2022 4.4 4.2 0.7 17.2 26.5 ---------- ---------- ---- ------------ ----------- --------- Comprehensive income Profit for the period - - - 4.4 4.4 Other comprehensive income Actuarial gain on retirement benefit obligation - - - 7.5 7.5 Deferred income tax on actuarial gain on retirement benefit obligation - - - (2.0) (2.0) Total other comprehensive income - - - 5.5 5.5 ---------- ---------- ---- ------------ ----------- --------- Total comprehensive income - - - 9.9 9.9 ---------- ---------- ---- ------------ ----------- --------- Transactions with owners Share based payment debit - - - 0.8 0.8 Shares acquired by ESOT - - - (0.5) (0.5) Allotted in respect of share option schemes - 0.2 - - 0.2 Dividends paid - - - (1.8) (1.8) ---- ------------ Total transactions with owners - - - (1.5) (1.3) ---------- ---------- ---- ------------ ----------- --------- At 30th June 2022 4.4 4.4 0.7 25.6 35.1 ---------- ---------- ---- ------------ ----------- --------- Condensed consolidated statement of changes in equity For the six months ended 30th June 2021 Share Share Revaluation Retained capital premium reserve earnings Total GBPm GBPm GBPm GBPm GBPm At 1st January 2021 4.3 3.8 0.9 6.8 15.7 --------- --------- ------------ ---------- ------- Comprehensive income Profit for the period - - - 1.5 1.5 Other comprehensive income Actuarial gain on retirement benefit obligation - - - 5.5 5.5 Deferred income tax on actuarial gain on retirement benefit obligation - - - (1.1) (1.1) Total other comprehensive income - - - 4.4 4.4 --------- --------- ------------ ---------- ------- Total comprehensive income - - - 5.9 5.9 --------- --------- ------------ ---------- ------- Total transactions with owners - - - (2.6) (2.6) --------- --------- ------------ ---------- ------- At 30th June 2021 4.3 3.8 0.8 10.1 19.0 --------- --------- ------------ ---------- ------- Condensed consolidated statement of changes in equity For the year ended 31st December 2021 Share Share Revaluation Retained capital premium reserve earnings Total GBPm GBPm GBPm GBPm GBPm At 1st January 2021 4.3 3.8 0.9 6.8 15.7 --------- --------- ------------ ----------- ------- Comprehensive income Profit for the year - - - 6.3 6.3 Other comprehensive income Actuarial gain on retirement benefit obligation - - - 5.6 5.6 Deferred income tax on actuarial gain on retirement benefit obligation - - - 0.4 0.4 Total other comprehensive income - - - 6.0 6.0 --------- --------- ------------ ----------- ------- Total comprehensive income - - - 12.3 12.3 --------- --------- ------------ ----------- ------- Transactions with owners Transfer on depreciation of freehold properties - - (0.1) 0.1 - Share based payment credit - - - 0.8 0.8 Shares acquired by ESOT - - - (0.9) (0.9) Allotted in respect of share option schemes 0.1 0.4 - 0.5 Dividends paid - - - (1.9) (1.9) Total transactions with owners 0.1 0.4 (0.1) (1.9) (1.5) --------- --------- ------------ ----------- ------- At 31st December 2021 4.4 4.2 0.7 17.2 26.5 --------- --------- ------------ ----------- -------
Notes to the condensed consolidated financial statements for the six months to 30 June 2022
Note 1 - Basis of preparation
TClarke plc (the 'Company') is a company incorporated and domiciled in the United Kingdom. The nature of the Group's operations and its principal activities are set out in Note 2 below and in the interim management report. The consolidated interim financial statements comprise the condensed financial statements of the Company and its subsidiaries (together the 'Group').
These condensed interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2021 were approved by the Board of Directors on 08 March 2022 and have been delivered to the Registrar of Companies and a copy has been made available on the Company's website at www.tclarke.co.uk . The auditors' report on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006.
These condensed interim financial statements for the half year ended 30 June 2022 have been prepared in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. They do not include all the information required for the full annual financial statements and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 December 2021.
The interim financial statements have not been audited or reviewed by the Company's auditors.
Accounting policies
Except as described below, the financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31 December 2021.
Taxes on income in the interim periods are accrued using the estimated effective tax rate that would be applicable to expected total annual earnings.
Estimates and financial risk management
The preparation of interim financial statements requires the Directors to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities at the reporting date and the amounts of revenue and expense incurred during the period that may not be readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
In preparing these interim financial statements, the significant judgements made by the Directors in applying the Group's accounting policies and the key sources of uncertainty together with the Group's financial risk management objectives and policies were the same as those that applied to the financial statements as at and for the year ended 31st December 2021. The principal risks and uncertainties continue to be those which are set out on pages 26-29 of the Group's annual report and accounts for the year ended 31st December 2021.
