TIDMALU
RNS Number : 9307N
Alumasc Group PLC
04 February 2021
Thursday 4 February 2021
The Alumasc Group plc
Interim results
Outstanding H1 performance
Alumasc (ALU.L) the sustainable building products, systems and
solutions Group today announces results for the six months ended 31
December 2020.
Commenting on the interim results, Paul Hooper, Chief Executive
of Alumasc said:
"The Group's substantially strong performance of an 11% increase
in revenues, 23% increase in export sales and more than 100%
increase in underlying pre-tax profit during the period, reflects
the successful execution of our repositioning strategy launched in
2019. This has been achieved by the hard work of the employees, for
which I would like to thank them.
Alongside an increasingly strong financial performance, the
Group has undertaken a significant number of internal initiatives
to act in an environmentally sustainable manner, including sourcing
50% of the Group's electricity from sustainable sources. We are
also in the process of setting internal metrics to monitor
performance and aligning our ESG programme to TCFD and the UN
Sustainability Goals. Many of our products contribute to carbon and
water efficiency in the built environment and our internal
initiatives contribute further to helping our customers mitigate
their environmental impact.
Reflecting the Board's confidence in the year ahead, the
underlying strength of the business and the strategic growth
opportunities available to us, we have today proposed an interim
dividend of 3.25 pence per share.
Our long-term strategy remains to continue to deliver profitable
growth through our strategic positions in sustainable building
products, while growing our export market. In spite of some
potential industry headwinds, we will focus on delivering this to
generate sustainable returns for all our stakeholders."
Financial Highlights:
Against a background of the continuing presence of COVID-19 and
uncertainty surrounding the likelihood of a Trade Agreement being
secured with the UK's exit from the EU, Alumasc's performance in H1
was outstanding.
- Group revenues were up by 11% to GBP45.6 million (2019:
GBP41.1 million), with UK revenues 9% ahead and exports
(representing 13% of Group revenues) 23% ahead
- Underlying operating margins were ahead by 7.5 percentage
points to 13.6% (2019: 6.1%) reflecting increased sales, improved
margins and the benefit of the prior year cost reduction programme
in lower overheads
- Underlying profit before tax was GBP6.0 million (2019: GBP2.3 million)
- EBITDA was GBP7.4 million (2019: GBP3.5 million)
- Statutory profit before tax was GBP5.5 million (2019: GBP2.1 million)
- Underlying earnings per share were 13.4 pence (2019: 5.1
pence) and basic earnings per share 12.2 pence (2019: 5.0
pence)
- Net bank debt at 31 December was GBP0.2 million (30 June 2020:
GBP4.3 million), benefitting from strong focus on working capital
management
- Pension deficit at 31 December was GBP12.8 million (30 June
2020: GBP19.3 million), benefitting from a strong investment
performance
- An interim dividend of 3.25 pence per share is planned for
payment in April 2021, reflecting the Board's confidence in the
underlying strength of the business and strategic growth
opportunities available to it. This would be an increase from the
2.95 pence per share interim dividend that was planned for April
2020 but which was cancelled in light of the Pandemic's onset.
Operational Highlights:
The Water Management Division, representing 42% of Group
revenues, made a profit of GBP3.5 million (18% operating margin),
GBP1.1 million (44%) ahead of the prior year first half, driven by
GBP1.6 million (9%) volume increases, gross margin improvements and
cost savings.
The Building Envelope Division, representing 46% of Group
revenues, delivered a record performance, returning to profit of
GBP2.5 million (12% operating margin), GBP2.8 million ahead of the
prior year. This benefitted both from market share gains at Roofing
and from a much improved performance at Levolux, where more
disciplined opportunity qualification, project management and
reduced overheads led to a profit in every month of H1.
Housebuilding Products Division, representing 12% of Group
revenues, grew profit by 29% to GBP1.2 million (22% operating
margin), testament to the success of new product introductions,
outstanding service and stringent cost controls. The achievement of
100% On Time In Full delivery performance in H1 was clearly
appreciated by its customers.
The Levolux restructuring and turnaround performance created a
much improved performance in which it achieved a profit in each
month of H1. As anticipated, revenues have fallen in line with our
decision to strategically position it as a specialist provider of
solar shading, architectural screening and modular balconies, with
an increasing bias towards design and supply work. Its performance
was largely driven by the growth of export sales to the US in this
design and supply category. Improved opportunity qualification, and
project management along with higher than budgeted cost reductions
also contributed to the turnaround as the business continues to
operate with a more professional approach to tender opportunity
selection. The new approach is beginning to show a healthy pipeline
of targeted projects for the future.
In addition, following a search using consultants we have
identified a new Group Finance Director, who will join us on 1
March 2021, and have issued a separate RNS on this today.
Outlook
Underlying profit before tax at 13% of sales demonstrates what
Alumasc can achieve in its chosen marketplace. The Group has a
strong balance sheet, with a healthy cash position, and a well
defined growth path. One mark of our confidence in the future is
the resumption of the interim dividend today.
