TIDMALU
RNS Number : 0867P
Alumasc Group PLC
07 February 2023
Tuesday 7 February 2023
The Alumasc Group plc
Interim results
Confidence in delivering full year expectations
Alumasc (ALU.L) the sustainable building products, systems and
solutions Group today announces results for the six months ended 31
December 2022.
Commenting on the interim results, Paul Hooper, Chief Executive
of Alumasc said:
" This was a strong first half performance, against a
comparative that included significant sales to Chek Lap Kok airport
in Hong Kong. While the short term market remains uncertain, we
enter the second half with encouraging momentum and a record half
year order book, which includes the next phase of the Chek Lap Kok
project, giving us confidence in the delivery of our expectations
for the full year."
Financial Overview: continuing operations
-- Group revenues up by 5% to GBP45.0m (H1 FY22: GBP42.6m), with
organic growth and pricing offsetting significant export orders in
the first half of the prior year:
o Building Envelope delivered a 29% increase in revenues to
GBP18.3m (H1 FY22: GBP14.2m).
o Housebuilding Products delivered a 24% increase in revenues to
GBP7.0m (H1 FY22: GBP5.7m).
o Water Management delivered revenues of GBP19.6m (H1 FY22:
GBP22.8m), reflecting significant export project sales in the prior
half year.
-- Underlying(1) operating margin(2) of 13.4% (H1 FY22: 15.3%):
o Building Envelope underlying operating margin of 14.1% (H1
FY22: 13.3%).
o Housebuilding Products underlying operating margin of 23.0%
(H1 FY22: 19.3%).
o Water Management underlying operating margin of 12.8% (H1
FY22: 18.1%), reflecting the prior year divisional mix benefitting
from large export orders.
-- Underlying(1) profit before tax of GBP5.6m (H1 FY22: GBP6.3m).
-- Reported profit before tax of GBP5.3m (H1 FY22: GBP6.2m).
-- Underlying(1) earnings per share of 12.3p (H1 FY22: 14.1p).
-- Dividend per share increased to 3.40p (H1 FY22: 3.35p)
reflecting the Board's confidence in the future performance of the
business.
Outlook
-- Building Envelope and Housebuilding Products had strong first
half performances and good momentum going into the second half.
-- Water Management has seen lower first half export volumes,
but a stronger performance is expected in H2 as a result of the
next phase of the Chek Lap Kok airport project and other overseas
project phasing.
-- Whilst market conditions remain uncertain in the near term,
the Group continues to demonstrate its ability to outperform
underlying markets through innovation and service, as well as
manage costs and improve efficiency.
-- As a result, the Board remains confident in the Group achieving its full year expectations.
-- With a clear strategy and the majority of revenues directly
linked to sustainability benefits to its customers, the Group
remains well positioned to deliver long term market
outperformance.
Notes:
(1) A reconciliation of underlying to statutory profit is
provided in note 4 to the interim financial statements
(2) Underlying operating margin: underlying operating profit as
a percentage of sales
Enquiries:
The Alumasc Group plc +44 (0) 1536 383844
Paul Hooper, Chief Executive
Simon Dray, Group Finance Director
Peel Hunt (Broker)
Mike Bell +44 (0) 20 7418 8831
Ed Allsopp
finnCap (Nominated Adviser)
Julian Blunt, Edward Whiley + 44 (0)207 220 0561
Camarco (Financial PR) alumasc@camarco.co.uk
Ginny Pulbrook + 44 (0)203 757 4992
Rosie Driscoll + 44 (0)203 757 4981
REVIEW OF INTERIM RESULTS
Chief Executive's Statement
Group sales from continuing operations for the six months ended
31 December 2022 were GBP45.0m (2021: GBP42.6m). UK sales were
strong, increasing by GBP6.7m (18%). In particular, the Building
Envelope and Housebuilding Products Divisions had strong first half
performances driven by very good sales, the result of efforts in
taking market share and the launch of new products into existing
and adjacent markets.
As expected, Export sales in the period were lower, due to the
timing of several significant contracts in Asia. The prior period
included c.GBP2.8m of sales of Gatic access and drainage products
into a number of projects, notably Chek Lap Kok airport in Hong
Kong. This project was successfully completed in the prior year,
and the next phase is due to commence in the final quarter of this
financial year. Export sales outside Asia were also lower, due to
project timings and in particular to the temporary slowing of sales
to the Middle East caused by the FIFA World Cup in Qatar, but are
expected to recover in the second half of the year.
