TIDMASBE
RNS Number : 5202B
Associated British Engineering PLC
10 June 2021
ASSOCIATED BRITISH ENGINEERING PLC
INTERIM REPORT
FOR THE SIX MONTHSED
31 MARCH 2021
ASSOCIATED BRITISH ENGINEERING PLC
INTERIM REPORT
FOR THE SIX MONTHSED 31 MARCH 2021
CONTENTS PAGE
Chairman's statement 1
Responsibility statement 2
Group income statement 3
Group statement of comprehensive income 4
Group interim balance sheet 5
Group interim statement of changes in shareholders'
equity 6
Group interim cash flow statement 7 - 8
Notes to the interim report 9 - 15
ASSOCIATED BRITISH ENGINEERING PLC
CHAIRMAN'S STATEMENT
INTERIM REPORT FOR THE SIX MONTHSED 31 MARCH 2021
SUMMARY OF RESULTS Six months Period to
to 30 September
31 March 2021 2020
GBP'000 GBP'000
Revenue - 165
(Loss)/profit before tax (49) 145
Profit on disposal of discontinued
operations - 5,239
Earnings per share
Basic (2.3p) 263.0p
Diluted (2.3p) 263.0p
As shareholders are aware the Company disposed of its interest
in British Polar Engines Limited on 4 August 2020 immediately
following authorisation by shareholders; the audited results for
the period to 30 September 2020 were published on 31 March 2021 and
are available from our web site. Although there was an audit
qualification, which related to our inability to access or be
provided with information at British Polar Engines, this did not
relate to the balance sheet as at 30 September 2020 - so we started
with a clean base.
You will see from our financial numbers and balance sheet that
in the period there was a loss of GBP49k that covered company
expenses and was offset by realising gains on the sales of our
investments of GBP283k, see page 6 of the accounts, GBP140k that
related to prior periods and GBP143k that related to this 6 month
period. This is due to the increase in value of the Company's
investments in the period.
As the investments have gained in value, the Company has started
the process of realising its investments. It is expected that these
and future capital gains will be tax free due to inherited capital
gains tax losses so no provision has been made for any tax
payments. The Board will take the opportunity to liquidate
investments and invest for future growth when suitable
opportunities occur.
Your Company is now in a position to talk to potential
acquisitions without having to consider the impact of the pension
fund and related historical deficits. The Board is now committed to
using all its efforts to identifying and acquiring a new business
with growth potential and hopefully showing profits for our group
and a financial return for our patient shareholders.
The Board continues to review options for the future development
of the Group.
Colin Weinberg and Rupert Pearce Gould
Chairmen
8 June 2021
1
ASSOCIATED BRITISH ENGINEERING PLC
RESPONSIBILITY STATEMENT
INTERIM REPORT FOR THE SIX MONTHSED 31 MARCH 2021
The Directors of the Company confirm to the best of their
knowledge that:
a) the Interim Report has been prepared in accordance with IAS 34;
b) the Interim Report includes a fair view of the information
required by DTR 4.2.7R, being an indication of the important events
that have occurred during the first six months of the financial
year and a description of the principal risks and uncertainties for
the remaining six months of the year; and
c) the Interim Report includes a fair review of the information
required by DTR 4.2.8R, being disclosure of related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the group during that period;
and any changes in the related party transactions described in the
latest annual financial statements that could do so.