While it is encouraging that an EU Free Trade Agreement has been
agreed, we wait to see how frictionless this is in practice and
what the impact of the proposed cessation of the Help to Buy and
Stamp Duty government initiatives in our Q3 might be. In spite of
COVID-19 and its mutations which have put the UK into a third
lockdown construction, at least at this stage, is being allowed to
continue to operate. It is hoped that the roll-out of vaccines
should result in a more stable situation in our Q4. Nevertheless,
despite the above risks and uncertainties, the Group is now in a
very strong position to move further forward.
Enquiries:
The Alumasc Group plc Paul Hooper, CEO + 44 (0) 1536 383844
Peel Hunt (Broker)
Mike Bell + 44 (0)207 418 8831
finnCap (NOMAD)
Julian Blunt + 44 (0)207 220 0500
Camarco:
Ginny Pulbrook + 44 (0)203 757 4992
Tom Huddart + 44 (0)203 757 4991
Email: alumasc@camarco.co.uk
Notes to Editors:
Alumasc is a UK-based supplier of premium building products,
systems and solutions. Almost 80% of group sales are driven by
building regulations and specifications (architects and structural
engineers) because of the performance characteristics offered.
The Group has three business segments with strong positions and
brands in their individual markets. The three segments are: Water
Management; Building Envelope; and Housebuilding Products.
REVIEW OF INTERIM RESULTS
Overview
Financial Overview
-- Against a background of the continuing presence of COVID-19
and uncertainty surrounding the likelihood of a Trade Agreement
being secured with the UK's exit from the EU Alumasc's performance
in H1 was outstanding.
- Group revenues were up by 11% to GBP45.6 million (2019:
GBP41.1 million), with UK revenues 9% ahead and exports
(representing 13% of Group revenues) 23% ahead
- Gross margins were 36.7% (2019: 29.8%)
- Underlying operating margins were ahead by 7.5 percentage
points to 13.6% (2019: 6.1%) reflecting increased sales, improved
margins and the benefit of the prior year cost reduction programme
in lower overheads
- Underlying profit before tax was GBP6.0 million (2019: GBP2.3 million)
- EBITDA was GBP7.4m (2019: GBP3.5m)
- Statutory profit before tax was GBP5.5 million (2019: GBP2.1 million)
- Underlying earnings per share were 13.4 pence (2019: 5.1
pence) and basic earnings per share 12.2 pence (2019: 5.0
pence)
- Net bank debt at 31 December was GBP0.2 million (30 June 2020:
GBP4.3 million), benefitting from strong focus on working capital
management.
-- An interim dividend of 3.25 pence per share is planned for
payment in April 2021, reflecting the Board's confidence in the
underlying strength of the business and strategic growth
opportunities available to it. This would be an increase from the
2.95 pence per share interim dividend that was planned for April
2020 but which was cancelled in light of the COVID-19 Pandemic's
onset.
-- Government grant income of GBP0.1 million was repaid during
the period in relation to Coronavirus Job Retention Scheme income
that had been claimed in the previous financial period for
employees that have, unfortunately, subsequently been made
redundant.
Operational Overview
-- The 11% uplift in our revenues to GBP45.6 million reflects an
increase in our market share won particularly in our Roofing
business and Water Management Division. Following a refocus of the
customer profile our Housebuilding Products Division's revenue grew
slightly, bolstered by the success of several new products across
the last twelve months.
-- Export sales grew by 23% to GBP6.2 million, 13.5% of the
total (2019: 12.1%), driven by sales to North America by
Levolux.
-- The Water Management Division, representing 42% of Group
revenues, made a profit of GBP3.5 million (18% operating margin),
GBP1.1 million (44%) ahead of the prior year first half, driven by
GBP1.6 million (9%) volume increases, gross margin improvements and
cost savings. The division continued to deliver Rain to Drain
solutions, enabling customers to benefit from rainwater and
drainage products that capture, retain and control the flow of
rainwater inside and outside buildings from origination source to
water course, sewer or ground.
-- The Building Envelope Division, representing 46% of Group
revenues, delivered a record performance, returning to profit of
GBP2.5 million (12% operating margin), GBP2.8 million ahead of the
prior year. This benefitted both from market share gains at Roofing
and from the successful execution of the Levolux strategy, where
more disciplined project management and reduced overheads led to a
profit in every month of H1. The Roofing business has increased
focus on a high end specification offer supported by the highest
standards on a customer focused service level which meets the
client's requirements on providing carbon reducing systems combined
with safety in installation; all backed by bona fide long term
warranties which combine to increase market share growth across all
sectors.
-- Housebuilding Products Division, representing 12% of Group
revenues, grew profit by 29% to GBP1.2 million (22% operating
margin), testament to the success of new product introductions,
outstanding service and stringent cost controls. The achievement of
100% On Time In Full delivery performance in H1 was clearly
appreciated by its customers.
