TIDMDBAY
RNS Number : 5617Q
Douglasbay Capital PLC
05 August 2010
5 August 2010
DouglasBay Capital plc
("DouglasBay", "the Group" or "the Company")
Interim results for the six months to 30 June 2010
DouglasBay Capital (AIM: DBAY), an active value investment company, today
announces its interim results for the six months to 30 June 2010.
Summary
* Major step forward in performance at TDG, as benefits of last year's
revitalisation plan feed through:
- TDG underlying operating profit (before DouglasBay management charges) of
GBP12.1m, up 39% on same period last year. Compares favourably with sector
peers.
- Strong operating cash flow of GBP14.4m (H1 2009: GBP1.1m).
- TDG reported an underlying EBITDA (before DouglasBay management charges) of
GBP18.9m for the first half of 2010. On a like-for-like basis, adjusting for
sale & leaseback and DouglasBay management charges, this compares well with
underlying EBITDA of GBP13.5m in H1 2008 and GBP13.9m in H1 2009.
- Revenues up 4% at GBP340.0m (H1 2009: GBP327.8m) and ahead half-on-half,
with more favourable trading conditions now evident.
- Business wins ahead of this stage last year and strengthening new business
pipeline.
- Leaner more efficient company now firmly focused on accelerating growth.
* A strong first half for DouglasBay - underlying operating profit up 43% at
GBP11.0m.
* Further substantial debt reduction achieved - net borrowings down 60% to
GBP34.9m at period end (2009: GBP86.7m). This reduction should be viewed in the
context of net debt of GBP129.6m as at 31 December 2008.
* DouglasBay underlying earnings per share substantially up, at 0.58p, (H1 2009:
0.06p).
* DouglasBay Property Company focusing on maximising value from the Group's real
estate portfolio; now managing six properties across a total of 172 acres.
* Good progress in liquidating minority holdings in TLIT.
* DouglasBay team, with skills to handle the entire investment cycle in-house,
pursuing new opportunities where we can see a clear path to value creation.
David Panter, Chairman, commented: "DouglasBay has delivered strong results for
the first half of 2010. With the benefit of cost reductions implemented last
year, TDG is now lean and fit to execute its growth strategy. Our focus on
generating cash is ongoing, as is our pursuit of new investment opportunities.
In continuing challenging market conditions, we are confident that our active
value investment model positions us well for the future."
Alex Paiusco, Chief Executive Officer, commented: "We are greatly encouraged
that the early and decisive actions taken last year at TDG, our first major
investment, are delivering the anticipated improvements in financial
performance. Since the take over of TDG in October 2008 we have been successful
in deleveraging the Group, whilst at the same time improving TDG's business
model and cash generation. Our priorities are unchanged - to continue to grow
TDG and create value for shareholders by identifying and securing attractive
investment opportunities that meet our active value criteria."
For further information please visit www.douglasbaycap.com or contact:
+-------------------------------+-------------------------------+
| DouglasBay Capital plc | Tavistock Communications |
+-------------------------------+-------------------------------+
| Alex Paiusco, Chief Executive | Simon Hudson/Simon Compton |
+-------------------------------+-------------------------------+
| Tel: 01624 690900 | Tel: 020 7920 3150 |
+-------------------------------+-------------------------------+
| | |
+-------------------------------+-------------------------------+
| KBC Peel Hunt Ltd | |
+-------------------------------+-------------------------------+
| (Nominated Adviser & Broker) | |
+-------------------------------+-------------------------------+
| Guy Wiehahn | |
+-------------------------------+-------------------------------+
| Tel: 020 7418 8900 | |
+-------------------------------+-------------------------------+
Chairman's Statement
Introduction
DouglasBay has delivered a strong performance in the first half of 2010 and I am
confident that subject to there being no unforeseen circumstances the second
half should be equally satisfactory.
TDG, our first major investment, is a success story. We took over the company
in October 2008, a fortnight after the demise of Lehman Brothers; the timing
could not have looked worse. Yet in a little under two years the company and
its financial position have been transformed and I have no hesitation in paying
tribute to the achievements of both the executives of DouglasBay and the team
that took over at TDG. Their results form the backbone of this report.
The revitalisation of TDG has not been sustained without a strict financial
discipline and a group-wide reorganisation that had to be prepared in detail,
executed on the ground, and achieved. This was in order to offer a clear future
to the company and its workforce going forward, as well as being a springboard
for best in class service to TDG's customers, our first priority, and of course
producing results for our shareholders who had backed us in the first place.
Chief Executive, Alex Paiusco, provides a more detailed report on progress in
the Investment Review that follows. We continue to operate in three divisions -
TDG, DouglasBay Property Group and TLIT, the latter comprising minority
investments which we are liquidating.
Results
DouglasBay underlying EBITDA was GBP18.1m (H1 2009: GBP16.1m), with underlying
operating profit increasing by 43% to GBP11.0m (H1 2009: GBP7.7m). Basic
earnings per share were 0.44p, compared to a loss of (0.23)p last time.