The results of Levolux, which was sold by the Group on 26 August
2022, have been excluded from continuing operations in the current
and prior period, and presented as discontinued operations.
Operational Review
Water Management
H1 FY23 H1 FY22
Revenue GBP19.6m GBP22.8m
--------- ---------
Underlying operating GBP2.5m GBP4.1m
profit
--------- ---------
Underlying operating
margin 12.8% 18.1%
--------- ---------
Operating profit GBP2.5m GBP4.1m
--------- ---------
Following two successive years of record performance, the Water
Management Division fell back predominantly due to the timing of
several significant projects, including at Chek Lap Kok airport in
Hong Kong, which delivered c.GBP2.8m of sales to the prior period.
Export sales are expected to recover in the second half of the
financial year, as the next phase of the Chek Lap Kok development
starts.
UK sales were strong, with several large projects for Gatic
Slotdrain and Access Covers and another very good performance by
our Architectural Aluminium business, Skyline, which benefitted
from the successful introduction of a number of new products to
complement the existing ranges.
With its greater exposure to self-build projects, Rainclear had
a slower performance than the prior period, due to pressure on
household income. However, it mitigated some of these effects
through work with regional housebuilders, and the high profile
launches of its new canopy and veranda ranges, both of which are
showing early promise.
Building Envelope
Continuing operations H1 FY23 H1 FY22*
Revenue GBP18.3m GBP14.2m
--------- ---------
Underlying operating GBP2.6m GBP1.9m
profit
--------- ---------
Underlying operating
margin 14.1% 13.3%
--------- ---------
Operating profit GBP2.6m GBP1.9m
--------- ---------
* The results for the half year to 31 December 2021 have been
re-presented to show the Levolux business as a discontinued
operation.
The Building Envelope Division had a very strong first half
year, growing its revenue by 29%, the result of investment in high
quality employees and some new products, including a very
successful flat to pitch roof system along with the successfully
increased promotion of the CO(2) reducing product, Olivine.
Previously weaker areas of the UK have improved significantly
following the strengthened representation in those areas. A good
level of Academy work was won in the year. Some reasonably
significant cost increases were successfully passed on. The Roofing
business continues to focus on high end specification offers
supported by the highest standards, and a customer focused service
level which delivers low carbon systems combined with safety in
installation, all supported by long term warranties. This has
allowed the business to increase market share in its core
areas.
Housebuilding Products
H1 FY23 H1 FY22
Revenue GBP7.0m GBP5.7m
-------- --------
Underlying operating GBP1.6m GBP1.1m
profit
-------- --------
Underlying operating
margin 23.0% 19.3%
-------- --------
Operating profit GBP1.4m GBP1.1m
-------- --------
Timloc, our Housebuilding Products business, had an outstanding
first half, growing its revenue by 24%. This was achieved through
the extended distribution of its existing products and the
continued growth of new products, including the significant launch
of its new range of Tile Vents. These have been very well received
by the marketplace for their quality and service proposition and
take Timloc into a new distribution channel of roofing
merchants.
Despite the challenges of cost increases, which were
successfully passed on, the Housebuilding Products Division managed
to increase its operating margin to a record 23.0%. Improved
efficiencies, outstanding next day service and rigorous cost
controls contributed significantly to this performance.
Timloc's continued investment and focus on sustainability,
including being the first building products company to become a
carbon neutral manufacturer, leaves it well positioned to support
the Housebuilders drive to build carbon zero homes. During 2022
Timloc moved all of its company vehicles to fully electric.
Strategic Overview
The significant improvement in the Group's performance across
the last two years emanate from the execution of the Group's
strategy which includes the stated objectives of:
Short-term:
-- Continuing to simplify, streamline and reduce fixed costs across the Group.
Long-term:
-- Drive organic growth across the Group by increasing market
share and entering adjacent categories.
-- Continual efficiency improvements.
-- Geographical expansion within selected territories.
-- New product development focused on environmental and sustainable solutions.