-- The Levolux restructuring and turnaround performance created
a much improved performance in which it achieved a profit in each
month of H1. As anticipated, revenues have fallen in line with our
decision to strategically position it as a specialist provider of
solar shading, architectural screening and modular balconies, with
an increasing bias towards design and supply work. Its performance
was largely driven by the growth of export sales to the US in this
design and supply category. Improved opportunity qualification, and
project management along with higher than budgeted cost reductions
also contributed to the turnaround as the business continues to
operate with a more professional approach to tender opportunity
selection. The new approach is beginning to show a healthy pipeline
of targeted projects for the future.
Outlook
-- Underlying profit before tax at 13% of sales demonstrates
what Alumasc can achieve in its chosen marketplace. The Group has a
strong balance sheet, with a healthy cash position, and a well
defined growth path. One mark of our confidence in the future is
the resumption of the interim dividend today.
-- While it is encouraging that an EU Free Trade Agreement has
been agreed, we wait to see how frictionless this is in practice
and what the impact of the proposed cessation of the Help to Buy
and Stamp Duty government initiatives in our Q3 might be. In spite
of COVID-19 and its mutations which have put the UK into a third
lockdown construction, at least at this stage, is being allowed to
continue to operate. It is hoped that the roll-out of vaccines
should result in a more stable situation in our Q4. Nevertheless,
despite the above risks and uncertainties, the Group is now in a
very strong position to move further forward.
Strategy Update
-- The significant improvement in the Group's fortunes emanates
from the execution of the strategy which includes the stated
objectives of:
-- Recovery of Levolux's financial performance back into a run rate profit
-- Continuing to simplify, streamline and reduce fixed costs across the Group.
-- Over GBP1.8 million of costs (versus a target GBP1.5 million)
were taken out of Levolux in the prior year and, when combined with
its embryonic focus on supply only, improved project management and
developing North America further, this has been successful with the
aforementioned profit achieved in every month of H1 and a
significant increase of sales into North America.
-- Alongside these short-term areas of focus the Group has
continued to progress its long-term strategy to deliver profitable
growth through leveraging its strong strategic positions in
sustainable building products and to outperform the UK construction
market while continuing development of export markets. The Group's
11% revenue increase, including the 23% growth in export revenue,
is testament to that.
-- Alumasc is also in a very strong position to benefit from the
environment/green/sustainability agenda both in terms of its own
actions and through the development of further products to manage
energy in buildings, to produce a greener built environment, to
take CO(2) out of the atmosphere and to manage the scarce resource
of water following changes in rainwater patterns in the UK. Many
internal initiatives have also been taken to act in an
environmentally sustainable manner, including the sourcing of
electricity from renewable sources for over 50% of the Group's
electricity.
Operational Review
Water Management
Revenue: GBP19.2 million (2019/20: GBP17.6 million)
Operating profit: GBP3.5 million (2019/20: GBP2.4 million)
Operating margin: 18.3% (2019/20: 13.8%)
Alumasc Water Management Division delivered another strong
performance in the first half year, significantly increasing profit
and operating margin. The drivers of the 44% improvement in
operating profit to GBP3.5 million (18.3% operating margin) were
the continued control of operating costs including the benefit of
the Slotdrain manufacturing move from Dover to the Halstead
facility along with improved productivity at the Burton Latimer
facility. This was accompanied by a GBP1.6 million (9%) revenue
increase which will have taken market share with all parts of the
Division ahead. Within this the E-commerce business, Rainclear,
delivered a significant, 30%, revenue growth following increased
marketing activity and, as has been seen in many parts of the UK
economy, greater activity has taken place online. Gatic and Wade
performed very strongly in H1. Although not registered as revenue
yet the first shipment to Chek Lap Kok's Airport Runway 3 will be
recognised at the start of Q3.
Alumasc Water Management Solutions performed well with
encouraging Alumasc Rainwater, Harmer Drainage and Skyline sales
along with a strong Wade and Gatic Slotdrain performance. This
followed successful marketing and sales initiatives in this
Division.
Building Envelope
Revenue: GBP21.1 million (2019/20: GBP18.2 million)
Underlying operating profit/(loss): GBP2.5 million (2019/20:
GBP(0.3) million)
Underlying operating margin: 12.0% (2019/20: (1.5)%)
Operating profit/(loss): GBP2.4 million (2019/20: GBP(0.4)
million)
The Building Envelope Division had a significant turnaround in
H1 from a small loss in the prior year to a GBP2.5 million (12%
operating margin) operating profit.
Alumasc Roofing had an outstanding first half year and, in
particular, benefitted from the further investment in its sales
team particularly in areas that had been historically weak for it.
It also had increased activity focussed into the refurbishment
market. The COVID-19 impact meant that there was more demand for
external work, for instance, on schools rather than on internal
refurbishment. Alumasc benefitted from this while taking market
share. New Build work also held up well during H1.
