TIDMPLP
RNS Number : 6740X
Polypipe Group PLC
14 August 2018
14 August 2018
Polypipe Group plc
Interim results for the six months ended 30 June 2018
Resilient first half performance, on track for full year
Polypipe Group plc ("Polypipe", the "Company" or the "Group"), a
leading manufacturer of plastic piping and ventilation systems for
the residential, commercial, civils and infrastructure sectors,
today announces its unaudited interim results for the six months
ended 30 June 2018.
Results for the six-month period are in line with expectations
and the management remains confident of delivering its full year
expectations.
Financial Results - continuing operations
H1 H1 Change
2018 2017 restated
Revenue GBP210.2m GBP210.0m +0.1%
Underlying operating profit(1) GBP36.3m GBP37.9m -4.2%
Underlying operating margin(1) 17.3% 18.0% -70bps
Underlying profit before
tax(1) GBP32.9m GBP34.5m -4.6%
Operating profit GBP33.5m GBP33.9m -1.2%
Profit before tax GBP30.1m GBP30.5m -1.3%
Earnings per share (basic) 12.4p 12.3p +0.8%
Underlying earnings per
share (basic)(1) 13.5p 14.1p -4.3%
Cash generated from operations GBP22.3m GBP21.1m +5.7%
Leverage (times EBITDA(2)
) 1.7 2.0 0.3
Dividend per share 3.7p 3.6p +2.8%
On 29 March 2018, the Group completed the sale of Polypipe
France Holding SAS (Polypipe France), its French operations, to Ryb
S.A., a France-based manufacturer and distributor of plastics in
Europe, for EUR16.5 million on a cash-free, debt-free, normalised
working capital basis. Accordingly, the results for Polypipe France
have been treated as discontinued. Comparatives for 2017 have been
restated where necessary to reflect this treatment.
Financial Highlights
-- UK revenue 0.9% ahead. Growth excluding the GBP8m estimated
impact of adverse weather in February and March approximately
5%
-- Basic earnings per share from continuing operations up 0.8% at 12.4 pence
-- Cash generated from operations 5.7% higher at GBP22.3m
-- Net debt of GBP145.8m at 30 June 2018 is 1.7 times LTM
EBITDA(2) compared to 2.0 times in the prior year, and on track to
meet management expectations for the year
-- Interim dividend increased 2.8% to 3.7 pence per share
Operational Highlights
-- UK Residential Systems achieved good organic growth of 5.9%
-- Commercial and Infrastructure Systems revenue down 6.6%.
Impacted by previously disclosed project delays in road and other
commercial projects affecting short-term performance
-- Successfully completed disposal of low-margin French business
for EUR16.5m on cash-free, debt-free, normalised working capital
basis
-- Good progress on innovative manufacturing and sustainability
with increased use of recycled material
-- The new GBP5.0m large diameter continuous corrugator at our
Horncastle plant is performing well with revenue generation in line
with plan
-- Dubai factory exit and alternative manufacturing strategy
going to plan - first product manufactured by a sub-contracted
partner using Polypipe tooling delivered in July
Outlook
-- UK market outlook for the second half remains mixed
-- Fundamentals in Residential Systems segment continue to be
strong, driven by the new housebuild sector, UK RMI likely to
remain challenging
-- Signs of improvement in our Commercial and Infrastructure
Systems segment towards the end of the period and start of H2 with
road programmes beginning to increase in activity. Commercial
activity improving as the impact of Carillion-related delays
reduces and improved project awards in 2017 work through
-- Trading has started well in the second half, and the Board is
confident that the Group will deliver results in line with
management expectations for the year ending 31 December 2018
Martin Payne, Chief Executive Officer, said:
"Against a backdrop of mixed market conditions and adverse
weather the Group has performed well in the first half. With the
Group's balanced business model, underpinned by the long-term
growth drivers of legacy material substitution and continuing
legislative tailwinds in water management and climate change, I am
confident the Group will make good progress in the second half of
the year."
(1) Underlying profit and earnings measures are from continuing
operations and exclude certain non-underlying items and where
relevant, the tax effect of these items. The Directors consider
that these measures provide a better and more consistent indication
of the Group's underlying financial performance and more meaningful
comparison with prior and future periods to assess trends in our
financial performance.
(2) LTM EBITDA is defined as underlying operating profit before
depreciation and includes operating profit before depreciation from
discontinued operations.
For further information please contact:
Polypipe
Martin Payne, Chief Executive
Officer
Paul James, Chief Financial
Officer +44 (0) 1709 770 000
Brunswick
Nina Coad
Nick Beswick +44 (0) 20 7404 5959
A copy of this report will be available on our website
www.polypipe.com today from 0700hrs (BST).
An analyst and investor presentation will be held today at
Brunswick's offices, 16 Lincolns Inn Fields, London, WC2A 3ED at
0900 hrs (BST) with registration from 0830 hrs.
For those unable to attend, a live conference call will be
available at 0900 hrs (BST).
UK Freephone Dial-in Number 0800 376 7922
Standard International Dial-In number +44 (0) 2071 928000
Conference ID 8196395
Access to the slide presentation during this live event is
available at this link.
Notes to Editors:
Polypipe is the largest manufacturer in the UK, and among the
ten largest manufacturers in Europe, of plastic piping systems for
the residential, commercial, civils and infrastructure sectors by
revenue. It is also a leading designer and manufacturer of energy
efficient ventilation systems in the UK.
The Group operates from 17 facilities in total, and with over
20,000 product lines, manufactures the UK's widest range of plastic
piping systems for heating, plumbing, drainage and ventilation. The
Group primarily targets the UK and European building and
construction markets with a presence in Italy and the Middle East
and sales to specific niches in the rest of the world.
Group Results
The Group delivered a resilient trading performance for the
first half of the year in challenging market conditions.
On 31 January 2018, the Group announced that it had entered into
advanced negotiations to sell Polypipe France Holding SAS (Polypipe
France). The sale completed on 29 March 2018 and accordingly the
results for Polypipe France have been treated as discontinued in
this report. Comparatives for 2017 have been restated where
necessary to reflect this treatment. Polypipe France generated
revenue of GBP16.7m in the three-month period prior to sale (2017:
GBP32.0m for the six months ended 30 June) and operating profit of
GBP0.3m (2017: GBP1.0m for the six months ended 30 June).
Revenue from continuing operations for the six months ended 30
June 2018 was 0.1% higher than the prior year at GBP210.2m (2017:
GBP210.0m). UK revenue was some 0.9% ahead and growth excluding the
estimated GBP8m impact of adverse weather in the period was some 5%
ahead. The performance is a result of our continued focus on
strategic initiatives, exploiting our growth pillars of legacy
material substitution and legislative tailwinds in water and
climate management and providing a "one stop shop" for customers in
the UK.