Going concern
The Group has recently renewed its banking facilities, which now comprise a GBP5m overdraft facility repayable on demand, and a GBP25m revolving credit facility ("RCF") expiring 31st August 2026. At 30 June 2022 the Group had drawn down GBP5m (2021: GBP15m) of the RCF and the overdraft facility was. The gross cash balance was GBP12.2m, resulting in net cash of GBP7.2m. The Group therefore has up to GBP37.2m available to support the Group's working capital flows and funding demands during the course of the year.
After making appropriate enquiries, the Directors are satisfied that the Company and Group have adequate resources to continue their operations for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.
Note 2 - Segmental information
The Group provides electrical and mechanical contracting and related services to the construction industry and end users.
For management and internal reporting purposes the Group is organised geographically into three regional divisions; London, UK South & UK North, reporting to the Chief Executive, who is the chief operating decision maker.
30 June 2022 London UK South UK North Group costs Total and Unallocated GBPm GBPm GBPm GBPm GBPm Revenue from contracts with customers 125.1 43.6 37.5 - 206.2 ------- --------- --------- ----------------- ------ Operating profit 5.8 1.2 1.0 (2.0) 6.0 Finance costs - - - (0.5) (0.5) ------- --------- --------- ----------------- ------ Profit/(loss) before tax 5.8 1.2 1.0 (2.5) 5.5 Taxation expense - - - (1.1) (1.1) ------- --------- --------- ----------------- ------ Profit/(loss) for the period 5.8 1.2 1.0 (3.6) 4.4 ------- --------- --------- ----------------- ------ London UK South UK North Total GBPm GBPm GBPm GBPm Business sector --------- ----------- ----------- -------- Engineering 38.2 10.5 9.3 58.0 Facilities Management 1.5 9.7 5.8 17.0 Infrastructure 9.8 21.0 8.6 39.4 Residential 16.9 1.0 11.7 29.6 Technologies 58.7 1.4 2.1 62.2 Total revenue 125.1 43.6 37.5 206.2 --------- ----------- ----------- -------- 30 June 2021 London UK South UK North Group costs Total and Unallocated GBPm GBPm GBPm GBPm GBPm Revenue from contracts with customers 72.8 35.4 30.0 - 138.2 ----------- ----------- --------- ----------------- ------------ Operating profit 1.0 1.3 1.1 (1.0) 2.4 Finance costs - - - (0.5) (0.5) ----------- ----------- --------- ----------------- ------------ Profit/(loss) before tax 1.0 1.3 1.1 (1.5) 1.9 Taxation expense - - - (0.4) (0.4) ----------- ----------- --------- ----------------- ------------ Profit/(loss) for the period 1.0 1.3 1.1 (1.9) 1.5 ----------- ----------- --------- ----------------- ------------ London UK South UK North Total GBPm GBPm GBPm GBPm Business sector ------------- ---------------- ----------------- -------- Facilities Management 1.0 1.1 4.4 6.5 Infrastructure 9.3 22.8 12.2 44.3 Engineering Services 37.2 6.0 1.8 45.0 Residential & Hotels 12.6 5.3 11.0 28.9 Technologies 12.7 0.2 0.6 13.5 Total revenue 72.8 35.4 30.0 138.2 ------------- ---------------- ----------------- -------- 31 December 2021 London UK South UK North Group costs Total and Unallocated GBPm GBPm GBPm GBPm GBPm Revenue from contracts with customers 189.4 67.1 70.6 - 327.1 ------- ----------- --------- ----------------- -------- Operating profit/(loss) 6.2 2.6 3.0 (3.0) 8.8 Finance costs - - - (1.0) (1.0) ------- ----------- --------- ----------------- -------- Profit/(loss) before tax 6.2 2.6 3.0 (4.0) 7.8 Taxation expense - - - (1.5) (1.5) ------- ----------- --------- ----------------- -------- Profit/(loss) for the year 6.2 2.6 3.0 (5.5) 6.3 ------- ----------- --------- ----------------- -------- London UK South UK North Total GBPm GBPm GBPm GBPm Business sector ---------------- ------------- ----------------- ---------- Facilities Management 2.7 13.6 9.7 26.0 Infrastructure 15.1 34.4 29.3 78.8 Engineering Services 91.7 14.3 10.9 116.9 Residential & Hotels 31.5 4.8 19.6 55.9 Technologies 48.4 - 1.1 31.5 Total revenue 189.4 67.1 70.6 327.1 ---------------- ------------- ----------------- ----------
Note 3 - Taxation expense
The effective corporation tax rate applied for the period is 19.0% (30 June 2021: 19.0%).