It was very pleasing to see the result of much hard work at
Levolux turning into profit for every month including December. The
strategy, to focus on good value added projects in the UK,
preferably supply only, and better project management while
developing the strong opportunity further in North America is
showing encouraging early signs. This is very much the case despite
the UK new commercial market being a little challenging.
Specification sales opportunities are growing from the new
integrated Building Envelope sales approach with some combined
project wins already achieved.
Housebuilding Products
Revenue: GBP5.3 million (2019/20: GBP5.3 million)
Underlying operating profit: GBP1.2 million (2019/20: GBP0.9
million)
Operating margin: 22.2% (2019/20: 17.3%)
Operating profit: GBP1.1 million (2019/20: GBP0.9 million)
Timloc, our Housebuilding Products business, continues to
perform well. It really benefitted from the introduction of several
new products across the last year and also from its acclaimed 100%
OTIF delivery performance.
Its new products, such as Adapt-Air, InvisiWeep, Meter boxes,
Fire-rated Cavity Closer and Rad-Seal, have been very successful.
There has been an increased focus on operational efficiency
improvements which has led to cost reductions in H1. Continued
investment in new equipment with much improved energy consumption,
delivering excellent paybacks, has been a significant contribution
to assisting the reduction in the Group's greenhouse gas emissions.
In addition, Timloc has now sourced all its energy requirements
from renewable sources.
Financial Review
The Group's net cash inflow was GBP4.1 million in the period,
with net bank debt decreasing to GBP0.2 million at 31 December 2020
compared with GBP4.3 million at 30 June 2020. Capital expenditure
was GBP1.0 million in the period, in line with depreciation and
non-brand amortisation. The Group continues to invest in new plant
and machinery to support new product development and to improve
operational efficiency and environmental performance, and the
expectation is that capital investment will exceed depreciation in
the shorter term to continue with these improvements.
The Group's net assets and shareholders' funds increased from
GBP19.8 million at the beginning of the financial year to GBP27.6
million at 31 December 2020, reflecting the impact of pension
scheme actuarial gains and the retained profit after tax in the
first half year, offset by the payment of the prior year's final
dividend in October. The Group's IAS 19 pension liability was
GBP12.8 million at 31 December 2020, GBP6.4 million lower than at
30 June 2020, with an increase in the valuation of gross pension
liabilities due to reduced gilt yields more than offset by a good
investment performance and company deficit reduction contributions.
Post tax return on investment was 13.9% (2019: 10.6%) reflecting
the higher year on year operating profit.
Board
A new Group Finance Director, Simon Dray, will join the Board on
1 March 2021. After qualifying as a Chartered Accountant Simon
moved into industry where he served 6 years at Halma plc becoming
Group Financial Controller before joining Low and Bonar plc where
he moved from Group Financial Controller to Interim CFO before
becoming Director of Group Strategy and M&A. Simon brings with
him much experience in running the finance side of a PLC along with
significant M&A experience which will assist Alumasc in its
next phase of strategy growth.
Paul Hooper, Chief Executive
4 February 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
for the half year to 31 December 2020
Year to
Half year to 31 December Half year to 31 December 30 June
2020 2019 2020
Non-underlying Non-underlying
Underlying Total Underlying Total Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Continuing Notes GBP'000 GBP'000 GBP'000 GBP'000
operations: GBP'000 GBP'000 GBP'000
Revenue 5 45,551 - 45,551 41,099 - 41,099 75,992
Cost of sales (28,851) - (28,851) (28,854) - (28,854) (53,413)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Gross profit 16,700 - 16,700 12,245 - 12,245 22,579
Net operating
expenses
Net operating
expenses
before
non-underlying
items (10,497) - (10,497) (9,718) - (9,718) (19,386)
Other operating
income - - - - - - 968
IAS 19 past
service
pension cost 4 - (150) (150) - - - -
Other
non-underlying
items 4 - (178) (178) - (313) (313) (1,045)
Net operating
expenses (10,497) (328) (10,825) (9,718) (313) (10,031) (19,463)
4,
Operating profit 5 6,203 (328) 5,875 2,527 (313) 2,214 3,116
Finance expenses 6 (251) (134) (385) (247) (160) (407) (757)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit before
taxation 5,952 (462) 5,490 2,280 (473) 1,807 2,359
Tax expense 7 (1,167) 33 (1,134) (447) 81 (366) (442)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit for the
period
from continuing
operations 4,785 (429) 4,356 1,833 (392) 1,441 1,917
Discontinued
operations:
Profit after
taxation
for the period
from
discontinued
operations - - - - 339 339 339
Profit for the
period 4,785 (429) 4,356 1,833 (53) 1,780 2,256
=========== ============== =========== =========== ============== =========== ==========
Other
comprehensive
income:
Items that will
not
be recycled to
profit
or loss:
Actuarial
gain/(loss)
on defined
benefit
pensions, net
of tax 4,373 (1,271) (6,473)
----------- ----------- ----------
Items that are or
may be recycled
subsequently
to profit or
loss:
Effective
portion
of changes in
fair
value of cash
flow
hedges, net of
tax (300) (167) 176
Exchange
differences
on
retranslation
of
foreign
operations (41) (8) 11
(341) (175) 187
----------- ----------- ----------
Other
comprehensive
gain/(loss) for
the
period, net of
tax 4,032 (1,446) (6,286)
----------- ----------- ----------
Total
comprehensive
profit /(loss)
for
the period, net
of
tax 8,388 334 (4,030)
=========== =========== ==========
Earnings per Pence Pence Pence
share
Basic earnings
per
share
- Continuing
operations 12.2 4.0 5.4
- Discontinued
operations - 1.0 0.9
10 12.2 5.0 6.3
=========== =========== ==========
Diluted earnings
per
share
- Continuing
operations 12.1 4.0 5.4
- Discontinued
operations - 1.0 0.9
10 12.1 5.0 6.3
=========== =========== ==========
Alternative
Performance
Measures:
Underlying
earnings
per share
(pence) 10 13.4 5.1 8.2
=========== =========== ==========
Full reconciliations of underlying to statutory profits and
earnings per share are provided in notes 4 and 10 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
at 31 December 2020
31 December 31 December 30 June
2020 2019 2020
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment
- owned assets 11,210 11,652 11,089
Property, plant and equipment
- right of use assets 5,474 4,820 5,856
Goodwill 18,705 18,705 18,705
Other intangible assets 3,389 3,335 3,352
Deferred tax assets 2,441 2,217 3,661
------------- ------------- -----------
41,219 40,729 42,663
Current assets
Inventories 9,779 10,732 8,596
Trade and other receivables 14,987 12,712 13,868
Contract assets 2,416 2,758 2,402
Derivative financial assets - - 207
Cash at bank 11 19,759 9,773 16,143
Corporation tax receivable - 31 325
46,941 36,006 41,541
Total assets 88,160 76,735 84,204
------------- ------------- -----------
Liabilities
Non-current liabilities
Interest bearing loans and
borrowings 11 (19,935) (10,883) (19,909)
Lease liability (4,914) (4,506) (5,244)
Employee benefits payable (12,847) (13,043) (19,269)
Provisions (1,028) (1,120) (1,182)
Deferred tax liabilities (1,203) (753) (1,007)
------------- ------------- -----------
(39,927) (30,305) (46,611)
Current liabilities
Trade and other payables (17,194) (13,719) (14,413)
Contract liabilities (662) (900) (898)
Lease liability (670) (348) (680)
Provisions (1,172) (1,512) (1,194)
Corporation tax payable (758) - -
Derivative financial liabilities (163) (211) -
Bank overdraft - (5,535) (567)
(20,619) (22,225) (17,752)
Total liabilities (60,546) (52,530) (64,363)
------------- ------------- -----------
Net assets 27,614 24,205 19,841
============= ============= ===========
Equity
Called up share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own shares (416) (416) (416)
Hedging reserve (132) (175) 168
Foreign currency reserve 60 82 101
Profit and loss account reserve 23,140 19,752 15,026
Total equity 27,614 24,205 19,841
============= ============= ===========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2020
Half year Half year
to to Year to
31 December 31 December 30 June
2020 2019 2020
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Operating activities
Operating profit 5,875 2,214 3,116
Adjustments for:
Depreciation 1,056 750 1,851
Amortisation 157 334 313
Impairment of assets - - 300
Loss on disposal of property, plant
and equipment 3 58 4
IAS 19 past service pension cost 150 - -
(Increase)/decrease in inventories (1,183) (244) 1,892
(Increase)/decrease in receivables (1,133) 5,914 5,114
Increase/(decrease) in trade and
other payables 2,516 (5,452) (4,564)
Movement in provisions (176) (973) (1,229)
Cash contributions to retirement
benefit schemes (1,307) (1,601) (2,254)
Share based payments 100 - -
------------- ------------- -----------
Cash generated by operating activities
of continuing operations 6,058 1,000 4,543
Tax received/(paid) 409 (34) (93)
Net cash inflow from operating activities 6,467 966 4,450
------------- ------------- -----------
Investing activities
Purchase of property, plant and
equipment (804) (645) (1,342)
Payments to acquire intangible fixed
assets (194) (253) (417)
Proceeds from sales of property,
plant and equipment 41 50 143
Net proceeds from sale of business
activity - 339 339
Net cash outflow from investing
activities (957) (509) (1,277)
------------- ------------- -----------
Financing activities
Bank interest paid (141) (150) (297)
Equity dividends paid (715) (1,574) (1,574)
Draw down of amounts borrowed - 3,000 12,000
Principal paid on lease liabilities (340) (173) (346)
Interest paid on lease liabilities (90) (76) (153)
Net cash (outflow)/inflow from financing
activities (1,286) 1,027 9,630
------------- ------------- -----------
Net increase in cash at bank and
bank overdrafts 4,224 1,484 12,803
Net cash at bank and bank overdraft
brought forward 15,576 2,762 2,762
Net increase in cash at bank and
bank overdraft 4,224 1,484 12,803
Effect of foreign exchange rate
changes (41) (8) 11
Net cash at bank and bank overdraft
carried forward 11 19,759 4,238 15,576
============= ============= ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2020