Underlying operating profit was 4.2% lower than the prior year
at GBP36.3m (2017: GBP37.9m). This represents an operating margin
of 17.3% (2017: 18.0%), which held up well despite the dilutive
effect of price increases and mixed market conditions.
Finance costs of GBP3.4m (2017: GBP3.4m) were in line with the
prior year due to reduced levels of net debt offsetting an increase
in LIBOR.
Non-underlying operating costs of GBP2.8m were incurred and
relate to amortisation of intangible assets arising from the Nuaire
acquisition. The prior year charge of GBP4.0m included GBP1.2m of
gross restructuring costs relating to the temporary cessation of
manufacturing in our Middle East production facility.
The total tax charge for the period was GBP5.5m (2017: GBP6.1m).
The underlying tax charge of GBP6.0m (2017: GBP6.6m) represents an
effective underlying tax rate of 18.2% (2017: 19.1%). This compares
with the underlying tax rate for the full year 2017 of 18.0%. The
reduction from 19.1% to 18.2% is being driven by the reduction in
the blended UK standard rate of income tax from 19.25% to 19%
together with increasing patent box benefits.
Underlying profit after tax was 3.6% lower at GBP26.9m (2017:
GBP27.9m), with underlying basic earnings per share 4.3% lower at
13.5 pence (2017: 14.1 pence).
Including non-underlying items, profit after tax from continuing
operations was 0.8% higher at GBP24.6m (2017: GBP24.4m). Underlying
basic earnings per share was down 4.3% at 13.5 pence (2017: 14.1
pence).
Business Review
Revenue H1
2017
H1
2018 restated Change
---------------------------------------
GBPm GBPm %
--------------------------------------- ------ --- ---------- -------
Residential Systems 119.0 112.4 5.9
Commercial and Infrastructure Systems 91.2 97.6 (6.6)
Revenue 210.2 210.0 0.1
--------------------------------------- ------ --- ---------- -------
Underlying operating profit H1
2017
H1
2018 restated Change
---------------------------------------
GBPm GBPm %
--------------------------------------- ------ --- ---------- -------
Residential Systems 23.8 22.9 3.9
Commercial and Infrastructure Systems 12.5 15.0 (16.7)
Underlying operating profit 36.3 37.9 (4.2)
--------------------------------------- ------ --- ---------- -------
Underlying operating margin 17.3% 18.0%
--------------------------------------- ------ --- ---------- -------
Operational Review
Continued progress has been made in the first six months of the
year in our strategic initiatives, exploiting our growth pillars of
legacy material substitution and legislative tailwinds in water and
climate management, providing a "one stop shop" for customers in
the UK and leveraging our intellectual property and skills across a
wider geography.
The disposal of our French business for EUR16.5m on a cash and
debt free basis, was announced on 31 January 2018, was successfully
completed on 29 March 2018. Completion of this transaction is a
significant step forward in implementing our strategy, and
represents excellent value for shareholders, allowing the Group to
concentrate on our higher margin product groups in plumbing,
drainage and ventilation, in both our UK and overseas markets.
The closure of our Dubai manufacturing facility, announced at
the time of our 2017 results, is proceeding according to plan. The
relocation of the two Polystorm manufacturing cells back to our
Horncastle plant has been completed on time and to budget, and both
cells are now operating at full capacity. Encouragingly, our
alternative more flexible manufacturing approach is gathering pace,
with the first product manufactured by a sub-contracted partner
using Polypipe tooling to be despatched in July.
Group revenue for the period was 0.1% higher than prior year.
Revenue from our UK markets, which account for 89% of revenue, were
0.9% higher than prior year, driven by continued strong growth in
new housebuilding offset by tough commercial, infrastructure and
Repair, Maintenance and Improvement (RMI) markets, with export
revenue 5.8% lower than prior year, driven by continued difficult
conditions in the Middle East.
Whilst sterling has remained reasonably stable in the first half
of the year, higher oil prices and tight supply in some polymer
markets have driven polymer prices higher through the second half
of last year and into the current year. Operating margin was
slightly behind last year as a selling price increase of
approximately 2.7%, successfully implemented in February 2018, was
offset by input cost inflation, particularly in respect of
transport costs.
Residential Systems
Revenue in our Residential Systems segment, of which 97% is
derived from the UK market, was 5.9% higher than the prior period
at GBP119.0m (2017: GBP112.4m) and was impacted by previously
documented adverse weather conditions in February and March.
Revenue in the last two months of the period was 7.8% higher than
the corresponding two months of 2017.
Demand remains robust from the new housebuild sector, with most
housebuilders reporting volume growth over the recent period. RMI
markets continue to be difficult, with economic and political
uncertainty affecting consumer confidence resulting in private RMI
broadly flat, together with constraints on public spending and the
diversion of budgets towards fire safety and cladding refurbishment
leading to a contraction in public RMI in the period.
We continue to launch new innovative products to maintain our UK
market-leading position in this sector. In our Building Products
business, we extended our use of our multi-layer extrusion process
to our waste offer, launching our new multi-layer waste pipe and
enhanced fittings range, incorporating exclusive market-leading
BioCote(TM) antimicrobial technology. This makes Polypipe waste
systems the only range on the market to incorporate antimicrobial
technology, reducing odours and blockages through combating the
build-up of bio-film. This multi-layer approach is part of our
commitment to sustainability of supply through the increased use of
recycled material and helps reduce our impact on the
environment.
Residential Systems delivered an underlying operating profit of
GBP23.8m (2017: GBP22.9m), 3.9% higher than last year and
representing a 20.0% margin (2017: 20.4%). The progressive
implementation of selling price increases and cost reduction
measures to mitigate material cost and other inflation resulted in
margins being marginally lower than prior year.
Commercial and Infrastructure Systems
Revenue in our Commercial and Infrastructure Systems segment,
approximately 81% of which was generated in the UK market, was 6.6%
lower than prior year at GBP91.2m (2017: GBP97.6m). UK revenue was
6.4% down, reflecting a continuation of softer UK commercial and
infrastructure markets and adverse weather. Overseas revenue was
down 8.5%, reflecting continued softness in our Middle East
markets.
In the UK commercial sector, there is approximately a twelve to
eighteen month lag between project award and Polypipe supplying the
product. The post-EU referendum downturn in project awards seen in
the second half of 2016 into early 2017 has created tough market
conditions through the second half of 2017 into 2018 for the Group,
together with some of the project delays associated with Carillion.
There are some encouraging signs that the pick-up in project awards
in 2017 is beginning to feed through to demand in this sector. In
the UK infrastructure sector, the roads programme remained
difficult. A timing gap between large projects has constrained
performance, but towards the end of the period deliveries for the
A14 road project improved, and momentum is building in other road
projects.