-- Bolt-on M&A to expand products and markets.
-- Use of sustainable materials with recycled and fully recyclable materials.
We have managed to streamline the business and have removed
reasonable levels of cost in the last three years, while continuing
to invest in capacity and capability. The Group's full year
operating margin from its continuing operations increased from 8.4%
in FY20 to 14.9% in FY22, and our medium term target is to increase
this to between 15% and 20%.
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 18% increase in UK revenues is testament to
that.
Alumasc is also in a very strong position to benefit from the
move towards sustainable construction and green buildings, both in
terms of its own actions and through the development of its
portfolio of products to manage energy consumption in buildings, to
produce a greener built environment, and to manage the scarce
resource of water. Many internal initiatives have also been taken
to act in an environmentally sustainable manner, including the
sourcing of electricity from renewable sources for 100% of the
Group's supply. The Group's Net Zero planning is underway.
Financial Review
Discontinued operations
The Group sold Levolux Ltd on 26 August 2022, for an initial
consideration of GBP1. Additional consideration, contingent on a
subsequent sale of the business, is unlikely to be paid and has not
been included in the loss on disposal. Levolux's trading results up
to the date of disposal, which were formerly reported within the
Building Envelope division, have been presented within discontinued
operations, together with the loss arising on disposal. Results for
H1 FY22 have been re-presented accordingly.
Tax rate and earnings per share
The Group's underlying tax rate was 21.2%, above the H1 FY22
rate of 19.4% reflecting the increase of UK corporation tax rate
from 19% to 25% which comes into effect from April 2023, part way
through our financial year ending 30 June 2023. Underlying earnings
per share for the period were 12.3p, 12.8% lower than H1 FY22
(14.1p), reflecting the lower underlying profit before tax and the
higher effective tax rate. Basic earnings per share were 7.5p (H1
FY22: 11.2p).
Cash flows and net debt
H1 FY23 H1 FY22
GBPm GBPm
Underlying operating profit from continuing
operations 6.0 6.5
Underlying depreciation/amortisation 1.4 1.3
-------- ----------
Underlying EBITDA 7.4 7.8
Change in working capital (1.9) (2.1)
Deferred VAT paid - (0.6)
Operating cash flow from continuing
operations 5.5 5.1
Discontinued operation - (0.7)
-------- ----------
Operating cash flow from continuing
and discontinued operations 5.5 4.4
Capital expenditure (1.4) (1.4)
Interest (0.3) (0.2)
Tax (0.1) (1.3)
Pension deficit funding (1.0) (1.3)
Lease payments (0.4) (0.4)
Dividend payments (2.4) (2.2)
Purchase of own shares (0.1) (0.4)
-------- ----------
Sub total (0.2) (2.8)
Cash outflow on Levolux disposal (1.7) -
Other non-underlying payments (0.2) (0.3)
Net cash flow (2.1) (3.1)
======== ==========
Net bank debt at 31 December 6.8 4.1
======== ========
The Group's operating cash inflow was GBP5.5m (H1 FY22:
GBP4.4m). Operating cash inflow from continuing operations as a
percentage of underlying operating profit was 92% (H1 FY22: 78%).
Supply chain disruption and cost price inflation eased over the
period, allowing partial reversal of the selective inventory
investments made over FY22 to maintain customer service. Provided
these pressures continue to ease, this trend will continue in H2
FY23. Average trade working capital as a percentage of sales for
the half year was 19.4% (H1 FY22: 14.6%).
Capital expenditure was GBP1.4m (H1 FY22: GBP1.4m), representing
111% of depreciation (H1 FY22: 111%). Key investments were made on
capacity/capability upgrades (GBP0.9m), tooling for new products
(GBP0.4m) and system upgrades (GBP0.1m).
Tax paid of GBP0.1m included the benefit of the capital
allowance super-deduction, which is in place until April 2023.
The GBP1.0m (H1 FY22: GBP1.3m) of pension fund payments reflects
the GBP1.1m reduction in annual employer contributions, from 1
October 2022, agreed at the latest triennial valuation.
The disposal of Levolux, which completed on 26 August 2022, led
to a GBP1.7m cash outflow in the period, which represented
transaction costs together with cash held by Levolux on
disposal.