Underlying earnings per share, excluding exceptional items and related tax
charges, were significantly ahead at 0.58p (H1 2009: 0.06p). Net assets per
share reduced marginally to 9.45p (2009: 9.98p), due principally to assumption
changes relating to TDG's defined benefit pension scheme which remains in
healthy surplus.
During the last six months the Group's financial position has again been
substantially strengthened through a combination of TDG's strong operational
cash generation and proceeds of GBP40.8m from property disposals and GBP2.2m
from the sale of holdings in TLIT. As at 30 June 2010, net debt was GBP34.9m
(2009: GBP86.7m).
Prospects
TDG's management are now firmly focused on accelerating business growth, in line
with the next phase of its value creation plan. Market conditions will remain
challenging, but the company's transformed financial position and strengthening
bid pipeline, together with improving trading volumes, provide positive momentum
for the traditionally stronger second half trading period.
In the short time since it was set up, we are very pleased with DouglasBay
Property Group's progress in managing and maximising value from TDG's real
estate portfolio. Here again, several further initiatives are planned before
the 2010 year end.
The DouglasBay management team continues to research and pursue new investments
that will enable us to further exploit our investment approach, and the Board
and I are confident that the current climate will create some excellent
opportunities for your company.
On a final note, I would like to welcome Colin Kingsnorth to the Board following
his appointment as a Non-executive Director in May and also thank the Group's
management and employees for their continuing commitment and hard work in
building DouglasBay.
David Panter
Non-executive Chairman,
4 August 2010
CEO's Investment Review
Overview
I am pleased to report another period of significant progress for DouglasBay.
We are greatly encouraged that the early and decisive actions taken last year at
TDG are delivering the anticipated improvements in financial performance. In
addition, DouglasBay Property Group ("DBPG") continues to make very good
progress in the more active management of TDG's real estate portfolio. With
regards to new investments, the current climate continues to generate
opportunities across a range of sectors and we are examining a number of
attractive prospects.
Progress with TDG
TDG delivered a meaningful step forward in performance in the first half of
2010. During the period the company increasingly reaped the benefit from last
year's far reaching value creation programme, as well as gaining from more
favourable trading conditions in a number of customer sectors and the start-up
of new business secured in the previous period.
Underlying operating profit, before DouglasBay management charges, for the six
months to 30 June 2010 was an impressive 39% ahead at GBP12.1m (H1 2009:
GBP8.7m), on revenue of GBP340.0m (H1 2009: GBP327.8m), reflecting improved
margins up from 2.7% to 3.6%. On a comparable basis, adjusting for sale &
leaseback charges, this result represents a doubling of like-for-like underlying
operating profit within just a twelve month period.
During the period TDG management, led by Mike Branigan, secured further cost
reduction and efficiency savings, whilst retaining a rigorous focus on customer
service and operations excellence. The leaner, more streamlined operating model
put in place last year has delivered a step change reduction in non-essential
overheads, whilst simultaneously creating a nimbler and more effective business
with a new sense of purpose and clear strategic priorities.
Attention is now directed on accelerating business growth in specialised
contract logistics activities such as 4PL transport management and in freight
forwarding, where there is demand from clients for innovative supply chain
solutions that deliver substantial cost and service efficiencies. In this
context it is pleasing to report another encouraging period for business
development, with new business wins above levels achieved at this stage last
year and a healthy and developing bid pipeline to underpin the second half and
beyond.
As planned, in the first half TDG's capital structure was again strengthened
through selective property disposals, raising GBP40.8m to repay Group debt.
This more active management of the real estate portfolio remains a key element
of our investment case, whilst also moving TDG further towards a more
asset-light business model, in line with standard industry practice. Alongside
improvements to operational cash generation, these cash inflows enabled further
sizeable reductions to TDG's borrowing levels, to the extent that by 30 June
2010 over 80% of bank debt taken on at the time of the acquisition had been
repaid. An additional disposal has been completed in July, for expected net
proceeds of GBP1.4m.
In summary, we continue to be very pleased with our investment in TDG, whose
management and staff take great credit for the company's strong performance
through the recession. Following the successful delivery of its restructuring
programme, TDG is in very good shape to expand and grow its activities.
DouglasBay Property Group
Established in 2009, DBPG is making rapid progress in maximising value from
TDG's real estate portfolio, working with TDG to reduce occupancy costs and
playing a central role in facilitating and transacting selective disposals.
During the period a further four properties previously held by TDG were
transferred to DBPG, which now owns and manages 172 acres of logistics real
estate.
Minority investments and new investments
In the first half we made good progress with plans to liquidate our listed
minority investments in TLIT, disposing of a further three stakes. Our efforts
to realise this legacy portfolio are ongoing.