The new GBP5.0m large diameter continuous corrugator at our
Horncastle plant is performing extremely well and revenue
generation is in line with plan, with excellent customer feedback
on the 750mm and 900mm products driving good project
specifications.
The Commercial and Infrastructure Systems segment delivered an
underlying operating profit of GBP12.5m (2017: GBP15.0m) in the
period, representing a 13.7% margin (2017: 15.4%), with the
operational drop through on lower volumes driving this
reduction.
Board and Management Changes
As previously announced, on 5 March 2018, Paul James joined the
Board as Chief Financial Officer. Paul has settled into the role
extremely well, contributing positively to the business from early
on. In a final step to ensure the appropriate balance of skills on
the Board, Louise Hardy was appointed as a Non-executive Director
of the Company on 25 June 2018. Louise brings over 25 years'
construction industry experience to the Board, most notably as
Infrastructure Director within CLM, the consortium delivery partner
for the Olympic Delivery Authority for the London 2012
Olympics.
Outlook
The UK market outlook for the second half remains mixed with
fundamentals in the Residential Systems segment remaining strong,
driven by the new housebuild sector, but UK RMI is likely to remain
challenging. After good performance by the Group in a tough first
half, there are signs of improvement in our Commercial and
Infrastructure Systems segment, with road programmes beginning to
increase in activity. The impact of Carillion-related delays has
reduced, and improved project awards in 2017 are working
through.
Trading has started well in the second half, and the Board is
confident that the Group will deliver full year results in line
with management expectations.
Financial Review
Finance Costs
Net underlying finance costs for the six months ended 30 June
2018 of GBP3.4m were in line with the prior year with lower net
debt offsetting higher interest rates. Interest is payable on the
Group's revolving credit facility at LIBOR plus an interest rate
margin ranging from 1.25% to 2.75% depending on leverage. The
interest rate margin at 30 June 2018 was 1.75% (2017: 1.75%).
In order to reduce exposure to future increases in interest
rates the Group has entered into interest rate swaps at fixed rates
ranging between 1.735% and 2.21% (excluding margin) with notional
amounts hedged ranging from GBP72.2m to GBP91.7m over the remaining
period of the interest rate swaps. Details of these swaps are set
out in Note 11 to this condensed set of consolidated financial
statements.
Taxation
The Group's tax charge for the six months ended 30 June 2018 was
GBP5.5m (2017: GBP6.1m). The underlying tax rate (underlying tax:
underlying profit) has been provided at the estimated full year
rate of 18.2% (2017 full year: 18.0%). The impact of our mainland
European operations on the Group's effective tax rate is not
material.
Dividend
The Board has declared an interim dividend of 3.7 pence per
share, a 2.8% increase on the 2017 interim dividend. This dividend
will be paid on 21 September 2018 to shareholders on the register
at the close of business on 31 August 2018.
Our dividend policy is to pay a minimum of 40% of the Group's
annual underlying profit after tax. The Directors intend that the
Group will pay the total annual dividend in two tranches, an
interim dividend and a final dividend, to be announced at the time
of announcement of the interim and preliminary results respectively
with the interim dividend being approximately one half of the prior
year's final dividend.
Cash Flow and Net Debt
Cash generated from operations during the period amounted to
GBP22.3m (2017: GBP21.1m). This result includes a working capital
outflow of GBP21.0m (2017: GBP26.1m). A significant first half
working capital outflow is a normal feature of the Group's annual
working capital cycle and arises primarily as a result of the
timing of rebate settlements. The working capital outflow for the
current period is less than the same period last year as stock
levels are broadly flat in the current period, compared to an
increase of GBP6.0m in the prior period reflecting stock level
normalisation following strong pre-price increase demand in
December 2016.
Capital expenditure of GBP10.9m (2017: GBP11.3m) was GBP3.0m
higher than depreciation and in line with management
expectations.
Net debt (including unamortised debt issue costs) at 30 June
2018 was GBP145.8m (30 June 2017: GBP178.0m) and is after the
payment of the final dividend of GBP14.9m (2017: GBP13.9m),
GBP13.8m receipt from the disposal of France, and the working
capital outflow and capital expenditure noted above. Leverage at
1.7 times LTM EBITDA compares to 2.0 times LTM EBITDA at 30 June
2017. The Group's working capital cycle means cash generation is
significantly stronger in the second half of the year such that
leverage will reduce in line with management expectations for the
year.
Going Concern
The Group continues to meet its day-to-day working capital and
other funding requirements through a combination of long-term
funding and cash deposits. The Group's bank financing facilities
consist of a GBP290.0m revolving credit facility of which GBP105.0m
was undrawn at 30 June 2018. Cash balances of a further GBP38.5m as
at 30 June 2018 give total facility headroom of GBP143.5m.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue its
operational existence for the foreseeable future and for a period
of at least twelve months from the date of this report.
Accordingly, the Board continues to adopt and consider appropriate
the going concern basis in preparing this condensed set of
consolidated financial statements.
Principal Risks and Uncertainties
The Board continually assesses and monitors the key risks of the
business and Polypipe has developed a risk management framework to
identify, report, and manage its principal risks and uncertainties.
The principal risks and uncertainties that could have a material
impact on the Group's performance and prospects, and the mitigating
activities which are aimed at reducing the impact or likelihood of
a major risk materialising, have not changed from those which are
set out in detail in the principal risks and uncertainties section
of our 2017 Annual Report and Accounts.
These principal risks and uncertainties cover raw material
prices; business disruption; reliance on key customers; recruitment
and retention of key personnel; economic conditions; Government
action and policies; Government regulations and standards relating
to the manufacture and use of building materials; product
liability; information systems; acquisitions; financial risk
management (foreign currency exchange risk, credit risk, liquidity
risk and interest rate cash flow risk) and the EU Referendum and UK
departure from the EU.
A copy of the 2017 Annual Report and Accounts is available on
the Company's website www.polypipe.com.
Forward-Looking Statements
This report contains various forward-looking statements that
reflect management's current views with respect to future events
and financial and operational performance. These forward-looking
statements involve known and unknown risks, uncertainties,
assumptions, estimates and other factors, which may be beyond the
Group's control and which may cause actual results or performance
to differ materially from those expressed or implied from such
forward-looking statements. All statements (including
forward-looking statements) contained herein are made and reflect
knowledge and information available as of the date of preparation
of this report and the Group disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements due to the
inherent uncertainty therein. Nothing in this report should be
construed as a profit forecast.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
-- The condensed set of consolidated financial statements has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the European Union; and
-- The Interim Management Report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of consolidated financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being 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
entity during that period; and any changes in the related party
transactions described in the last Annual Report and Accounts that
could do so.
This report was approved by the Board of Directors on 14 August
2018 and is available on the Company's website
www.polypipe.com.