By order of the Board
Colin Weinberg and Rupert Pearce Gould
Chairmen
8 June 2021
2
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INCOME STATEMENT
FOR THE SIX MONTHSED 31 MARCH 2021
Six months Period to
to 30 September
31 March 2020
2021
GBP'000 GBP'000
REVENUE - 165
Operating costs (50) (26)
OPERATING (LOSS)/PROFIT (50) 139
Finance expense - -
Finance income - 1
Other income 1 5
------------------------ -----------------------
(LOSS)/PROFIT BEFORE TAXATION (49) 145
Taxation - -
------------------------ -----------------------
(LOSS)/PROFIT FOR THE PERIOD
FROM CONTINUOUS OPERATIONS (49) 145
======================== =======================
PROFIT ON DISPOSAL OF DISCONTINUED
OPERATIONS - 5,239
TOTAL (LOSS)/PROFIT FOR THE
PERIOD (49) 5,384
======================== =======================
(LOSS)/PROFIT PER SHARE ON
(LOSS)/PROFIT FOR THE PERIOD
ATTRIBUATABLE TO EQUITY HOLDERS
OF THE PARENT COMPANY
Basic and diluted profit from - 256.0p
discontinued operations (2.3p) 263.0p
Basic and diluted (loss)/profit
======================== =======================
(Loss)/profit for the period
attributable to:
Owners of the company (49) 5,384
Non-controlling interest - -
------------------------ -----------------------
(49) 5,384
======================== =======================
Profit on disposal of discontinued operations reported in the
comparative period relates to the disposal of
British Polar Engines Limited ("BPE"), the Group's main trading
subsidiary, completed on 4 August 2020,
details of which were disclosed in the statutory consolidated
financial statements of Associated British
Engineering Plc for the period to 30 September 2020.
3
ASSOCIATED BRITISH ENGINEERING PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 31 MARCH 2021
Six months Period to
to 30 September
30 March 2020
2021
GBP'000 GBP'000
(Loss)/profit for the period (49) 5,384
----------- ---------------------
Other comprehensive income
Gain on available for sale financial
asset
Gains released to Retained Earnings 143 -
Unrealised gains (*) 373 327
Other comprehensive income for the
period 516 327
----------- ---------------------
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR 467 5,711
=========== =====================
Total comprehensive income attributable
to:
Owners of the Company 467 5,711
Non-controlling interests - -
----------- ---------------------
467 5,711
=========== =====================
(*) = Items which may subsequently be reclassified to the Income
Statement.
All activities are classified as continuing.
4
ASSOCIATED BRITISH ENGINEERING PLC Company Number: 00110663
GROUP INTERIM BALANCE SHEET
AS AT 31 MARCH 2021
At Period to
31 March 30 September
2021 2020
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment - -
Available for sale financial assets 622 413
---------- --------------
622 413
Current assets
Property, plant and equipment - -
Available for sale financial assets - -
Inventories - -
Trade and other receivables 99 24
Cash and cash equivalents 383 186
---------- --------------
482 210
---------- --------------
Total assets 1,104 623
========== ==============
EQUITY AND LIABILITIES
Called up share capital 51 51
Deferred shares 2,594 2,594
Share premium account 5,370 5,370
Other components of equity 11 11
Fair value reserve 558 270
Revaluation reserve - -
Retained earnings (7,526) (7,705)
---------- --------------
Equity attributable to the Company's
Equity Shareholders 1,058 591
Non-controlling interests - -
---------- --------------
1,058 591
---------- --------------
LIABILITIES
Non-current liabilities
Retirement benefit obligation - -
Obligation under finance leases - -
- -
---------- --------------
Current liabilities
Trade and other payables 46 32
46 32
---------- --------------
Total liabilities 46 32
---------- --------------
Total equity and liabilities 1,104 623
========== ==============
5
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 MARCH 2021
Attributable
Share Share Deferred Other Fair value Revaluation Retained to owners
Capital Premium Shares Reserve reserve reserve Earnings of parent Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April
2019 51 5,370 2,594 11 805 550 (13,089) (3,708) (3,708)
------------------ -------------------- ------------------- ------------------- ------------------- ---------------------- ---------------------- --------------------- ------------------------
Profit for the
period - - - - - - 145 145 145
Other
comprehensive
income
Disposal of
subsidiary - - - - (862) (550) 5,239 3,827 3,827
Unrealised gain
on Available
For Sale
Financial
Assets (*) - - - - 327 - - 327 327
------------------ -------------------- ------------------- ------------------- ------------------- ---------------------- ---------------------- --------------------- ------------------------
Balance at 1
October
2020 51 5,370 2,594 11 270 - (7,705) 591 591
------------------ -------------------- ------------------- ------------------- ------------------- ---------------------- ---------------------- --------------------- ------------------------
Loss for the
period - - - - - - (49) (49) (49)
Other
comprehensive
income
Unrealised gain
on Available
For Sale
Financial
Assets - - - - 516 - - 516 516
Realised gain
on Available
For Sale
Financial
Assets
Fair Value
adjustments - - - - 55 - (55) - -
Realised
gains - - - - (283) - 283 - -
Balance at 31
March 2021 51 5,370 2,594 11 558 - (7,526) 1,058 1,058
================== ==================== =================== =================== =================== ====================== ====================== ===================== ========================
(*) Items which may subsequently be reclassified to the Income Statement.