Hedging Foreign Profit
Capital reserve currency and loss
Share Share - account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 4,517 445 (416) 168 101 15,026 19,841
Profit for the period - - - - - 4,356 4,356
Exchange differences on retranslation
of foreign operations - - - - (41) - (41)
Net loss on cash flow hedges - - - (370) - - (370)
Tax on derivative financial liability - - - 70 - - 70
Share based payments - - - - - 100 100
Actuarial gain on defined benefit
pension schemes, net of tax - - - - - 4,373 4,373
Dividends - - - - - (715) (715)
At 31 December 2020 4,517 445 (416) (132) 60 23,140 27,614
======= ======= =============== ======== ========== ========== =======
Hedging Foreign Profit
Capital reserve currency and loss
Share Share - account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2019 4,517 445 (416) (8) 90 20,817 25,445
Profit for the period - - - - - 1,780 1,780
Exchange differences on retranslation
of foreign operations - - - - (8) - (8)
Net loss on cash flow hedges - - - (201) - - (201)
Tax on derivative financial liability - - - 34 - - 34
Actuarial loss on defined benefit
pension schemes, net of tax - - - - - (1,271) (1,271)
Dividends - - - - - (1,574) (1,574)
At 31 December 2019 4,517 445 (416) (175) 82 19,752 24,205
======= ======= =============== ======== ========== ========== =======
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
for the half year to 31 December 2020
1. Basis of preparation
The condensed consolidated interim financial statements of The
Alumasc Group plc and its subsidiaries have been prepared in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006 that are effective
at 31 December 2020.
The condensed consolidated interim financial statements have
been prepared using the accounting policies set out in the
statutory accounts for the financial year to 30 June 2020 and in
accordance with AIM Rule 18, and the same accounting policies will
be adopted in the 2021 annual financial statements.
The consolidated financial statements of the Group as at and for
the year ended 30 June 2020 are available on request from the
Company's registered office at Burton Latimer, Kettering,
Northants, NN15 5JP or on the website www.alumasc.co.uk.
The comparative figures for the financial year ended 30 June
2020 are not the Company's statutory accounts for that financial
year but have been extracted from those accounts. Those accounts
have been reported on by the Company's auditors and delivered to
the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements for the
half year ended 31 December 2020 are not statutory accounts and
have been neither audited nor reviewed by the Group's auditors.
They do not contain all of the information required for full
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 30 June 2020.
These condensed consolidated interim financial statements were
approved by the Board of Directors on
4 February 2021.
The Group has out-performed ahead of the Base Case trading
scenario modelled as part of the 30 June 2020 year end Going
Concern review, and also compared to the stress testing performed
in relation to additional National lockdowns. On the basis of the
Group's financing facilities and current financial plans and
sensitivity analyses, the Board is satisfied that the Group has
adequate resources to continue in operational existence for twelve
months from the date of signing this report and accordingly
continues to adopt the going concern basis in preparing these
condensed consolidated interim financial statements.
2. Estimates
The preparation of condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amount of assets and liabilities, income and expense.
Actual results may differ from these estimates.
Except as described below, in preparing these condensed
consolidated interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
as at and for the year ended 30 June 2020, namely the valuation of
defined benefit pension obligations, the valuation of the Group's
acquired goodwill, the recognition of revenue and profit on
contracts with customers where revenue is recognised over time and
the valuation of lease liabilities following the adoption of IFRS
16 on 1 July 2019.
During the six months ended 31 December 2020, management
reassessed and updated its estimates in respect of retirement
benefit obligations based on market data available at 31 December
2020. The resulting impact was a GBP5.4 million pre-tax actuarial
gain, calculated using IAS 19 conventions, recognised in the six
month period to 31 December 2020.
3. Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
provided on pages 20 and 21 of Alumasc's Report and Accounts for
the year ended 30 June 2020. The Board considers these risks and
uncertainties remain relevant to the current financial year.
Specific risks and uncertainties relating to the Group's
performance in the second half year are:
- Continued economic uncertainty on a global basis surrounding the COVID-19 pandemic;
- The impact of the cessation of government incentives on the
construction industry, such as the Stamp Duty Land Tax holiday;
- Potential cost increases following Brexit;
- Prolonged period of bad weather impacting the Group's construction markets.