The Directors of the Company are:
Ron Marsh Chairman
Martin Payne Chief Executive Officer
Glen Sabin Chief Operating Officer
Paul James Chief Financial Officer (appointed 5 March 2018)
Paul Dean Non-executive Director and Senior Independent Director
Mark Hammond Non-executive Director
Louise Hardy Non-executive Director (appointed 25 June 2018)
Moni Mannings Non-executive Director
By order of the Board:
M K Payne P A James
Chief Executive Officer Chief Financial Officer
INTERIM GROUP INCOME STATEMENT
for the six months ended 30 June 2018 (unaudited)
Notes Six months ended 30 Six months ended 30
June 2018 June 2017*
Underlying Non-underlying Total Underlying Non-underlying Total
Continuing operations GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 3 210.2 - 210.2 210.0 - 210.0
Cost of sales (121.4) - (121.4) (119.1) (1.2) (120.3)
----------- --------------- -------- ----------- --------------- --------
Gross profit 88.8 - 88.8 90.9 (1.2) 89.7
Selling and distribution
costs (34.3) - (34.3) (33.2) - (33.2)
Administration
expenses (18.2) - (18.2) (19.8) - (19.8)
-----------
Trading profit 36.3 - 36.3 37.9 (1.2) 36.7
Amortisation of
intangible assets - (2.8) (2.8) - (2.8) (2.8)
Operating profit 3 36.3 (2.8) 33.5 37.9 (4.0) 33.9
Finance costs 5 (3.4) - (3.4) (3.4) - (3.4)
----------- --------------- -------- ----------- --------------- --------
Profit before tax 32.9 (2.8) 30.1 34.5 (4.0) 30.5
Income tax 6 (6.0) 0.5 (5.5) (6.6) 0.5 (6.1)
----------- --------------- -------- ----------- --------------- --------
Profit from continuing
operations 26.9 (2.3) 24.6 27.9 (3.5) 24.4
Profit from discontinued
operations 9 - 0.3 0.3 - 0.7 0.7
----------- --------------- -------- ----------- --------------- --------
Profit for the
period attributable
to the owners of
the parent company 26.9 (2.0) 24.9 27.9 (2.8) 25.1
=========== =============== ======== =========== =============== ========
Basic earnings per share (pence)
From continuing
operations 7 12.4 12.3
From discontinued
operations 7 0.1 0.4
-------- --------
12.5 12.7
======== ========
Diluted earnings per share
(pence)
From continuing
operations 7 12.3 12.2
From discontinued
operations 7 0.1 0.3
-------- --------
12.4 12.5
======== ========
Dividend per share
(pence) - interim 8 3.7 3.6
======== ========
* The prior year comparatives have been restated where required
to reflect adjustments in respect of discontinued operations.
Non-underlying items are presented separately. Non-underlying
items are detailed in Note 4 to the condensed set of consolidated
financial statements.
INTERIM GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2018 (unaudited)
Six months Six months
ended 30 ended 30
June 2018 June 2017
GBPm GBPm
Profit for the period attributable
to the owners of the parent company 24.9 25.1
----------- -----------
Other comprehensive income:
Items which will be reclassified subsequently
to the income statement:
Exchange differences on translation
of foreign operations (0.1) 0.3
Recycling of foreign exchange differences
to the income statement (0.3) -
Effective portion of changes in fair
value of interest rate swaps 0.9 0.9
Tax relating to items which will be
reclassified subsequently to the income
statement (0.2) (0.1)
----------- -----------
Other comprehensive income for the
period net of tax 0.3 1.1
----------- -----------
Total comprehensive income for the
period attributable to the owners of
the parent company 25.2 26.2
=========== ===========
Attributable to the owners of the parent
company from:
Continuing operations 25.3 25.5
Discontinued operations (0.1) 0.7
------ -----
25.2 26.2
====== =====
INTERIM GROUP BALANCE SHEET
at 30 June 2018 (unaudited)
30 June 30 June 31 December
2018 2017 2017
GBPm GBPm GBPm
Non-current assets
Property, plant and
equipment 101.3 104.2 98.6
Intangible assets 353.7 368.8 356.5
--------- --------- ------------
Total non-current assets 455.0 473.0 455.1
--------- --------- ------------
Current assets
Assets classified as
held-for-sale 0.7 0.7 24.0
Inventories 52.7 58.3 53.5
Trade and other receivables 44.2 59.2 34.5
Cash and cash equivalents 38.5 29.0 35.7
--------- --------- ------------
Total current assets 136.1 147.2 147.7
--------- --------- ------------
Total assets 591.1 620.2 602.8
========= ========= ============
Current liabilities
Liabilities associated
with assets classified
as held-for-sale - - (10.9)
Trade and other payables (76.7) (93.1) (87.6)
Provisions (1.0) - (2.2)
Derivative financial
instruments (1.7) (3.3) (2.5)
Income tax payable (7.0) (7.2) (5.6)
--------- --------- ------------
Total current liabilities (86.4) (103.6) (108.8)
--------- --------- ------------
Non-current liabilities
Loans and borrowings (184.3) (207.0) (184.1)
Other liabilities (0.8) (2.1) (0.9)
Deferred income tax
liabilities (6.5) (6.9) (7.0)
--------- --------- ------------
Total non-current liabilities (191.6) (216.0) (192.0)
--------- --------- ------------
Total liabilities (278.0) (319.6) (300.8)
--------- --------- ------------
Net assets 313.1 300.6 302.0
========= ========= ============
Capital and reserves
Equity share capital 0.2 0.2 0.2
Capital redemption reserve 1.1 1.1 1.1
Own shares (3.8) (4.6) (4.3)
Hedging reserve (1.4) (2.7) (2.1)
Foreign currency retranslation
reserve 0.3 0.7 0.7
Retained earnings 316.7 305.9 306.4
--------- --------- ------------
Total equity 313.1 300.6 302.0
========= ========= ============
INTERIM GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2018 (unaudited)
Foreign
Equity Capital currency
share redemption Own shares Hedging retranslation Retained Total
capital reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Six months ended 30
June 2018
Opening balance 0.2 1.1 (4.3) (2.1) 0.7 306.4 302.0
---------- ------------- ------------- ---------- --------------- ----------- ---------
Profit for the
period - - - - - 24.9 24.9
Other comprehensive
income - - - 0.7 (0.4) - 0.3
---------- ------------- ------------- ---------- --------------- ----------- ---------
Total comprehensive
income for the
period - - - 0.7 (0.4) 24.9 25.2
Dividends paid - - - - - (14.9) (14.9)
Share-based payments
charge - - - - - 0.5 0.5
Share-based payments
settled - - 0.5 - - (0.2) 0.3
Closing balance 0.2 1.1 (3.8) (1.4) 0.3 316.7 313.1
========== ============= ============= ========== =============== =========== =========
Six months ended 30
June 2017
Opening balance 0.2 1.1 (4.6) (3.5) 0.4 293.8 287.4
---------- ------------- ------------- ---------- --------------- ----------- ---------
Profit for the
period - - - - - 25.1 25.1
Other comprehensive
income - - - 0.8 0.3 - 1.1
---------- ------------- ------------- ---------- --------------- ----------- ---------
Total comprehensive
income for the
period - - - 0.8 0.3 25.1 26.2
Dividends paid - - - - - (13.9) (13.9)
Share-based payments - - - - - 0.9 0.9
---------- ------------- ------------- ---------- --------------- ----------- ---------
Closing balance 0.2 1.1 (4.6) (2.7) 0.7 305.9 300.6