The net cash outflow for the period was GBP2.1m (H1 FY22:
GBP3.1m). Net bank debt at December 2022 was GBP6.8m (December
2021: GBP4.1m).
Pensions and net assets
The Group's IAS19 pension deficit increased to GBP8.4m at
December 2022 (June 2022: GBP2.1m, December 2021: GBP2.5m), as a
result of market volatility reducing the value of the scheme's
growth assets. This reduction exceeds the reduction in liabilities
over the period, driven by the increase in bond yields, which was
partially hedged, as intended, by matching assets. The deficit
remains within performance scenarios considered at the 2022
triennial valuation, and the Group continues to expect the lower
level of contributions agreed with trustees to bring the scheme to
a fully funded position over a reasonable timeframe.
Group net assets decreased in the period by GBP5.0m to GBP20.7m,
as the retained profit was exceeded by the increase in pension
deficit, payment of the final dividend for FY22 and the loss on
disposal of Levolux. Post tax return on investment (rolling twelve
month underlying operating profit from continuing operations
divided by capital invested) was 23.1% (December 2022: 19.0%, June
2022: 25.8%).
Interim Dividend
The Board has decided to declare an increased interim dividend
of 3.40p (H1 FY22: 3.35p) per ordinary share, payable on 6 April
2023 to shareholders on the register on 24 February 2023.
Outlook
The Group has entered the second half with encouraging momentum,
and a record half year order book fortified by the GBP7.0 m+ Chek
Lap Kok Airport project. As a result, the Board remains confident
in the Group achieving its full year expectations.
Whilst market expectations remain uncertain in the near term,
the Group continues to demonstrate its ability to outperform
underlying markets, through innovation and service, as well as
manage costs and improve efficiency. With the majority of revenues
directly linked to sustainability benefits to its customers, the
Board remains confident in the significant opportunity available to
the Group over the longer term.
Paul Hooper, Chief Executive
7 February 2023
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
for the half year to 31 December 2022
Year to
Half year to 31 December Half year to 31 December 30 June
2022 2021 (restated)* 2022
Non-underlying Non-underlying
Underlying Total Underlying Total Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Continuing operations: Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 5 44,953 - 44,953 42,649 - 42,649 89,381
Cost of sales (28,449) - (28,449) (26,889) - (26,889) (56,015)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Gross profit 16,504 - 16,504 15,760 - 15,760 33,366
Net operating expenses
Net operating expenses
before non-underlying
items (10,499) - (10,499) (9,224) - (9,224) (20,033)
Other non-underlying
items 4 - (229) (229) - (35) (35) (634)
Net operating expenses (10,499) (229) (10,728) (9,224) (35) (9,259) (20,667)
4,
Operating profit 5 6,005 (229) 5,776 6,536 (35) 6,501 12,699
Net finance costs 7 (419) (24) (443) (265) (67) (332) (668)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit before taxation 5,586 (253) 5,333 6,271 (102) 6,169 12,031
Tax expense 8 (1,184) 337 (847) (1,217) (34) (1,251) (2,421)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit for the period
from continuing operations 4,402 84 4,486 5,054 (136) 4,918 9,610
Discontinued operations:
Loss after taxation
for the period from
discontinued operations 6 - (1,795) (1,795) (816) (84) (900) (16,657)
Profit/(loss) for
the period 4,402 (1,711) 2,691 4,238 (220) 4,018 (7,047)
=========== ============== =========== =========== ============== =========== ==========
Other comprehensive
income:
Items that will not
be reclassified to
profit or loss:
Actuarial (loss)/gain
on defined benefit
pensions, net of tax (5,404) 616 (25)
----------- ----------- ----------
Items that are or
may be reclassified
subsequently to profit
or loss:
Effective portion
of changes in fair
value of cash flow
hedges, net of tax (27) 83 480
Exchange differences
on retranslation of
foreign operations 12 10 161
(15) 93 641
----------- ----------- ----------
Other comprehensive
(loss)/gain for the
period, net of tax (5,419) 709 616
----------- ----------- ----------
Total comprehensive
(loss)/profit for
the period, net of
tax (2,728) 4,727 (6,431)
=========== =========== ==========
Earnings per share: Pence Pence Pence
Basic earnings per
share
* Continuing operations 11 12.5 13.7 26.8
* Discontinued operations (5.0) (2.5) (46.5)
11 7.5 11.2 (19.7)
=========== =========== ==========
Diluted earnings
per share
* Continuing operations 12.4 13.5 26.4
* Discontinued operations (5.0) (2.5) (46.5)
11 7.4 11.0 (20.1)
=========== =========== ==========
* The results for the half year to 31 December 2021 have been
re-presented to show the Levolux business as a discontinued
operation.