6
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INTERIM CASH FLOW STATEMENT
FOR THE SIX MONTHSED 31 MARCH 2021
Six months Period to
to 30 September
31 March 2020
2021
GBP'000 GBP'000
Cash flows from operating activities
Cash used in operations (110) 91
Interest received - -
Interest paid - -
Taxation - -
--------------------- --------------------
Net cash used in operating activities (110) 91
--------------------- --------------------
Cash flows from investing activities
Proceeds from sale of equipment - -
Purchase of equipment - -
Movements investments - (65)
Sale proceeds of investments held 307 -
for sale
Sale proceeds from subsidiary disposal/loan
assignment - 100
--------------------- --------------------
Net cash used in investing activities 307 35
--------------------- --------------------
Net increase in cash and cash equivalents 197 126
Cash decrease on disposal of subsidiary - (329)
Cash and cash equivalents at beginning
of period 186 389
--------------------- --------------------
Cash and cash equivalents at end
of period 383 186
===================== ====================
7
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INTERIM CASH FLOW STATEMENT (continued)
FOR THE SIX MONTHSED 31 MARCH 2021
CASH FLOW FROM OPERATING ACTIVITIES Six months Period
to to
31 March 30 September
2021 2020
GBP'000 GBP'000
(Loss)/Profit before taxation (49) 145
Adjustments for:
Depreciation - -
Interest income - -
Finance expense - -
Foreign exchange difference - -
Profit on disposal of equipment - -
Changes in working capital:
Increase in trade and other receivables (75) (20)
Increase/(decrease) in payables 14 (34)
----------- --------------
(110) 91
Taxes paid - -
Cash used in operations (110) 91
=========== ==============
8
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHSED 31 MARCH 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company is incorporated in the United Kingdom under the
Companies Act 2006.
This unaudited Group Interim Report has been prepared in
accordance with IAS 34 Interim Financial Reporting and the
disclosure requirements of the Listing Rules. The policies set out
below have been consistently applied to all periods presented.
This Group Interim Report is not audited.
These financial statements are for the period 1 October 2020 to
31 March 2021. The comparative figures are for the period 1 April
2019 to 30 September 2020 (18 months). The last interim period of
account for which interim financial statements were prepared was
for the 6 months ended 30 September 2019. As such, these numbers
have not been included as they are not directly comparable and not
considered to enhance the understanding of the reader. In addition,
the directly comparable 6 month period from 1 October 2019 to 31
March 2020 has not been included as the directors do not have
access to the figures for this period. This is referenced in the
below disclaimer of opinion which was included in the Audit Report
in the financial statements for the 18 month period ended 30
September 2020.
On 4 August 2020 the company disposed of its investment in
British Polar Engines Limited which was the main trading subsidiary
of Associated British Engineering PLC. We have been unable to
obtain from the management of British Polar Engines Limited details
of the profit and loss account during the period 1 April 2019 until
the date of disposal in August 2020. We are therefore unable to
confirm or verify by alternative means the amounts included in the
consolidated statement of comprehensive income. As a result of this
matter we have been unable to determine whether any adjustments
might have been found necessary to the elements included in the
consolidated statement of comprehensive income or consolidated
statement of cash flows. This has not impacted our work on the
consolidated statement of financial position as at the 30 September
2020 and the remainder of the group, as the assets and liabilities
of the disposed subsidiary are not included at the balance sheet
date. The parent company statement of financial position is also
unaffected as the investment has been disposed.