========== ============= ============= ========== =============== =========== =========
INTERIM GROUP CASH FLOW STATEMENT
for the six months ended 30 June 2018 (unaudited)
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017* 2017
GBPm GBPm GBPm
Operating activities
Profit before tax 30.1 30.5 55.6
Finance costs 3.4 3.4 6.9
----------- ------------ -------------
Operating profit 33.5 33.9 62.5
Profit before tax from discontinued
operations 0.3 1.0 1.4
Non-cash items:
Profit on disposal of property,
plant and equipment (0.2) (0.1) (0.1)
Non-underlying items:
- amortisation of intangible assets 2.8 2.8 5.5
- provision for restructuring costs - 1.2 4.3
- provision for aborted acquisition
costs - - 0.3
Depreciation 7.9 8.1 16.2
Share-based payments 0.5 0.6 0.8
Cash items:
- settlement of restructuring costs (1.3) (0.3) (0.4)
- settlement of aborted acquisition
costs (0.2) - (0.1)
Operating cash flows before movement
in working capital 43.3 47.2 90.4
Movement in working capital:
Receivables (14.9) (18.9) (3.2)
Payables (6.2) (1.2) 2.1
Inventories 0.1 (6.0) (8.9)
----------- ------------ -------------
Cash generated from operations 22.3 21.1 80.4
Income tax paid (4.8) (6.4) (12.6)
----------- ------------ -------------
Net cash flows from operating activities 17.5 14.7 67.8
----------- ------------ -------------
Investing activities
Proceeds from disposal of property,
plant and equipment 0.2 0.2 0.2
Purchase of property, plant and
equipment (10.9) (11.3) (23.4)
Disposal of subsidiary undertaking 13.8 - -
net of overdraft divested
----------- ------------ -------------
Net cash flows from investing activities 3.1 (11.1) (23.2)
----------- ------------ -------------
Financing activities
Drawdown of bank loan - 16.0 -
Repayment of bank loan - - (7.0)
Interest paid (3.2) (3.2) (6.6)
Dividends paid (14.9) (13.9) (21.0)
Purchase of own shares - - (3.2)
Proceeds from exercise of share
options 0.3 - 2.5
----------- ------------ -------------
Net cash flows from financing activities (17.8) (1.1) (35.3)
----------- ------------ -------------
Net change in cash and cash equivalents 2.8 2.5 9.3
Cash and cash equivalents - opening
balance 35.7 26.5 26.5
Net foreign exchange difference - - (0.1)
----------- ------------ -------------
Cash and cash equivalents - closing
balance 38.5 29.0 35.7
=========== ============ =============
The net decrease in cash and cash equivalents in the period from
discontinued operations included in the above was GBP4.2m (six
months ended June 2017: GBP0.6m increase).
* The prior year comparatives have been restated where required
to reflect adjustments in respect of discontinued operations.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 30 June 2018
1. Basis of preparation
Polypipe Group plc is incorporated in the UK. The condensed set
of consolidated financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority and IAS 34, Interim Financial
Reporting, as adopted by the European Union.
As required by the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority, the condensed set of consolidated
financial statements have been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the
year ended 31 December 2017, except for the adoption of new
standards effective as of 1 January 2018. These statements do not
include all the information required for full annual consolidated
financial statements and should be read in conjunction with the
full Annual Report and Accounts for the year ended 31 December
2017.
The comparatives for the financial year ended 31 December 2017,
where reported, are not the Group's statutory accounts for that
financial year. Those accounts have been reported on by the Group'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 accounting standards and interpretations that have become
effective in the current reporting period are as listed below.
International Financial Reporting Standards
(IFRSs) Effective date
------------------------------------------------ ---------------
IFRS 9 Financial Instruments 1 January 2018
-------------------------------------- ---------------
IFRS 15 Revenue from Contracts with Customers 1 January 2018
-------------------------------------- ---------------
IFRS 9 Financial Instruments
IFRS 9 addresses the classification, measurement and
derecognition of financial assets and liabilities, introduces new
rules for hedge accounting and a new impairment model for financial
assets.
With the exception of hedge accounting for forward foreign
currency derivatives, which has been applied prospectively, the
Group has applied IFRS 9 retrospectively, with the initial
application date of 1 January 2018. There has been no impact on the
comparatives for the period beginning 1 January 2017.
Cash and cash equivalents, and trade and other receivables: the
new rules do not affect the classification and measurement of these
financial assets which continue to be recognised at amortised
cost.
Financial liabilities: there are no changes to the
classification or measurement of financial liabilities under IFRS
9.
Interest rate swaps: these continue to qualify as hedges under
IFRS 9.
Forward foreign currency derivatives: historically, forward
foreign currency derivatives have not met the criteria for hedge
accounting contained in IAS 39 and as a result changes in fair
value were recognised immediately in the income statement. The
Group has implemented processes such that the criteria for hedge
accounting under IFRS 9 are now met and as a result forward foreign
currency derivatives entered into during the current period are
accounted for as cash flow hedges and the effective part of any
profit or loss on the derivative is recognised directly in other
comprehensive income.
The new impairment model requires the recognition of impairment
provisions based on forward-looking expected credit losses (ECL)
rather than backward-looking incurred losses previously applied
under IAS 39. This applies to financial assets classified at
amortised cost, namely cash and cash equivalents and trade and
other receivables. The only financial asset that is currently
impaired under IFRS 9 is trade receivables. A large proportion of
trade receivables are covered by credit insurance. The adoption of
the ECL requirements of IFRS 9 has resulted in an immaterial change
in impairment provisions.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 replaces IAS 18 which covers contracts for goods and
services and IAS 11 which covers construction costs. The new
standard is based on the principle that revenue is recognised when
control of a good or service transfers to a customer.
Due to the generally short-term nature of the Group's contracts
there is no impact on the timing of recognition of revenue under
IFRS 15.
The Group has adopted the standard using the modified
retrospective approach applied to all contracts at 1 January 2018.
As IFRS 15 has not had any impact on reported results, the
comparatives have not been restated.