Note 4 - Earnings per share
A. Basic earnings per share
The earnings per share represent the profit for the period divided by the weighted average number of ordinary shares in issue.
Unaudited Unaudited Audited 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Earnings Profit attributable to owners of the Company 4.4 1.5 6.3 Weighted average number of ordinary shares (000s) 42,988 41,898 42,284 ------------ ------------ ------------- Basic earnings per share 10.24p 3.58p 14.99p ------------ ------------ ------------- B. Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has two categories of dilutive potential ordinary shares: share options granted under the Company's SAYE schemes, and conditional share awards granted under the Long-Term Incentive Plan. Further details of these schemes are given in note 18 of the 2021 annual report and financial statements .
Unaudited Unaudited Audited 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Earnings Profit attributable to owners of the Company 4.4 1.5 6.3 4.4 1.5 6.3 ------------ ------------ ------------- Weighted average number of ordinary shares in issue (000s) 42,988 41,898 42,284 Adjustments SAYE Share Options (000s) 278 451 471 Long-Term Incentive Plan Conditional share awards (000s) - 1,982 2,790 Weighted average number of ordinary shares for diluted earnings per share (000s) 43,266 44,331 45,545 ------------ ------------ ------------- Diluted earnings per share 10.17p 3.38p 13.91p ------------ ------------ -------------
Note 5 - Notes to the consolidated statement of cash flows
Unaudited Unaudited Audited A. - Reconciliation of operating profit 30 06 2022 30 06 2021 31 12 2021 to net cash from operating activities GBPm GBPm GBPm Operating profit 6.0 2.4 8.8 Depreciation charges 1.1 1.0 2.0 Equity settled share based payments 0.8 (0.6) 0.8 Additional pension contributions (0.8) (0.8) (1.5) Defined benefit pension scheme movement 0.2 0.2 0.4 Operating cash flows before movements in working capital 7.3 2.2 10.5 Increase in contract balances (18.1) (14.0) (8.2) Decrease / (Increase) in operating trade and other receivables 11.3 (2.4) (18.8) Increase in operating trade and other payables 5.0 9.2 16.4 ------------ ------------ ------------ Cash generated by / (used in) operating activities 5.5 (5.0) (0.1) Interest paid (0.2) (0.3) (0.5) ------------ ------------ ------------ Net cash generated by / (used in) operating activities 5.3 (5.3) (0.6) ------------ ------------ ------------
B. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank less bank overdrafts.
Note 6 - Related party transactions
Transactions between the Company and its subsidiary undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Full disclosure of the Group's other related party transactions is given in Note 21 to the Group's financial statements for the year ended 31 December 2021. There have been no material changes in these relationships in the six months ended 30 June 2022 that have materially affected the financial position or performance of the Group during that period.
Note 7 - Pension commitments
The present value of the defined benefit retirement benefit scheme and the related past and current service costs were measured using the projected unit credit method. The amount included in the statement of financial position arising from the Group's obligations in respect of its defined benefit retirement benefit scheme is as follows:
Unaudited Unaudited Audited 30 06 2022 30 06 2021 31 12 2021 GBPm GBPm GBPm Present value of defined benefit obligations 51.2 69.9 73.4 Fair value of scheme assets (35.3) (45.4) (49.5) ------------- ------------- ------------- Deficit in scheme recognised in the statement of financial position 15.9 24.5 23.9 Key assumptions used Rate of increase in salaries 2.49% 2.90% 3.39% Rate of increase of pensions in payment 3.11% 3.10% 3.15% Discount rate 3.82% 2.00% 1.89% Inflation assumption (RPI) 3.19% 3.20% 3.25% Inflation assumption (CPI) 1.99% 2.40% 2.05% Unaudited Audited Mortality assumptions (years) 30 06 2022 Unaudited 31 12 2021 30 06 2021 Life expectancy at age 65 for current pensioners: Men 21.2 21.8 21.5 Women 23.2 24.1 23.4 Life expectancy at age 65 for future pensioners (current age 45) Men 22.1 22.8 22.5 Women 24.3 25.3 24.6
Statement of Directors' responsibilities
The Directors confirm that the condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and
-- material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.
On behalf of the Board
Iain McCusker - Chairman
Mark Lawrence - Chief Executive
Trevor Mitchell - Finance Director
14 July 2022
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July 14, 2022 02:00 ET (06:00 GMT)
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