Turning to new investments, since our formation we have reviewed a number of
opportunities but have judged that few offered good value, in particular
considering the world-wide economic uncertainty and the lack of bank financing
to grow new investments. Now that progress at TDG and DBPG is well established,
we are stepping up our efforts and are actively reviewing a number of prospects.
With skills to handle the entire investment cycle in-house, a strong balance
sheet and the ability to act rapidly, we are ready to capitalise when situations
meet our active value investment criteria.
Outlook
Though we remain cautious as to the sustainability of the improving economic
outlook, a more efficient and competitive TDG is well placed to make strong
progress in the second half.
Our priorities at DouglasBay are unchanged - to continue to grow TDG and create
value for DouglasBay shareholders by identifying and securing attractive
investment opportunities that meet our active value criteria.
Alex Paiusco
Chief Executive Officer
4 August 2010
Financial Review
Introduction
Last years results covering the period from 1 January to 30 June 2009 were our
first interim report following the acquisitions of TDG and TLIT and our listing
on the LSE AIM market, together completed in early October 2008. These latest
interim results therefore represent the first time that investors can compare
DouglasBay's performance with a prior reporting period.
The TDG Group accounts, that form a substantial part of these statements, have
been reviewed by our auditors KPMG LLP in accordance with the IAS34 "Interim
Financial Reporting" standard as adopted by the EU. The DouglasBay Group
accounts have not been reviewed.
DouglasBay
The first half of 2010 delivered a strong operating performance and a
significant strengthening in the Group's financial position.
DouglasBay underlying EBITDA increased by 12% to GBP18.1m (H1 2009: GBP16.1m),
driven by higher operating profits from TDG.
The Group was strongly cash generative with higher operational cash flow of
GBP16.7m (H1 2009: GBP1.1m), before interest and tax paid of GBP5.2m,
attributable to increased earnings and better management of working capital.
Combined with cash proceeds of GBP40.8m from property disposals and GBP2.2m from
the sale of investments in TLIT, this cut net debt by 60% to GBP34.9m as at 30
June 2010 (2009: GBP86.7m), a reduction on GBP51.8m over the six month period.
Over the first half consolidated net assets fell from GBP133.5m to GBP126.4m,
due principally to a GBP11.4m reduction in the IAS19 surplus of the TDG defined
pension benefit scheme from changes in discount rate and inflation assumptions.
As at 30 June 2010 the balance sheet contained GBP6.1m of assets held for sale,
comprising three properties. Since the period end a further property has been
sold.
Group financing
The Group's debt finance is provided by an asset backed facility from a
syndicate led by Burdale Financial Limited, which matures in October 2013. This
facility was originally for borrowings of up to GBP165.0m but following property
disposals has reduced to GBP110.0m.
The facility comprises three elements, a property facility of up to GBP40.6m, a
receivables facility of up to GBP65.0m and an equipment facility of up to
GBP4.4m. The total borrowings under this facility at 30 June 2010 were GBP63.9m
(2009: GBP97.1m) with borrowings under the receivables and equipment facilities
being GBP37.2m (2009: GBP44.8m). A working capital facility of GBP10.0m is
provided by funds managed by Laxey Partners of which none was drawn at 30 June
2010 (2009: GBP5.2m). An additional facility, currently unused, of up to
GBP16.0m is available from funds managed by Laxey Partners.
TDG
TDG's revenue for the first six months was up 4% at GBP340.0m (H1 2009:
GBP327.8m) and ahead half-on-half (H2 2009: GBP334.2m) as trading volumes
improved. Underlying operating profit before DouglasBay management charges was
GBP12.1m (H1 2009: GBP8.7m), a 39% gain on the same stage last year. Higher
operating margins reflected the more competitive cost base now in place
following last year's revitalisation programme.
In line with its strong trading performance, TDG's underlying EBITDA before
DouglasBay management charges, was ahead 11% to GBP18.9m, compared to GBP17.1m
in the first half of 2009. Operational cash flow was equally encouraging at
GBP14.4m, up GBP13.3m from the 2009 equivalent, demonstrating a healthy EBITDA
to operating cash flow conversion rate. Cash flow from operating activities
helped to fund capital expenditure of GBP3.5m (H1 2009: GBP3.1m), a level which
reflects TDG's focus on asset-light solutions and again proved no hindrance to
the company's growth or to success in securing new business. The more
favourable trading performance and planned property disposals together combined
to help reduce TDG's net debt by close to 70% over the six month period.
Operating profit before management charges at GBP12.1m compares to GBP8.7m in H1
2009 and GBP9.2m in H1 2008, more than compensating for the new asset light
business model following the real-estate sale & leaseback programme over the
past 12 months. In other words, on a like-for-like basis after adjusting for the
additional rent incurred following the shift of strategy to asset light, the
GBP12.1m would need to be compared against GBP6.0m for H1 2009 and GBP6.2m for
H1 2008.