We have considered variable consideration, specifically in
relation to rebates. The Group accounts for rebates as discussed in
Notes 2.7 and 3.2 to the consolidated financial statements for the
year ended 31 December 2017. There has been no impact on reported
variable consideration from applying the new standard.
The following listing of standards and interpretations issued
are those that the Group reasonably expect to have an impact on
disclosures, financial position or performance; but which have an
effective date after the date of this condensed set of consolidated
financial statements. The Group has not early adopted them and
plans to adopt them from the effective dates adopted by the
European Union.
International Financial Reporting Standards
(IFRSs) Effective date
---------------------------------------------- ---------------
IFRS 16 Leases 1 January 2019
-------------------- ---------------
IFRS 16 Leases
Under IFRS 16 the present distinction between operating and
finance leases will be removed, resulting in all leases being
recognised on the balance sheet (except short-term leases and
leases of low-value assets) and termed right-of-use assets. At
inception, a right-of-use asset will be recognised together with an
equivalent liability reflecting the discounted lease payments over
the estimated term of the lease. While the overall cost of using
the asset over the lease term should be the same, it is likely that
the weighting of the charge between periods may differ due to the
requirement to distinguish between the lease and non-lease elements
of the agreement. Adoption of this standard is likely to result in
an increase in gross assets and gross liabilities in the balance
sheet, and operating lease costs being reclassified in the income
statement to depreciation and / or interest expense. Currently, the
Group does not have any finance leases but does have operating
leases. The minimum lease rentals payable under non-cancellable
operating leases are disclosed in Note 26 of the consolidated
financial statements for the year ended 31 December 2017.
The Group has a project team working to determine the effect of
IFRS 16 on its consolidated financial statements, and implement the
processes and systems necessary to comply with its requirements. We
have, however, completed a high-level assessment. The actual amount
of gross assets and gross liabilities which we will recognise when
we adopt IFRS 16 will depend on several factors including the
transition option we decide to use; the incremental borrowing rates
we use to discount our future lease commitments; and any
significant leases which the Group enters into before the adoption
date. Accordingly, beyond the information above, it is not
practicable to provide a reasonable financial estimate of the
effect of IFRS 16 until this detailed review has been
completed.
The condensed set of consolidated financial statements are
prepared on a going concern basis. This is considered appropriate
given that the Company and its subsidiaries have adequate resources
to continue in operational existence for the foreseeable
future.
There have been no related party transactions in the period to
30 June 2018 apart from compensation of key management
personnel.
Two non-statutory measures have been used in preparing the
condensed set of consolidated financial statements:
-- Underlying profit and earnings measures exclude certain
non-underlying items which are provided in Note 4, and where
relevant, the tax effect of these items. The Directors consider
that these measures provide a better and more consistent indication
of the Group's underlying financial performance and more meaningful
comparison with prior and future periods to assess trends in our
financial performance.
-- LTM EBITDA is defined as underlying operating profit before
depreciation for the twelve months preceding the balance sheet
date.
2. Financial risks, estimates, assumptions and judgements
The preparation of the condensed set of consolidated financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and
expenses. Actual results may differ from estimates.
In preparing this condensed set of consolidated 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 31
December 2017.
3. Segment information
The Group has two reporting segments - Residential Systems and
Commercial and Infrastructure Systems. The reporting segments are
organised based on the nature of the end markets served. There are
no significant judgements in aggregating operating segments to
arrive at the reporting segments. Inter segment sales are on an
arm's length basis in a manner similar to transactions with third
parties.
As explained in Note 9, the operations of Polypipe France have
been classified as discontinued and consequently the comparative
financial information has been restated where appropriate to meet
the presentational requirements of IFRS 5, Non-current Assets
Held-for-Sale and Discontinued Operations, to take account of this
change.
Six months ended 30 Six months ended 30
June 2018 June 2017
------------------------------------- -------------------------------------
Commercial Commercial
Residential & Infrastructure Residential & Infrastructure
Systems Systems Total Systems Systems Total
GBPm GBPm GBPm GBPm GBPm GBPm
Continuing operations
Segmental revenue 121.3 95.0 216.3 115.0 102.0 217.0
Inter segment revenue (2.3) (3.8) (6.1) (2.6) (4.4) (7.0)
----------- ----------------- ----- ----------- ----------------- -----
Revenue 119.0 91.2 210.2 112.4 97.6 210.0
=========== ================= ===== =========== ================= =====
Underlying operating
profit* 23.8 12.5 36.3 22.9 15.0 37.9
Non-underlying items
- segmental - - - (0.3) (0.9) (1.2)
----------- ----------------- ----- ----------- ----------------- -----
Segmental operating
profit 23.8 12.5 36.3 22.6 14.1 36.7
=========== ================= =========== =================
Non-underlying items
- Group (2.8) (2.8)
----- -----
Operating profit 33.5 33.9
Finance costs (3.4) (3.4)
----- -----
Profit before tax 30.1 30.5
===== =====
* Underlying operating profit is stated before non-underlying
items.
Geographical analysis
Revenue by destination:
Six months Six months
ended 30 ended 30
June 2018 June 2017
Continuing operations GBPm GBPm
UK 187.3 185.7
Rest of Europe 8.4 9.0
Rest of World 14.5 15.3
----------- -----------
Total - Group 210.2 210.0
=========== ===========
4. Non-underlying items
Non-underlying items comprised:
Six months ended Six months ended
30 June 2018 30 June 2017
--------------------- ----------------------
Gross Tax Net Gross Tax Net
GBPm GBPm GBPm GBPm GBPm GBPm
Cost of sales: Restructuring
costs - - - (1.2) - (1.2)
Amortisation of intangible
assets (2.8) 0.5 (2.3) (2.8) 0.5 (2.3)
Discontinued operations:
profit from discontinued
operations 0.3 - 0.3 1.0 (0.3) 0.7
Total non-underlying items (2.5) 0.5 (2.0) (3.0) 0.2 (2.8)
====== ===== ====== ====== ====== ======
Gross restructuring costs of GBP1.2m were recognised in 2017 in
respect of a change in our Commercial and Infrastructure Systems'
manufacturing strategy in the Middle East (GBP0.9m) and the
relocation of our Residential Systems' Domus Ventilation
manufacturing facilities (GBP0.3m). The Middle East restructuring
plan was drawn up and announced to the relevant employees in 2017.
The Domus Ventilation restructuring plan was drawn up, announced
and completed in 2017.
5. Finance costs
Six months Six months
ended 30 ended 30
June 2018 June 2017
GBPm GBPm
Interest on bank loan 2.8 2.8
Debt issue cost amortisation 0.2 0.2
Other finance costs 0.4 0.4
Finance costs 3.4 3.4
=========== ===========
6. Income tax
Tax has been provided on the profit before tax excluding
discontinued operations, at the estimated effective rate for the
full year of 18.2% (full year 2017: 19.1%). Tax on underlying
profit before tax was 18.2% (full year 2017: 18.0%).