4. Underlying to statutory profit reconciliation
Half year Half year Year to
to 31 December to 31 December 30 June
Profit before tax 2020 2019 2020
GBP'000 GBP'000 GBP'000
Underlying profit before tax 5,952 2,280 3,665
Brand amortisation (119) (119) (238)
IAS 19 net pension scheme finance costs (134) (160) (261)
IAS 19 past service cost in respect
of GMP equalisation (150) - -
Restructuring & relocation costs (59) (194) (807)
Continuing operations 5,490 1,807 2,359
Profits/gains relating to discontinued
operations - 339 339
Statutory profit before tax 5,490 2,146 2,698
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
Operating profit 2020 2019 2020
GBP'000 GBP'000 GBP'000
Underlying operating profit 6,203 2,527 4,161
Brand amortisation (119) (119) (238)
IAS 19 past service cost in respect
of GMP equalisation (150) - -
Restructuring & relocation costs (59) (194) (807)
Statutory operating profit 5,875 2,214 3,116
=============== =============== ========
In the presentation of underlying profits, management treats the
amortisation of acquired brands and IAS 19 pension costs
consistently as non-underlying items because they are material
non-cash and non-trading items that typically would be excluded in
assessing the value of the business.
In addition, management has presented the following items as
non-underlying as they are non-recurring items that are judged to
be significant enough to affect the understanding of the underlying
trading performance of the business:
- One-off costs of material restructuring and relocation of
separate businesses within the Group in both 2019/20 and
2020/21;
- One-off IAS 19 past service pension cost relating to
Guaranteed Minimum Pension ("GMP") equalisation between men and
women, following a High Court decision on 20 November 2020; and
- One-off profit relating to the sales proceeds recognised in
relation to the contingent consideration earned and received in
cash following the divestment of the Alumasc Facades business.
5. Segmental analysis
In accordance with IFRS 8 Operating Segments, the segmental
analysis below follows the Group's internal management reporting
structure.
Segmental
operating
Revenue result
Half Year to 31 December 2020 GBP'000 GBP'000
Water Management 19,160 3,501
Building Envelope 21,064 2,519
Housebuilding Products 5,327 1,184
------- ----------
Trading 45,551 7,204
Unallocated costs (1,001)
Total 45,551 6,203
======= ==========
GBP'000
Segmental operating result 6,203
Brand amortisation (119)
Past service cost in respect of GMP
equalisation (150)
Restructuring & relocation costs (59)
Total operating profit 5,875
=======
Segmental
operating
Revenue result
Half Year to 31 December 2019 GBP'000 GBP'000
Water Management 17,619 2,436
Building Envelope 18,178 (269)
Housebuilding Products 5,302 919
------- ----------
Trading 41,099 3,086
Unallocated costs (559)
Total 41,099 2,527
======= ==========
GBP'000
Segmental operating result 2,527
Brand amortisation (119)
Restructuring & relocation costs (194)
Total operating profit 2,214
==========
Segmental
operating
Revenue result
GBP'000 GBP'000
Full Year to 30 June 2020
Water Management 33,715 4,824
Building Envelope 33,209 (939)
Housebuilding Products 9,068 1,243
------- ----------
Trading 75,992 5,128
Unallocated costs (967)
Total 75,992 4,161
======= ==========
GBP'000
Segmental operating result 4,161
Brand amortisation (238)
Restructuring & relocation costs (807)
Total operating profit 3,116
=======
6. Finance expenses
Half year Half year
to to Year to
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Finance costs - Bank overdrafts 8 17 40
- Revolving credit facility 153 154 303
- Interest on lease liabilities 90 76 153
------------ ------------ --------
251 247 496
- IAS 19 net pension scheme finance
costs 134 160 261
385 407 757
============ ============ ========
7. Tax expense
Half year Half year Year to
to 31 December to 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Current tax:
UK corporation tax 652 300 22
Overseas tax 29 - 48
Amounts over provided in previous years - (10) (19)
Total current tax 681 290 51
Deferred tax:
Origination and reversal of temporary
differences 450 99 450
Amounts under/(over) provided in previous
years 3 (23) (157)
Rate change adjustment - - 98
Total deferred tax 453 76 391
Total tax expense 1,134 366 442
---------------- ---------------- ---------
Deferred tax recognised in other comprehensive
income:
Actuarial gains/(losses) on pension
schemes 1,026 (262) (1,838)
Cash flow hedges (70) (34) 41
Tax charged/(credited) to other comprehensive
income 956 (296) (1,797)
Total tax charge/(credit) in the statement
of comprehensive income 2,090 70 (1,355)
================ ================ =========
8. Dividends
The Directors have approved an interim dividend per share of
3.25 pence (2019/20: GBPnil) which will be paid on 6 April 2021 to
shareholders on the register at the close of business on 26
February 2021. The cash cost of the dividend is expected to be
GBP1,162,000. In accordance with accounting requirements, as the
dividend was approved after the statement of financial position
date, it has not been accrued in the interim consolidated financial
statements. A final dividend per share of 2.0 pence in respect of
the 2019/20 financial year was paid at a cash cost of GBP715,000
during the six months to 31 December 2020.