DouglasBay Property Group
Four TDG properties, at Stretton, Batley, Lancaster and a site in Manchester,
were transferred into DBPG at a market value cost of GBP7.3m, together with
associated bank debt. As with the West Hallam and Carnforth sites transferred
in 2009, DBPG now receives an arm's length rental income from TDG for the use of
these properties.
TLIT
Though market conditions to date have restricted our ability to liquidate TLIT's
portfolio, during the first half we successfully secured the sale of three
investments, for cash proceeds of GBP2.2m.
As at 30 June 2010 the portfolio was valued at GBP6.1m (2009: GBP6.2m),
comprising remaining holdings in quoted and unquoted companies and cash
generated from the disposal of stakes.
Summary
It has been a successful six months for DouglasBay, despite the difficult
economic conditions, with cost reduction benefits from last year's
revitalisation programme at TDG reflected in sharply improved underlying
earnings per share for the Group of 0.58p (H1 2009: 0.06p).
Importantly, our strong focus on cash generation has enabled a large portion of
Group debt to be repaid, strengthening our balance sheet and positioning us well
for further progress in 2010 and thereafter.
Geoff Bicknell
Chief Financial Officer
4 August 2010
Condensed consolidated statement of comprehensive income
Six months ended 30 June 2010
+---------------------------------------+-------+---------+---------+
| | | 6 | 6 |
| | | months | months |
| | | to 30 | to 30 |
| | | June | June |
| | | 2010 | 2009 |
+---------------------------------------+-------+---------+---------+
| |Notes | GBP'm | GBP'm |
+---------------------------------------+-------+---------+---------+
| Continuing operations | | | |
+---------------------------------------+-------+---------+---------+
| Revenue | 3 | 340.0 | 327.8 |
+---------------------------------------+-------+---------+---------+
| Operating expenses | | (329.0) | (320.1) |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Underlying operating profit | 4 | 11.0 | 7.7 |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Amortisation of acquisition | 5 | (1.5) | (0.2) |
| intangibles | | | |
+---------------------------------------+-------+---------+---------+
| Rationalisation costs | 5 | (1.6) | (4.4) |
+---------------------------------------+-------+---------+---------+
| Site closure costs | 5 | (1.6) | - |
+---------------------------------------+-------+---------+---------+
| Onerous lease costs | 5 | (0.1) | - |
+---------------------------------------+-------+---------+---------+
| Impairment of trade receivables | 5 | - | (0.6) |
+---------------------------------------+-------+---------+---------+
| Impairment of property | 5 | (2.5) | - |
+---------------------------------------+-------+---------+---------+
| Profit/(loss) on sale of properties | 5 | 3.3 | (0.1) |
+---------------------------------------+-------+---------+---------+
| Release of dilapidation provisions | 5 | 1.2 | - |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Operating profit | | 8.2 | 2.4 |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Finance costs | 7 | (3.7) | (4.7) |
+---------------------------------------+-------+---------+---------+
| Finance income | 7 | 0.1 | 0.5 |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Profit/(loss) before tax | | 4.6 | (1.8) |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Tax credit/(charge) on profit/(loss) | | | |
| on continuing operations | | | |
+---------------------------------------+-------+---------+---------+
| Isle of Man tax | 8 | - | - |
+---------------------------------------+-------+---------+---------+
| Overseas tax | 8 | 1.4 | (1.1) |
+---------------------------------------+-------+---------+---------+
| | | 1.4 | (1.1) |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Profit/(loss) for the period | | 6.0 | (2.9) |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Attributable to: | | | |
+---------------------------------------+-------+---------+---------+
| Equity holders of the parent | 9 | 5.9 | (3.1) |
+---------------------------------------+-------+---------+---------+
| Minority interest | | 0.1 | 0.2 |
+---------------------------------------+-------+---------+---------+
| | | 6.0 | (2.9) |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
| Earnings (pence) per share | | | |
+---------------------------------------+-------+---------+---------+
| Basic earnings/(loss) per share | 9 | 0.44p | (0.23)p |
+---------------------------------------+-------+---------+---------+
| Underlying earnings per share | 9 | 0.58p | 0.06p |
| | | | |
+---------------------------------------+-------+---------+---------+
| | | | |
+---------------------------------------+-------+---------+---------+
+---------------------------------------+-----+--------+--------+
| | | 6 | 6 |
| | | months | months |
| | | to 30 | to 30 |
| | | June | June |
| | | 2010 | 2009 |
+---------------------------------------+-----+--------+--------+
| | | GBP'm | GBP'm |
+---------------------------------------+-----+--------+--------+
| Profit/(loss) for the period | | 6.0 | (2.9) |
+---------------------------------------+-----+--------+--------+
| | | | |
+---------------------------------------+-----+--------+--------+
| Other comprehensive income | | | |
+---------------------------------------+-----+--------+--------+
| Currency translation adjustments | | 0.2 | (3.9) |
+---------------------------------------+-----+--------+--------+