7. Earnings per share
Basic earnings per share amounts are calculated by dividing
profit for the period attributable to the owners of the parent
company by the weighted average number of ordinary shares
outstanding during the period. The diluted earnings per share
amounts are calculated by dividing profit for the period
attributable to the owners of the parent company by the weighted
average number of ordinary shares outstanding during the period
plus the weighted average number of potential ordinary shares that
would be issued on the conversion of all the dilutive share options
into ordinary shares.
The calculation of basic and diluted earnings per share is based
on the following:
Six months Six months
ended 30 ended 30
June 2018 June 2017
Weighted average number of ordinary
shares for the purpose of basic earnings
per share 198,952,752 198,287,022
Effect of dilutive potential ordinary
shares 2,060,872 2,196,051
------------ --------------
Weighted average number of ordinary
shares for the purpose of diluted
earnings per share 201,013,624 200,483,073
============ ==============
Underlying earnings per share is based on the result for the
period after tax excluding the impact of non-underlying items of
GBP2.0m (2017: GBP2.8m). The Directors consider that this measure
provides a better and more consistent indication of the Group's
underlying financial performance and more meaningful comparison
with prior and future periods to assess trends in our financial
performance. The underlying earnings per share is calculated as
follows:
Six months Six months
ended ended
30 June 30 June
2018 2017
Underlying profit for the period attributable
to the owners of the parent company (GBPm) 26.9 27.9
=========== ===========
Underlying basic earnings per share (pence) 13.5 14.1
=========== ===========
Underlying diluted earnings per share
(pence) 13.4 13.9
=========== ===========
8. Dividends
The Directors have proposed an interim dividend for the current
year of GBP7.4m which equates to 3.7 pence per share.
9. Discontinued operations and assets classified as held-for-sale
On 31 January 2018, the Group announced that it had entered into
exclusive negotiations to sell Polypipe France Holding SAS, its
French operations, to Ryb S.A., a France-based manufacturer and
distributor of plastics in Europe. After successful completion of
the required employee consultation process the sale was completed
on 29 March 2018. The cash consideration paid by Ryb S.A. was
EUR16.5m on a cash-free, debt-free and normalised working capital
basis. At 31 December 2017 the net assets of the French operations
were classified as held-for-sale in the consolidated balance sheet.
In accordance with IFRS 5, Non-current Assets Held-for-Sale and
Discontinued Operations, an impairment loss of GBP12.5m to
remeasure the carrying amount of the assets to fair value less
costs to sell was recognised following the reclassification of the
net assets of Polypipe France Holding SAS as held-for-sale. An
analysis of the assets classified as held-for-sale and liabilities
associated with the assets held-for-sale at 31 December 2017 was as
follows:
Impairment 31 December
Book value loss 2017
GBPm GBPm GBPm
Assets classified as held-for-sale
Intangible assets 9.6 (9.6) -
Property, plant and equipment 9.2 (2.9) 6.3
Inventories 7.7 - 7.7
Trade and other receivables 9.0 - 9.0
Deferred income tax assets 0.3 - 0.3
---------- ------------ -----------
35.8 (12.5) 23.3
---------- ------------ -----------
Liabilities associated with
assets classified as held-for-sale
Trade and other payables (9.5) - (9.5)
Income tax payable (0.2) - (0.2)
Other liabilities (1.2) - (1.2)
(10.9) - (10.9)
---------- ------------ -----------
Net assets held-for-sale 24.9 (12.5) 12.4
========== ============ ===========
A total loss on disposal of GBP12.5m was anticipated and
previously recognised. The actual loss on disposal at 29 March 2018
was GBP12.5m, after recycling of foreign exchange differences to
the income statement, with no change to the loss on disposal
previously recognised. The actual loss on disposal was calculated
as follows:
GBPm
Intangible assets 9.6
Property, plant and equipment 9.0
Inventories 8.4
Trade and other receivables 14.2
Deferred income tax assets 0.2
Trade and other payables (14.0)
Other liabilities (1.2)
------
Net assets sold 26.2
------
Disposal proceeds:
Cash 14.0
Directly attributable costs (0.6)
------
Net proceeds 13.4
------
Loss on disposal before tax and recycling of foreign
exchange differences 12.8
Recycling of foreign exchange differences to the
income statement (0.3)
------
Loss on disposal 12.5
======
The net cash inflow from the disposal reported in investing
activities was as follows:
GBPm
Disposal proceeds 13.2
Directly attributable costs (0.2)
Overdraft divested 0.8
-------
Net cash inflow 13.8
=======
The table below provides further detail of the discontinued
operations:
Six months Six months
ended 30 ended 30
June 2018 June 2017
GBPm GBPm
Revenue 16.7 32.0
Expenses (16.4) (31.0)
---------- ----------
Profit before tax 0.3 1.0
Income tax - (0.3)
---------- ----------
Profit from discontinued operations 0.3 0.7
========== ==========
The remaining assets classified as held-for-sale comprised:
30 June 2018 30 June 2017
GBPm GBPm
Property, plant and equipment 0.7 0.7
============ ============
These assets classified as held-for-sale consist exclusively of
freehold land currently not in use by the Group. It is expected
that the disposal of this asset will be completed during 2018.
10. Analysis of net debt
30 June 30 June 31 December
2018 2017 2017
GBPm GBPm GBPm
Cash and cash equivalents 38.5 29.0 35.7
-------- -------- ------------
Non-current loans and borrowings:
- Bank loan (185.0) (208.0) (185.0)
- Unamortised debt issue
costs 0.7 1.0 0.9
-------- -------- ------------
(184.3) (207.0) (184.1)
-------- -------- ------------
Net debt (145.8) (178.0) (148.4)
======== ======== ============
11. Other financial assets and liabilities
Fair values of financial assets and financial liabilities
The book value of trade and other receivables, trade and other
payables, cash balances, bank loan and other liabilities equates to
fair value.
Carrying Fair value
value GBPm
GBPm
Forward foreign currency derivatives (0.1) (0.1)
Interest rate swaps (1.6) (1.6)
Interest bearing loans and borrowings
due after more than one year (184.3) (184.3)
--------- -----------
Total at 30 June 2018 (186.0) (186.0)
========= ===========
Carrying Fair value
value GBPm
GBPm
Interest rate swaps (3.3) (3.3)
Interest bearing loans and borrowings
due after more than one year (207.0) (207.0)
--------- -----------
Total at 30 June 2017 (210.3) (210.3)
========= ===========
Carrying Fair value
value GBPm
GBPm
Interest rate swaps (2.5) (2.5)
Interest bearing loans and borrowings
due after more than one year (184.1) (184.1)
--------- -----------
Total at 31 December 2017 (186.6) (186.6)
========= ===========
The interest rate on the Group's GBP290.0m revolving credit
facility is variable, being payable at LIBOR plus a margin. To
reduce the Group's exposure to future increases in interest rates
the Group has entered into interest rate swaps for the following
notional amounts, with interest payable at a fixed rate return
dependant on the swap of either 2.21% or 1.735% (2017: 2.21% or
1.735%) (excluding margin):
Year ending 31 December Notional amount Notional amount
- rate of 2.21% - rate of 1.735%
GBPm GBPm
2018 66.6 25.1
2019 - 82.0
To August 2020 - 72.2
The fair value of the interest rate swaps was determined by
reference to market values.