9. Share Based Payments
During the period the Group awarded 170,000 options (2019/20:
160,000) under the Executive Share Option Scheme ("ESOS"). These
options have an exercise price of 79.0 pence and require certain
criteria to be fulfilled before vesting. No existing options
(2019/20: none) were exercised during the period and 120,000
existing options lapsed (2019/20: 130,000).
Total awards granted under the Group's Long Term Incentive Plans
("LTIP") amounted to 265,760 (2019/20: 219,078). LTIP awards have
no exercise price but are dependent on certain vesting criteria
being met. No existing LTIP awards were exercised during the period
(2019/20: none) and 257,688 existing LTIP awards lapsed (2019/20:
253,208).
10. Earnings per share
Basic earnings per share is calculated by dividing the net
profit for the period attributable to ordinary equity shareholders
of the parent by the weighted average number of ordinary shares in
issue during the period. Diluted earnings per share is calculated
by dividing the net profit attributable to ordinary equity
shareholders of the parent by the weighted average number of
ordinary shares in issue during the period, after allowing for the
exercise of outstanding share options. The following sets out the
income and share data used in the basic and diluted earnings per
share calculations:
Half year Half year Year to
to 31 December to 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Net profit attributable to equity
holders of the parent - continuing
operations 4,356 1,441 1,917
Net profit attributable to equity
holders of the parent - discontinued
operations - 339 339
---------------- ---------------- -------------
4,356 1,780 2,256
---------------- ---------------- -------------
000s 000s 000s
Basic weighted average number of
shares 35,764 35,764 35,764
Dilutive potential ordinary shares
- employee share options 169 16 55
Diluted weighted average number of
shares 35,933 35,780 35,819
================ ================ =============
Half year Half year Year to
to 31 December to 31 December 30 June
2020 2019 2020
Pence Pence Pence
Basic earnings per share:
Continuing operations 12.2 4.0 5.4
Discontinued operations - 1.0 0.9
12.2 5.0 6.3
================ ================ =============
Diluted earnings per share:
Continuing operations 12.1 4.0 5.4
Discontinued operations - 1.0 0.9
12.1 5.0 6.3
================ ================ =============
Calculation of underlying earnings per share from continuing
operations:
Half year Half year Year to
to 31 December to 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
Reported profit before taxation from
continuing operations 5,490 1,807 2,359
Brand amortisation 119 119 238
IAS 19 net pension scheme finance
costs 134 160 261
Pension GMP equalisation 150 - -
Restructuring & relocation costs 59 194 807
Underlying profit before taxation
from continuing operations 5,952 2,280 3,665
Tax at underlying Group tax rate
of 19.6%
(2019/20 first half year: 19.6%;
full year: 20.3%) (1,167) (447) (744)
Underlying earnings from continuing
operations 4,785 1,833 2,921
---------------- ---------------- -------------
Weighted average number of shares 35,764 35,764 35,764
---------------- ---------------- -------------
Underlying earnings per share from
continuing operations 13.4p 5.1p 8.2p
================ ================ =============
11. Movement in borrowings
Cash at Bank loans Net bank Lease liabilities Total borrowings
bank /bank cash/(debt)
overdrafts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2019 2,762 (7,857) (5,095) - (5,095)
Impact of adoption of IFRS
16 - - - (5,027) (5,027)
Cash flow movements 1,484 (3,000) (1,516) 173 (1,343)
Non-cash movements - (26) (26) - (26)
Effect of foreign exchange
rates (8) - (8) - (8)
At 31 December 2019 4,238 (10,883) (6,645) (4,854) (11,499)
=========== =========== ============= ================== =================
Cash at Bank loans Net bank Lease Total borrowings
bank /bank cash/(debt) liabilities
overdrafts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 15,576 (19,909) (4,333) (5,924) (10,257)
Cash flow movements 4,224 - 4,224 340 4,564
Non-cash movements - (26) (26) - (26)
Effect of foreign exchange
rates (41) - (41) - (41)
At 31 December 2020 19,759 (19,935) (176) (5,584) (5,760)
============ =========== ============= ============= =================
12. Related party disclosure
The Group has a related party relationship with its Directors
and with its UK pension schemes. There has been no material change
in the nature of the related party transactions described in the
Report and Accounts 2020. Related party information is disclosed in
note 29 of that document.
Responsibility Statement
The Directors confirm that, to the best of their knowledge the
condensed consolidated interim financial statements have been
prepared in accordance with Alternative Investment Market ("AIM")
Rule 18.
On behalf of the Board
G P Hooper
Chief Executive
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END
IR DKNBKFBKDNBK
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