| Actuarial losses on defined benefit | | (16.4) | (8.5) |
| pension | | | |
+---------------------------------------+-----+--------+--------+
| Income tax on other comprehensive | | 3.1 | 1.7 |
| income | | | |
+---------------------------------------+-----+--------+--------+
| Unrealised depreciation of investment | | - | (0.7) |
+---------------------------------------+-----+--------+--------+
| Other comprehensive loss for the | | (13.1) | (11.4) |
| period, net of income tax | | | |
+---------------------------------------+-----+--------+--------+
| | | | |
+---------------------------------------+-----+--------+--------+
| Total comprehensive loss for the | | (7.1) | (14.3) |
| period | | | |
+---------------------------------------+-----+--------+--------+
| | | | |
+---------------------------------------+-----+--------+--------+
| Attributable to: | | | |
+---------------------------------------+-----+--------+--------+
| Equity holders of the parent | | (7.0) | (14.5) |
+---------------------------------------+-----+--------+--------+
| Minority interests | | (0.1) | 0.2 |
+---------------------------------------+-----+--------+--------+
| | | (7.1) | (14.3) |
+---------------------------------------+-----+--------+--------+
Condensed consolidated statement of financial position
As at 30 June 2010
+------------------------------------+-------+---------+----------+
| | | As at | As at |
| | | 30 June | 31 |
| | | | December |
| | | 2010 | 2009 |
+------------------------------------+-------+---------+----------+
| |Notes | GBP'm | GBP'm |
+------------------------------------+-------+---------+----------+
| Assets | | | |
+------------------------------------+-------+---------+----------+
| Non-current assets | | | |
+------------------------------------+-------+---------+----------+
| Property, plant and equipment | 10 | 110.8 | 129.0 |
+------------------------------------+-------+---------+----------+
| Investments | | 2.1 | 4.7 |
+------------------------------------+-------+---------+----------+
| Goodwill | | 27.1 | 26.8 |
+------------------------------------+-------+---------+----------+
| Intangible assets | | 36.3 | 38.4 |
+------------------------------------+-------+---------+----------+
| Retirement benefit asset | | 30.4 | 41.8 |
+------------------------------------+-------+---------+----------+
| | | 206.7 | 240.7 |
+------------------------------------+-------+---------+----------+
| Current assets | | | |
+------------------------------------+-------+---------+----------+
| Inventories | | 2.2 | 2.2 |
+------------------------------------+-------+---------+----------+
| Available-for-sale financial | 11 | 6.1 | 30.6 |
| assets | | | |
+------------------------------------+-------+---------+----------+
| Trade and other receivables | | 94.3 | 91.5 |
+------------------------------------+-------+---------+----------+
| Prepayments | | 30.4 | 20.2 |
+------------------------------------+-------+---------+----------+
| Cash and cash equivalents | 13 | 30.4 | 17.0 |
+------------------------------------+-------+---------+----------+
| | | 163.4 | 161.5 |
+------------------------------------+-------+---------+----------+
| | | | |
+------------------------------------+-------+---------+----------+
| Total assets | | 370.1 | 402.2 |
+------------------------------------+-------+---------+----------+
| | | | |
+------------------------------------+-------+---------+----------+
| Liabilities | | | |
+------------------------------------+-------+---------+----------+
| Non-current liabilities | | | |
+------------------------------------+-------+---------+----------+
| Preference shares | 12 | 0.3 | 0.3 |
+------------------------------------+-------+---------+----------+
| Interest bearing borrowings | 12 | 56.9 | 69.6 |
+------------------------------------+-------+---------+----------+
| Deferred income | | 0.2 | 0.5 |
+------------------------------------+-------+---------+----------+
| Provisions | | 4.0 | 5.0 |
+------------------------------------+-------+---------+----------+
| Post employment retirement benefit | | 2.8 | 2.8 |
| liability | | | |
+------------------------------------+-------+---------+----------+
| Deferred tax liabilities | | 13.7 | 20.5 |
+------------------------------------+-------+---------+----------+
| | | 77.9 | 98.7 |
+------------------------------------+-------+---------+----------+
| | | | |
+------------------------------------+-------+---------+----------+
| Current liabilities | | | |
+------------------------------------+-------+---------+----------+
| Interest bearing borrowings | 12 | 8.1 | 28.6 |
+------------------------------------+-------+---------+----------+
| Provisions | | 8.0 | 9.6 |
+------------------------------------+-------+---------+----------+
| Tax payables | | 3.3 | 1.5 |
+------------------------------------+-------+---------+----------+
| Trade and other payables | | 146.4 | 130.3 |
+------------------------------------+-------+---------+----------+
| | | 165.8 | 170.0 |
+------------------------------------+-------+---------+----------+
| | | | |
+------------------------------------+-------+---------+----------+
| Total liabilities | | (243.7) | (268.7) |
+------------------------------------+-------+---------+----------+
| | | | |
+------------------------------------+-------+---------+----------+
| Net assets | | 126.4 | 133.5 |
+------------------------------------+-------+---------+----------+
| | | | |