Forward foreign currency derivatives fair value was determined
using quoted exchange rates.
Fair value hierarchy
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
Level 2: other techniques for which all inputs which have a
significant effect on the recognised fair value are observable,
either directly or indirectly; and
Level 3: techniques which use inputs which have a significant
effect on the recognised fair value that are not based on
observable market data.
The fair values disclosed above all relate to items categorised
as Level 2.
There have been no transfers in any direction between Levels 1,
2 or 3 in the period.
12. Consolidated cash flow statement
The analysis of cash generated from operations split by
continuing and discontinued operations is:
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBPm GBPm GBPm
Continuing operations
Profit before tax 30.1 30.5 55.6
Finance costs 3.4 3.4 6.9
----------- ----------- -------------
Operating profit 33.5 33.9 62.5
Non-cash items:
Profit on disposal of property,
plant and equipment (0.2) (0.1) (0.1)
Non-underlying items:
- amortisation of intangible assets 2.8 2.8 5.5
- provision for restructuring
costs - 1.2 4.3
- provision for aborted acquisition
costs - - 0.3
Depreciation 7.6 7.5 14.9
Share-based payments 0.5 0.6 0.8
Cash items:
- settlement of restructuring
costs (1.3) (0.3) (0.4)
- settlement of aborted acquisition
costs (0.2) - (0.1)
----------- ----------- -------------
Operating cash flows before movement
in working capital 42.7 45.6 87.7
Movement in working capital:
Receivables (9.7) (12.6) (2.5)
Payables (10.5) (7.7) 0.7
Inventories 0.8 (5.4) (8.0)
Inter-group balances 0.5 - -
----------- ----------- -------------
Cash generated from operations 23.8 19.9 77.9
Income tax paid (4.6) (6.4) (12.6)
----------- ----------- -------------
Net cash flows from operating
activities 19.2 13.5 65.3
----------- ----------- -------------
Investing activities
Proceeds from disposal of property,
plant and equipment 0.2 0.2 0.2
Purchase of property, plant and
equipment (10.8) (10.7) (22.2)
Disposal of subsidiary undertaking 13.8 - -
net of overdraft divested
----------- ----------- -------------
Net cash flows from investing
activities 3.2 (10.5) (22.0)
----------- ----------- -------------
Financing activities
Drawdown of bank loan - 16.0 -
Repayment of bank loan - - (7.0)
Interest paid (3.2) (3.2) (6.6)
Dividends paid (14.9) (13.9) (21.0)
Dividends received from discontinued 2.4 - -
operations
Purchase of own shares - - (3.2)
Proceeds from exercise of share
options 0.3 - 2.5
----------- ----------- -------------
Net cash flows from financing
activities (15.4) (1.1) (35.3)
----------- ----------- -------------
Net change in cash and cash equivalents 7.0 1.9 8.0
Cash and cash equivalents - opening
balance 32.3 24.5 24.5
Net foreign exchange difference - (0.1) (0.2)
----------- ----------- -------------
Cash and cash equivalents - closing
balance 39.3 26.3 32.3
=========== =========== =============
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBPm GBPm GBPm
Discontinued operations
Profit before tax from discontinued
operations 0.3 1.0 1.4
Loss recognised on remeasurement
to fair value less costs
to sell - - (12.5)
----------- ----------- -------------
Operating profit / (loss) 0.3 1.0 (11.1)
Non-cash items:
Non-underlying item: loss
recognised on remeasurement
to fair value less costs
to sell - - 12.5
Depreciation 0.3 0.6 1.3
Operating cash flows before
movement in working capital 0.6 1.6 2.7
Movement in working capital:
Receivables (5.2) (6.3) (0.7)
Payables 4.3 6.5 1.4
Inventories (0.7) (0.6) (0.9)
Inter-group balances (0.5) - -
----------- ----------- -------------
Cash generated from operations (1.5) 1.2 2.5
Income tax paid (0.2) - -
Net cash flows from operating
activities (1.7) 1.2 2.5
Investing activities
Purchase of property, plant
and equipment (0.1) (0.6) (1.2)
Net cash flows from investing
activities (0.1) (0.6) (1.2)
----------- ----------- -------------
Financing activities
Dividends paid (2.4) - -
----------- ----------- -------------
Net cash flows from financing -
activities (2.4) -
----------- ----------- -------------
Net change in cash and cash
equivalents (4.2) 0.6 1.3
Cash and cash equivalents
- opening balance 3.4 2.0 2.0
Net foreign exchange difference - 0.1 0.1
----------- ----------- -------------
Cash and cash equivalents
- closing balance (0.8) 2.7 3.4
=========== =========== =============
INDEPENDENT REVIEW REPORT TO
POLYPIPE GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set
of consolidated financial statements in the interim financial
report for the six months ended 30 June 2018 which comprises the
Interim Group Income Statement, the Interim Group Statement of
Comprehensive Income, the Interim Group Balance Sheet, the Interim
Group Statement of Changes in Equity, the Interim Group Cash Flow
Statement and the related Notes 1 to 12. We have read the other
information contained in the interim financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of consolidated financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland), Review of Interim Financial Information
Performed by the Independent Auditor of the Entity, issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The interim financial report is the responsibility of, and has
been approved by, the Directors. The Directors are responsible for
preparing the interim financial report in accordance with the
Disclosure Guidance and Transparency Rules of the UK's Financial
Conduct Authority.
As disclosed in Note 1, the annual consolidated financial
statements of the Group are prepared in accordance with IFRSs as
adopted by the European Union. The condensed set of consolidated
financial statements included in this interim financial report has
been prepared in accordance with IAS 34, Interim Financial
Reporting, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of consolidated financial statements in the
interim financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity, issued by the Auditing Practices Board for use in
the UK. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of consolidated
financial statements in the interim financial report for the six
months ended 30 June 2018 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the European
Union and the Disclosure Guidance and Transparency Rules of the
UK's Financial Conduct Authority.
Ernst & Young LLP
Leeds
14 August 2018
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FKNDQFBKDCFD
(END) Dow Jones Newswires
August 14, 2018 02:00 ET (06:00 GMT)
Genuit (LSE:GEN)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Genuit (LSE:GEN)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024