Reconciliations of underlying to statutory profit and earnings
per share are provided in notes 4 and 11 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
at 31 December 2022
31 December 31 December 30 June
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment
- owned assets 12,733 12,368 12,573
Property, plant and equipment
- right of use assets 4,444 5,081 4,926
Goodwill 8,526 18,705 8,526
Other intangible assets 2,035 3,152 2,126
Deferred tax assets 2,094 630 529
-------------- ------------- -----------
29,832 39,936 28,680
Current assets
Inventories 14,376 13,488 13,394
Trade and other receivables 15,462 16,895 18,786
Derivative financial assets 314 - 325
Cash at bank 12 5,962 2,878 8,284
36,114 33,261 40,789
Total assets 65,946 73,197 69,469
-------------- ------------- -----------
Liabilities
Non-current liabilities
Interest bearing loans and
borrowings 12 (12,782) (6,963) (13,000)
Lease liability (3,696) (4,475) (4,251)
Employee benefits payable (8,375) (2,520) (2,114)
Provisions (811) (1,251) (1,061)
Deferred tax liabilities (1,907) (1,010) (1,730)
-------------- ------------- -----------
(27,571) (16,219) (22,156)
Current liabilities
Trade and other payables (15,259) (16,449) (19,031)
Lease liability (881) (1,145) (881)
Provisions (1,033) (471) (1,360)
Corporation tax payable (491) (419) (309)
Derivative financial liabilities - (165) -
(17,664) (18,649) (21,581)
Total liabilities (45,235) (34,868) (43,737)
-------------- ------------- -----------
Net assets 20,711 38,329 25,732
============== ============= ===========
Equity
Share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own shares (587) (435) (601)
Hedging reserve 236 (134) 263
Foreign currency reserve 228 65 216
Profit and loss account reserve 15,872 33,871 20,892
Total equity 20,711 38,329 25,732
============== ============= ===========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2022
Half year Half year
to to Year to
31 December 31 December 30 June
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Operating activities
Operating profit from continuing
operations 5,776 6,501 12,699
Adjustments for:
Depreciation 1,249 1,137 2,459
Amortisation 98 90 257
Loss/(gain) on disposal of property,
plant and equipment 12 17 (18)
Increase in inventories (982) (2,617) (2,573)
Decrease/(increase) in receivables 3,324 3,175 (2,536)
(Decrease)/increase in trade and
other payables (3,796) (3,218) 279
Movement in provisions (577) (379) (298)
Cash contributions to retirement
benefit schemes (967) (1,307) (2,561)
Share based payments 130 50 118
-------------- ------------- -----------
Cash generated by operating activities
of continuing operations 4,267 3,449 7,826
Operating loss from discontinued
operations - (1,097) (2,125)
Depreciation/amortisation - 113 224
Movement in working capital from
discontinued operations - 259 (438)
-------------- ------------- -----------
Cash utilised by operating activities
of discontinued operations - (725) (2,339)
Tax paid (139) (1,320) (1,615)
Net cash inflow from operating
activities 4,128 1,404 3,872
-------------- ------------- -----------
Investing activities
Purchase of property, plant and
equipment (1,378) (1,361) (2,449)
Payments to acquire intangible fixed
assets (7) (5) (123)
Proceeds from sales of property,
plant and equipment - - 22
Payments for disposal costs of discontinued
operation (1,686) - -
Net cash outflow from investing
activities (3,071) (1,366) (2,550)
-------------- ------------- -----------
Financing activities
Bank interest paid (264) (141) (356)
Equity dividends paid (2,381) (2,233) (3,434)
Draw down of amounts borrowed - 1,000 7,000
Principal paid on lease liabilities (362) (352) (713)
Interest paid on lease liabilities (80) (83) (169)
Purchase of own shares (54) (430) (526)
Exercise of share based payments 12 70 -
Refinancing costs (262) - -
Net cash (outflow)/inflow from
financing activities (3,391) (2,169) 1,802
-------------- ------------- -----------
Net (decrease)/increase in cash
at bank and bank overdrafts (2,334) (2,131) 3,124
Net cash at bank and bank overdraft