+------------------------------------+-------+---------+----------+
| Equity | | | |
+------------------------------------+-------+---------+----------+
| Issued share capital | | 66.9 | 66.9 |
+------------------------------------+-------+---------+----------+
| Share premium | | 66.9 | 66.9 |
+------------------------------------+-------+---------+----------+
| Hedging and translation reserves | | 0.5 | 0.3 |
+------------------------------------+-------+---------+----------+
| Retained loss | | (8.4) | (1.2) |
+------------------------------------+-------+---------+----------+
| Capital and reserves | | 125.9 | 132.9 |
+------------------------------------+-------+---------+----------+
| Minority interest | | 0.5 | 0.6 |
+------------------------------------+-------+---------+----------+
| Total equity | | 126.4 | 133.5 |
+------------------------------------+-------+---------+----------+
Condensed consolidated statement of cash flows
Six months ended 30 June 2010
+------------------------------------+-------+--------+---------+
| | | 6 | 6 |
| | | months | months |
| | | to 30 | to 30 |
| | | June | June |
| | | 2010 | 2009 |
+------------------------------------+-------+--------+---------+
| |Notes | GBP'm | GBP'm |
+------------------------------------+-------+--------+---------+
| Cash flows from operating | | | |
| activities | | | |
+------------------------------------+-------+--------+---------+
| Cash generated from operations | | 16.7 | 1.1 |
| (page 10) | | | |
+------------------------------------+-------+--------+---------+
| Interest paid | | (4.9) | (5.1) |
+------------------------------------+-------+--------+---------+
| Tax paid | | (0.3) | (2.6) |
+------------------------------------+-------+--------+---------+
| Net cash inflow/(outflow) from | | 11.5 | (6.6) |
| operating activities | | | |
+------------------------------------+-------+--------+---------+
| | | | |
+------------------------------------+-------+--------+---------+
| Cash flows from investing | | | |
| activities | | | |
+------------------------------------+-------+--------+---------+
| Interest received | | 0.3 | 0.5 |
+------------------------------------+-------+--------+---------+
| Purchase of property, plant and | | (3.5) | (3.1) |
| equipment and intangibles | | | |
+------------------------------------+-------+--------+---------+
| Proceeds from disposals of | | 43.0 | 21.9 |
| property, plant and equipment | | | |
+------------------------------------+-------+--------+---------+
| Deferred consideration for the | | 0.1 | (1.3) |
| purchase of businesses | | | |
+------------------------------------+-------+--------+---------+
| Acquisition of businesses | | (0.2) | (0.3) |
+------------------------------------+-------+--------+---------+
| Net cash inflow from investing | | 39.7 | 17.7 |
| activities | | | |
+------------------------------------+-------+--------+---------+
| | | | |
+------------------------------------+-------+--------+---------+
| Cash flows from financing | | | |
| activities | | | |
+------------------------------------+-------+--------+---------+
| Drawdown of secured borrowings | | - | 6.0 |
+------------------------------------+-------+--------+---------+
| Increase in borrowings from | | - | 9.0 |
| majority shareholder | | | |
+------------------------------------+-------+--------+---------+
| Repayment of borrowings from | | (5.0) | - |
| majority shareholder | | | |
+------------------------------------+-------+--------+---------+
| Repayment of secured borrowings | | (31.9) | (37.8) |
+------------------------------------+-------+--------+---------+
| Repayment of term unsecured | | - | (0.3) |
| borrowings | | | |
+------------------------------------+-------+--------+---------+
| Loan to majority shareholder | | - | (2.0) |
+------------------------------------+-------+--------+---------+
| Dividends paid to minority | | (0.2) | (0.2) |
| interests | | | |
+------------------------------------+-------+--------+---------+
| Proceeds from share incentive plan | | 0.1 | - |
+------------------------------------+-------+--------+---------+
| Net cash outflow from financing | | (37.0) | (25.3) |
| activities | | | |
+------------------------------------+-------+--------+---------+
| | | | |
+------------------------------------+-------+--------+---------+
| Net increase/(decrease) in cash | | 14.2 | (14.2) |
| and cash equivalents | | | |
+------------------------------------+-------+--------+---------+
| Effect of exchange rate changes | | (0.3) | (1.0) |
+------------------------------------+-------+--------+---------+
| Cash and cash equivalents brought | 13 | 16.4 | 21.3 |
| forward | | | |
+------------------------------------+-------+--------+---------+
| Cash and cash equivalents at end | 13 | 30.3 | 6.1 |
| of period | | | |
+------------------------------------+-------+--------+---------+
| | | | |
+------------------------------------+-------+--------+---------+
| Reconciliation of net debt | | | |
+------------------------------------+-------+--------+---------+
| Net increase/(decrease) in cash | | 14.2 | (14.2) |
| and cash equivalents | | | |
+------------------------------------+-------+--------+---------+
| Decrease in debt | | 36.8 | 32.1 |
+------------------------------------+-------+--------+---------+
| Change in net debt from cash flows | | 51.0 | 17.9 |
+------------------------------------+-------+--------+---------+
| Effect of exchange rate changes | | 0.8 | 3.2 |