The results for the period ended 30 September 2020 have been
extracted from the statutory consolidated financial statements of
Associated British Engineering Plc, which are prepared in
accordance with IFRS, as adopted by the EU.
NEW AND AMED STANDARDS ADOPTED BY THE GROUP
The following standards and amendments to existing standards
became effective from 1 January 2020 and are applicable for the
current reporting period:
-- Amendments to IFRS 3, Business Combinations. The amendment
clarifies the definition of a business by providing a new framework
for determining whether transactions should be accounted for as
acquisitions (or disposals) of assets or businesses.
-- Amendments to IAS 1, Presentation of Financial Statements,
and IAS 8, Accounting Policies, Changes in Accounting Estimates and
Errors. The amendments clarify the definition of 'materiality' and
how it should be applied. The amendments also improve the
explanations of the definition and ensure consistency across all
IFRS standards.
-- Amendments to IFRS 9, Financial Instruments, IAS 39,
Financial Instruments: Recognition and Measurement, and IFRS 7,
Financial Instruments: Disclosures. The amendments provide relief
from specific hedge accounting requirements to address the
potential uncertainty caused by the IBOR reform.
9
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NEW AND AMED STANDARDS ADOPTED BY THE GROUP (continued)
The adoption of the above new and revised standards had no
impact on the financial statements of the
Group for the period ended 31 March 2021.
The following amendments to existing standards have been issued,
but will become effective for annual
periods beginning on or after 1 January 2021.
-- Amendments to IAS 1, Presentation of Financial Statements.
The amendments clarify the basis used for the classification of
current and non-current liabilities.
-- Amendments to IAS 8, Accounting policies, Changes in
Accounting Estimates and Errors. The amendments introduce the
definition of an accounting estimate and include other amendments
to IAS 8 to distinguish changes in accounting estimates from
changes in accounting policies.
-- Amendments to IAS 37, Provisions, Contingent Liabilities and
Contingent Assets. The amendments clarify the costs that should be
included when assessing whether a contract is onerous.
GOING CONCERN
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairmen's statement on page 1. The financial
position of the Group, its cash flows and liquidity position are
described in the financial statements.
The Company has sufficient financial resources. As a
consequence, the Directors believe the Company is
well placed to manage its business risks successfully, including
the impact of Covid-19 and Brexit. The Directors regularly review
the forecasts.
In accordance with their responsibilities, the Directors of the
Company have considered the appropriateness of the going concern
basis, which has been used in the preparation of these financial
statements. The Directors have prepared trading and cash flow
forecasts for the Company, which take into account the future
performance of the Company and consider the impact of the Covid-19
pandemic. The forecasts, including allowance for reasonable
possible changes in trading performance indicate that the Company
should be able to operate for at least 12 months from the approval
of these financial statements.
The forecasts for the 12 months from approval of these financial
statements have been considered. As a result of the above
assessment, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence
for a minimum period of 12 months from the date
of signing these financial statements. Thus, they are adopting
the going concern basis in preparing the annual financial
statements.
BASIS OF CONSOLIDATION
The Group Interim Report incorporates the financial statements
of Associated British Engineering Plc and its subsidiary
undertakings for the six months to 31 March 2021. All inter-company
balances and transactions have been eliminated in full. The Group
Interim Report includes the results of subsidiaries acquired or
disposed of during the year from or to the effective date of
acquisition or disposal.
A subsidiary is an entity controlled, either directly or
indirectly, by the Company, where control is the power
to govern the financial and operating policies of the entity so
as to obtain benefit from its activities. The acquisition method of
accounting is used to account for acquisition of subsidiaries by
the Group. The cost on an acquisition is measured as the fair value
of the assets given, equity instruments issued, and liabilities
incurred or assumed at the date of exchange. Acquisition costs are
expensed in the consolidated income statement for the period in
which they are incurred.