brought forward 8,284 4,999 4,999
Net (decrease)/increase in cash
at bank and bank overdraft (2,334) (2,131) 3,124
Effect of foreign exchange rate
changes 12 10 161
Net cash at bank and bank overdraft
carried forward 12 5,962 2,878 8,284
============== ============= ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2022
Profit
Capital Foreign and loss
Share Share reserve - Hedging currency 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 2022 4,517 445 (601) 263 216 20,892 25,732
Profit for the period - - - - - 2,691 2,691
Exchange differences on retranslation
of foreign operations - - - - 12 - 12
Net loss on cash flow hedges - - - (10) - - (10)
Tax on derivative financial liability - - - (17) - - (17)
Share based payments - - - - - 130 130
Actuarial loss on defined benefit
pension schemes, net of tax - - - - - (5,404) (5,404)
Acquisition of own shares - - (55) - - - (55)
Own shares used to satisfy exercise
of share awards - - 69 - - - 69
Exercise of share based incentives - - - - - (56) (56)
Dividends - - - - - (2,381) (2,381)
At 31 December 2022 4,517 445 (587) 236 228 15,872 20,711
======= ======= ========== ========= ========== ========== =======
Profit
Capital Foreign and loss
Share Share reserve - Hedging currency 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 2021 4,517 445 (406) (217) 55 31,751 36,145
Profit for the period - - - - - 4,018 4,018
Exchange differences on retranslation
of foreign operations - - - - 10 - 10
Net gain on cash flow hedges - - - 103 - - 103
Tax on derivative financial liability - - - (20) - - (20)
Share based payments - - - - - 50 50
Actuarial gain on defined benefit
pension schemes, net of tax - - - - - 616 616
Own shares used to satisfy exercise
of share awards - - 402 - - - 402
Acquisition of own shares - - (431) - - - (431)
Exercise of share based incentives - - - - - (331) (331)
Dividends - - - - - (2,233) (2,233)
At 31 December 2021 4,517 445 (435) (134) 65 33,871 38,329
======= ======= ========== ========= ========== ========== =======
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
for the half year to 31 December 2022
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 Financial Reporting Standards (IFRS)
in conformity with the requirements of the Companies Act 2006 that
are effective at 31 December 2022.
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 2022 and in
accordance with AIM Rule 18, and the same accounting policies will
be adopted in the 2023 annual financial statements.
The consolidated financial statements of the Group as at and for
the year ended 30 June 2022 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
2022 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 2022 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 2022.
These condensed consolidated interim financial statements were
approved by the Board of Directors on
7 February 2023.
The Group performed ahead of the Base Case trading scenario
modelled as part of the 30 June 2022 year end Going Concern review,
and also compared to the stress testing performed. 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 2022, namely the valuation of
defined benefit pension obligations and the recognition of revenue
and profit on contracts with customers where revenue is recognised
over time.
During the six months ended 31 December 2022, management
reassessed and updated its estimates in respect of retirement
benefit obligations based on market data available at 31 December
2022. The resulting impact was a GBP7.2 million pre-tax actuarial
loss, calculated using IAS 19 conventions, recognised in the six
month period to 31 December 2022.
3. Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
provided on pages 46 to 49 of Alumasc's Report and Accounts for the
year ended 30 June 2022. 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 inflation and interest increases, negatively
impacting the Group's construction markets;
- Prolonged period of bad weather impacting the Group's construction markets; and
- Potential impact of the current geopolitical uncertainty globally.