+------------------------------------+-------+--------+---------+
| Decrease in net debt during the | | 51.8 | 21.1 |
| period | | | |
+------------------------------------+-------+--------+---------+
| Net debt brought forward | 12 | (86.7) | (129.6) |
+------------------------------------+-------+--------+---------+
| Net debt at end of period | 12 | (34.9) | (108.5) |
+------------------------------------+-------+--------+---------+
Reconciliation of operating profit from operations to net cash from operating
activities
+-------------------------------------------+--------+---------+
| | 6 | 6 |
| | months | months |
| | to | to |
| | 30 | 30 June |
| | June | 2009 |
| | 2010 | |
+-------------------------------------------+--------+---------+
| | GBP'm | GBP'm |
+-------------------------------------------+--------+---------+
| | | |
+-------------------------------------------+--------+---------+
| Operating profit | 8.2 | 2.4 |
+-------------------------------------------+--------+---------+
| Adjustments for: | | |
+-------------------------------------------+--------+---------+
| Depreciation of property, plant, | 7.1 | 8.4 |
| equipment and other intangibles | | |
+-------------------------------------------+--------+---------+
| Impairment of assets | 2.9 | (0.9) |
+-------------------------------------------+--------+---------+
| Amortisation of acquisition intangible | 1.5 | 0.2 |
| assets | | |
+-------------------------------------------+--------+---------+
| (Gain)/loss on disposal of plant and | (3.4) | 0.3 |
| equipment | | |
+-------------------------------------------+--------+---------+
| Release of investment grants | (0.1) | (0.1) |
+-------------------------------------------+--------+---------+
| Foreign exchange | (0.3) | 0.5 |
+-------------------------------------------+--------+---------+
| | 15.9 | 10.8 |
+-------------------------------------------+--------+---------+
| Changes in working capital | | |
+-------------------------------------------+--------+---------+
| Decrease in stocks | - | 0.2 |
+-------------------------------------------+--------+---------+
| Increase in debtors | (12.0) | (0.2) |
+-------------------------------------------+--------+---------+
| Increase/(decrease) in creditors | 17.4 | (7.9) |
+-------------------------------------------+--------+---------+
| | | |
+-------------------------------------------+--------+---------+
| Increase/(decrease) in working capital | 5.4 | (7.9) |
+-------------------------------------------+--------+---------+
| | 21.3 | 2.9 |
+-------------------------------------------+--------+---------+
| Pension deficit funding | (4.6) | (1.8) |
+-------------------------------------------+--------+---------+
| Cash generated from continuing activities | 16.7 | 1.1 |
| before interest and tax | | |
+-------------------------------------------+--------+---------+
Notes
1. Basis of preparation
These unaudited interim consolidated financial statements do not constitute
statutory accounts and have been prepared on a basis consistent with the Group's
accounting policies as set out in the 2009 Annual Report and Accounts. This
condensed consolidated interim financial information has not been externally
reviewed or audited.
These interim consolidated financial statements have been prepared in accordance
with AIM Rules for Companies and in accordance with IAS 34 "Interim Financial
Reporting". They do not include all of the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements for the period ended 31 December 2009.
These financial statements have been prepared on a going concern basis and the
Directors consider that the Group will be able to meet its liabilities as they
fall due for the foreseeable future. The Directors have prepared base case and
sensitised cash flow projections for the period to September 2011 which are
based on certain assumptions and show the Group is capable of operating within
the existing financing arrangements whilst meeting the required covenant tests
within the financing arrangements. The Group's debt finance is provided by an
asset backed facility from a syndicate led by Burdale Financial Limited,
maturing in October 2013; a GBP10.0m working capital facility provided from
funds managed by Laxey Partners repayable in July 2010, of which none was drawn
at 30 June 2010; and an additional facility of up to GBP16.0m available from
Laxey Partners funds if required.
These interim consolidated financial statements have been prepared by applying
the accounting policies and presentation that were applied in the preparation of
the Group's consolidated financial statements for the year ended 31 December
2009, which were prepared in accordance with International Financial Reporting
Standards.
From 1 January 2010 the Group has applied IFRS 3 Business Combinations (2008) in
accounting for business combinations. The application of this standard has not
had a material impact on the results of the Group. There are no other
new/revised standards in the period which have a material impact on the Group.
During the period the pension scheme assumptions have been reviewed and have
been revised to reflect management's assessment of the current position as at 30
June 2010. Discount rate assumptions have been revised from 5.85% at the 2009
year end to 5.5%, and inflation assumptions from 3.5% to 3.2%. This change has
resulted in a reduction in the retirement benefit asset from GBP41.8m at
December 2009 to GBP30.4m at 30 June 2010.