10
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHSED 31 MARCH 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The consolidated financial statements consist of the results of
the following entities:
Entity Summary Description
Associated British Engineering Plc (ABE) Holding Company
Akoris Trading Ltd (AT) Trading Company
REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration
receivable by the Group for goods supplied and services provided,
excluding value added tax and trade discounts. Revenue from the
sale of spare parts is recognised when the goods are dispatched or,
if under a bill and hold arrangement, when they are available for
despatch to a specific customer. Revenue from the sale of engines
is recognised in accordance with the performance of contractual
terms and specifically when the engines have been satisfactorily
tested in accordance with contractual terms. Revenue from servicing
and repair work is recognised when the work is completed.
ACCOUNTING ESTIMATES AND JUDGEMENTS
Management are required, in accordance with IFRS, to exercise
judgement and to make estimates and assumptions regarding the
application of accounting policies and the resulting effect on
reported amounts of assets, liabilities, income, and expenses.
These estimates and assumptions are based on historical experience
and a review of current conditions prevailing at the time but
actual results may differ from these estimates. Any such revision
is recognised in the financial statements in the period in which
the change in circumstance is detected.
Accounting Judgement
The key areas where management have exercised judgement in the
period, and the thought process undertaken, are as follows:
Deferred taxation
Judgement is applied by management in determining the extent to
which the recovery of carried forward tax losses is probable for
the purpose of meeting the criteria for recognition as deferred tax
assets.
TAXATION
The tax expense represents the sum of the tax currently payable
and deferred tax.
Current tax payable is based on the taxable profit or loss for
the period. Taxable profit differs from net profit as reported in
the income statement because it excludes items of income or expense
that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. The deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a
transaction, other than a business combination, that at the time of
the transaction affects neither accounting nor taxable profit nor
loss. Deferred tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred tax asset
is realised or the deferred tax liability is settled.
11
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHSED 31 MARCH 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
TAXATION (continued)
Deferred tax is provided on temporary differences arising on
investments in subsidiaries, except where the timing of reversal of
the temporary differences is controlled by the Group and it is
probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax assets are recognised to the
extent that it is probable that future taxable profit will be
available against which the temporary differences can be
utilised.
FOREIGN CURRENCIES
The functional and presentational currency of the parent company
and its subsidiaries is UK Pound Sterling, rounded to the nearest
thousand. Transactions in currencies other than the functional
currency are translated at the rate ruling at the date of the
transaction. At each balance sheet date, monetary assets and
liabilities denominated in foreign currencies are translated at the
rate of exchange ruling at the balance sheet date. Any gains or
losses arising from the transactions are taken to the income
statement.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, demand
deposits, and other short-term highly liquid investments that have
maturities of three months or less from inception, are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
FINANCIAL INSTRUMENTS
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into.
Where the contractual obligations of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities and are presented as such in the balance sheet. Finance
costs and gains or losses relating to financial liabilities are
included in the income statement. Finance costs are calculated so
as to produce a constant rate of charge on the outstanding
liability. Where none of the contractual terms of share capital
meet the definition of a financial liability then this is classed
as an equity instrument. Dividends and distributions relating to
equity instruments are debited direct to equity.
Trade and other receivables
Trade and other receivables are originally recognised at fair
value. Subsequent measurement is at amortised cost using the
effective interest rate method. A provision against trade
receivables is made when there is objective evidence that the group
will not be able to collect all amounts due to it in accordance
with the original terms of those receivables.
Trade and other payables
Trade and other payables are originally recognised at fair
value, net of transaction costs. Subsequent measurement is at
amortised cost using the effective interest rate method.
Investments in securities
Investments are recognised and derecognised on a trade date
where a purchase or sale of an investment is under a contract whose
terms require delivery of the investment within the timeframe
established by the market concerned, and are initially measured at
fair value, with all transaction costs being written off to the
income statement as incurred. Investments are classified as
available for sale and are measured at subsequent reporting dates
at fair value. Gains and losses arising from changes in fair value
of available for sale financial assets are included in other
comprehensive income for the period. When the asset is disposed of
or deemed to be impaired, the cumulative gain or loss is
reclassified from equity reserve to income statement.
12
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHSED 31 MARCH 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLOICIES (continued)
EQUITY AND RESERVES
Share capital represents the nominal value of shares that have
been issued except for the preference shares classified as debt.