4. Underlying to statutory profit reconciliation
Half year Half year Year to
to 31 December to 31 December 30 June
Profit before tax 2022 2021 2022
GBP'000 GBP'000 GBP'000
Underlying profit before tax from continuing
operations 5,586 6,271 12,725
Brand amortisation (35) (35) (70)
IAS 19 net pension scheme finance costs (24) (67) (60)
Restructuring costs (194) - (564)
Reported profit before tax from continuing
operations 5,333 6,169 12,031
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
Operating profit 2022 2021 2022
GBP'000 GBP'000 GBP'000
Underlying operating profit from continuing
operations 6,005 6,536 13,333
Brand amortisation (35) (35) (70)
Restructuring costs (194) - (564)
Reported operating profit from continuing
operations 5,776 6,501 12,699
=============== =============== ========
In the presentation of underlying profits, management disclose
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 would typically be excluded in
assessing the value of the business.
In addition, management has presented certain 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. In the period to December
2022, these related to one-off professional fees incurred in
resolving a commercial dispute.
5. Segmental analysis
In accordance with IFRS 8 Operating Segments, the segmental
analysis below follows the Group's internal management reporting
structure.
Half year Half year Year to
to 31 December to 31 December 30 June
Revenue 2022 2021 2022
GBP'000 GBP'000 GBP'000
Water Management 19,581 22,783 47,564
Building Envelope 18,324 14,197 29,389
Housebuilding Products 7,048 5,669 12,428
Group Revenue 44,953 42,649 89,381
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
Operating profit 2022 2021 2022
GBP'000 GBP'000 GBP'000
Water Management 2,510 4,118 8,753
Building Envelope 2,589 1,894 3,580
Housebuilding Products 1,622 1,096 2,447
Unallocated central costs (716) (572) (1,447)
Underlying operating profit from continuing
operations 6,005 6,536 13,333
Non-underlying items (229) (35) (634)
Operating profit from continuing operations 5,776 6,501 12,699
=============== =============== ========
6. Discontinued operations
Discontinued operations relate to the Levolux business which was
divested by the Group on 26 August 2022 and therefore disclosed as
held for sale at 30 June 2022. At the year end the discontinued
operation had liabilities of GBP3,859,000. The assets held for
resale were written down to a value equivalent to the liabilities
to reflect the sales proceeds of GBP1 received on 26 August 2022.
In the period to 31 December 2022, a further loss on disposal of
GBP1,795,000 was recorded, representing cash held by Levolux at the
date of disposal, other related write downs and transaction
costs.
The results of Levolux included in the condensed consolidated
interim statement of comprehensive income are as follows:
Half year Half year Year to
to 31 December to 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
Revenue 436 3,620 7,820
Underlying operating loss - (1,013) (1,957)
Brand amortisation - (84) (168)
Write down of goodwill - - (10,179)
Write down of brand - - (874)
Write down of Assets held for sale - - (3,859)
Loss on disposal (1,795) - -
--------------- --------------- --------
Loss before taxation (1,795) (1,097) (17,037)
Tax credit - 197 380
Loss after taxation (1,795) (900) (16,657)
=============== =============== ========
7. Finance expenses
Half year Half year
to to Year to
31 December 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
Finance costs - Bank overdrafts 12 19 48
- Revolving credit facility 327 163 391
- Interest on lease liabilities 80 83 169
------------ ------------ --------
419 265 608
- IAS 19 net pension scheme finance
costs 24 67 60
443 332 668
============ ============ ========
8. Tax expense
Half year Half year Year to
to 31 December to 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
Current tax:
UK corporation tax - continuing operations 438 868 1,094
- discontinued operations - (197) (380)
Overseas tax 10 54 207
Amounts over provided in previous years - - (16)
Total current tax 448 725 905
Deferred tax:
Origination and reversal of temporary
differences 399 329 833
Amounts under provided in previous
years - - 78
Rate change adjustment - - 225
Total deferred tax 847 329 1,136
Total tax expense 847 1,054 2,041
---------------- ---------------- ---------
Tax charge on continuing operations 847 1,251 2,421
Tax credit on discontinued operations - (197) (380)
Total tax expense 847 1,054 2,041
================ ================ =========
Deferred tax recognised in other comprehensive
income:
Actuarial (losses)/gains on pension
schemes (1,801) 205 (9)
Cash flow hedge 17 20 113
Tax (credited)/charged to other comprehensive
income (1,784) 225 104
Total tax (credit)/charge in the statement
of comprehensive income (937) 1,279 2,145
======== ====== ======
9. Dividends
The Directors have approved an interim dividend per share of
3.40 pence (2021/22: 3.35 pence) which will be paid on 6 April 2023
to shareholders on the register at the close of business on 24
February 2023. The cash cost of the dividend is expected to be
GBP1,217,000. 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 6.65 pence in respect of
the 2021/22 financial year was paid at a cash cost of GBP2,381,000
during the six months to 31 December 2022.
10. Share Based Payments
During the period the Group awarded 225,000 options (2021/22:
160,000) under the Executive Share Option Scheme ("ESOS"). These
options have an exercise price of 150 pence and require certain
criteria to be fulfilled before vesting. 15,380 existing options
were exercised during the period (2021/22: 78,810) and 104,620
existing options lapsed (2021/22: 41,190).
Total awards granted under the Group's Long Term Incentive Plans
("LTIP") amounted to 307,264 (2021/22: 214,020). LTIP awards have
no exercise price but are dependent on certain vesting criteria
being met. 22,175 existing LTIP awards were exercised during the
period (2021/22: 228,511) and 48,717 existing LTIP awards lapsed
(2021/22: 109,713).
11. 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
2022 2021 2022
GBP'000 GBP'000 GBP'000
Net profit attributable to equity
holders - continuing operations 4,486 4,918 9,610
Net profit attributable to equity
holders - discontinued operations (1,795) (900) (16,657)
---------------- ---------------- -------------
2,691 4,018 (7,047)
================ ================ =============
000s 000s 000s
Basic weighted average number of
shares 35,806 35,821 35,825
Dilutive potential ordinary shares
- employee share options 334 549 586
Diluted weighted average number of
shares 36,140 36,370 36,411
================ ================ ===============
Half year Half year Year to
to 31 December to 31 December 30 June
2022 2021 2022
Pence Pence Pence
Basic earnings per share:
Continuing operations 12.5 13.7 26.8
Discontinued operations (5.0) (2.5) (46.5)
---------------- ---------------- ---------------
7.5 11.2 (19.7)
================ ================ ===============
Diluted earnings per share:
Continuing operations 12.4 13.5 26.4
Discontinued operations (5.0) (2.5) (46.5)
---------------- ---------------- ---------------
7.4 11.0 (20.1)
================ ================ ===============
11. Earnings per share (continued)
Calculation of underlying earnings per share:
Half year Half year Year to
to 31 December to 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
Reported profit before taxation from
continuing operations 5,333 6,169 12,031
Brand amortisation 35 35 70
IAS 19 net pension scheme finance
costs 24 67 60
Restructuring costs 194 - 564
Underlying profit before taxation
from continuing operations 5,586 6,271 12,725
Tax at underlying Group tax rate
of 21.2%
(2021/22 first half year: 19.4%;
full year: 19.4%) (1,184) (1,217) (2,469)
Underlying earnings from continuing
operations 4,402 5,054 10,256
---------------- ---------------- -------------
Weighted average number of shares 35,806 35,821 35,825
---------------- ---------------- -------------
Underlying earnings per share from
continuing operations 12.3p 14.1p 28.6p
================ ================ =============
12. Movement in borrowings
Cash at
bank /bank Bank loans Net bank Lease Total borrowings
overdrafts cash/(debt) liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2022 8,284 (13,000) (4,716) (5,132) (9,848)
Cash flow movements (2,334) 262 (2,072) 362 (1,710)
Non-cash movements - (44) (44) 193 149
Effect of foreign exchange
rates 12 - 12 - 12
At 31 December 2022 5,962 (12,782) (6,820) (4,577) (11,397)
============ ============ ============= ============= ==================
Cash at
bank /bank Bank loans Net bank Lease liabilities Total borrowings
overdrafts cash/(debt)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2021 4,999 (5,936) (937) (5,606) (6,543)
Cash flow movements (2,131) (1,000) (3,131) 352 (2,779)
Non-cash movements - (27) (27) (366) (393)
Effect of foreign exchange
rates 10 - 10 - 10
At 31 December 2021 2,878 (6,963) (4,085) (5,620) (9,705)
=========== ============ ============= =================== ==================
13. 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 note
29 of Alumasc's Report and Accounts for the year ended 30 June
2022.
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
Paul Hooper Simon Dray
Chief Executive Group Finance Director
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