Deferred shares represent shares arising from the sub-division of
ordinary shares of GBP2.
Share premium includes any premiums received on issue of share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income
tax benefits. Retained earnings include all current and prior
period retained profits and losses. Available for sale reserve
includes all gains and losses relating to Available for Sale
financial assets. Other reserves relate to movements not classified
in any of the reserves detailed above. Revaluation reserve includes
all gains and losses relating to Property, Plant and Equipment. All
transactions with owners of the parent are recorded separately
within equity.
SEGMENTAL REPORTING
The standard requires financial information to be disclosed in
the financial statements in the same format in which it is
disclosed to the chief operating decision-maker. The chief
decision-maker has been identified as the Board, at which level
strategic decisions are made.
2. SEGMENTAL ANALYSIS
Six months Period
to to
31 March 30 September
2021 2020
GBP'000 GBP'000
United Kingdom - 165
- 165
============= ==============
All revenue originates in the United Kingdom.
In the periods ended 31 March 2021 and 30 September 2020, save
for dollar bank accounts and overseas debtors, all of the assets
held by the Group were located in the United Kingdom and all
capital expenditure was incurred within the United Kingdom.
Operating segments
The following segment information has been prepared in
accordance with IFRS 8, "Operating Segments", which defines
requirements for the disclosure of financial information of an
entity's operating segments.
The Board consider the Group on an individual company basis.
Reports by individual companies are used by the chief
decision-maker in the Group. Significant operating segments are
Associated British Engineering Plc and Akoris Trading Limited.
The Group's operations are located in the United Kingdom. Any
transactions between business units are on normal commercial terms
and conditions.
Akoris Trading Limited is a commodity and natural resource
trading, finance and investment company.
Associated British Engineering Plc is the Group's holding
company.
13
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2021
2. SEGMENTAL ANALYSIS (continued)
Associated
British
Engineering Akoris
Plc Trading Consolidated
Ltd
GBP'000 GBP'000
Six months to 31 March
2021
External sales - - -
Segment result (PBIT) (47) (2) (49)
------------- ------------ ---------------
Net finance expense -
Taxation -
Loss after tax (49)
===============
Other information
Capital additions - - -
Balance sheet
Segment assets 1,074 30 1,104
============= ============ ===============
Period to 30 September
2020
External sales 165 - 165
Segment result (PBIT) 146 (1) 145
------------- ------------ ---------------
Net finance expenses -
Taxation -
Profit after tax 145
===============
Other information
Capital additions - - -
Balance sheet
Segment assets 591 32 623
============= ============ ===============
14
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2021
3. PRINCIPAL RISKS AND UNCERTAINTIES
The main risks arising from the Group's financial instruments
are market risk, liquidity risk and credit risk. Market risk
includes price commodity risk, foreign exchange risk and interest
rate risk. The Group has an exposure to foreign exchange risk to
the extent that investments may be priced in US dollars or other
currencies and has no loans, therefore limited exposure to interest
rate risk.
Cash and cash equivalents held at floating rates expose the
entity to cash flow risk. Interest rate risk is limited to the cash
and cash equivalents.
Based on the balance sheet value of cash and cash equivalents, a
1% change in interest base rates would lead to an increase or
decrease in income and equity of GBP3,828 (2020: GBP1,865).
The Board reviews and agrees policies for managing each of the
above risks and they are summarised below and in the accounting
policies to the Group financial statements. These policies have
been consistently applied throughout the period.
COMMODITY PRICE RISK
The Group holds no stock and as such has no exposure to
commodities.
LIQUIDITY RISK
The Group's liquidity is dependent on the cash balances
available and it is the Group's policy to place surplus cash on
deposit to ensure it has an appropriate rate of return. The Board
reviews an annual 12 month financial projection as well as
information regarding cash balances.
CREDIT RISK
The Group's principal financial assets are cash deposits,
available for sale financial assets and trade and other
receivables. The credit risk associated with the cash is limited as
the counterparties have high credit ratings assigned by
international credit-rating agencies. The principal credit risk
arises therefore from its trade and other receivables and available
for sale financial assets.
15
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