The Directors consider the underlying profit and underlying earnings per share
provide additional meaningful information on underlying performance to
shareholders. The terms "underlying profit" and "exceptional item" are not
defined terms under IFRS and may not be comparable with similarly titled profit
measures reported by other companies. Underlying operating profit is not
intended to be a substitute for, or superior to, GAAP measurements of profit.
The term "underlying" refers to the relevant measure being reported excluding
exceptional items, and amortisation of acquisition intangibles. Exceptional
items are items which are both material and non recurring and are presented as
exceptional items within their relevant consolidated income statement category.
The separate reporting of exceptional items helps provide a better indication of
the Group's underlying business performance. Events which may give rise to the
classification of items as exceptional include the restructuring of the
businesses, the integration of new businesses, gains or losses on the disposal
of businesses and asset impairments and corporate costs.
2. Currency translation
All amounts denominated in overseas currencies for the consolidated income
statement have been translated into sterling at the appropriate average rates
for the period. Period end rates have been used to translate all overseas
amounts included in the consolidated balance sheet.
3. Segmental analysis
Primary segments - business activities
6 months ended 30 June 2010
+------------------+-------+-------+-------+------------+--------------+-------+
| | TDG | TLIT | DBPG | Central | Eliminations | Total |
| | | | | management | & | |
| | | | | | adjustments | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+------------------+-------+-------+-------+------------+--------------+-------+
| Revenue | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Gross sales | 340.0 | - | 1.2 | 1.5 | (2.7) | 340.0 |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Segment results | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Underlying | 10.6 | (0.3) | 0.8 | 0.1 | (0.2) | 11.0 |
| operating | | | | | | |
| profit/(loss) | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Amortisation of | (0.2) | - | - | - | (1.3) | (1.5) |
| acquisition | | | | | | |
| intangibles | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Rationalisation | (1.6) | - | - | - | - | (1.6) |
| costs | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Site closure | (1.6) | - | - | - | - | (1.6) |
| costs | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Onerous lease | (0.1) | - | - | - | - | (0.1) |
| costs | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Impairment of | - | - | - | - | - | - |
| trade | | | | | | |
| receivables | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Impairment of | (0.8) | - | - | - | (1.7) | (2.5) |
| property | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Profit/(loss) on | 6.2 | - | - | - | (2.9) | 3.3 |
| sale of | | | | | | |
| properties | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Release of | 1.2 | - | - | - | - | 1.2 |
| dilapidation | | | | | | |
| provisions | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Operating | 13.7 | (0.3) | 0.8 | 0.1 | (6.1) | 8.2 |
| profit/(loss) | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Finance | (0.6) | 0.2 | (0.4) | (2.8) | - | (3.6) |
| (costs)/income - | | | | | | |
| net | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Profit/(loss) | 13.1 | (0.1) | 0.4 | (2.7) | (6.1) | 4.6 |
| before tax | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Tax | 1.5 | - | - | (0.2) | 0.1 | 1.4 |
| credit/(charge) | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Profit/(loss) | 14.6 | (0.1) | 0.4 | (2.9) | (6.0) | 6.0 |
| for the period | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Capital | 3.2 | - | 7.3 | - | 2.1 | 12.6 |
| expenditure | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Depreciation and | | | | | | |
| amortisation of | 6.8 | - | - | - | 0.3 | 7.1 |
| other | | | | | | |
| intangibles | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
| Amortisation of | | | | | | |
| acquisition | 0.2 | - | - | - | 1.3 | 1.5 |
| intangibles | | | | | | |
+------------------+-------+-------+-------+------------+--------------+-------+
Primary segments - business activities
6 months ended 30 June 2009
+---------------------+-------+-------+-------+------------+--------------+-------+
| | TDG | TLIT | DBPG | Central | Eliminations | Total |
| | | | | management | & | |
| | | | | | adjustments | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Revenue | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Gross sales | 327.8 | - | - | 0.6 | (0.6) | 327.8 |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
| Segment results | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Underlying | 8.1 | - | - | (0.4) | - | 7.7 |
| operating | | | | | | |
| profit/(loss) | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Amortisation of | (0.2) | - | - | - | - | (0.2) |
| acquisition | | | | | | |
| intangibles | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Impairment of | - | - | - | - | - | - |
| goodwill | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Net | - | - | - | (0.7) | 0.7 | - |
| unrealised/realised | | | | | | |
| loss to the | | | | | | |
| carrying value of | | | | | | |
| TLIT investments | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Loss on sale of | (0.1) | - | - | - | - | (0.1) |
| properties | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Impairment of | (0.6) | - | - | - | - | (0.6) |
| trade | | | | | | |
| receivables | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Rationalisation | (4.5) | - | - | - | 0.1 | (4.4) |
| costs | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Operating | 2.7 | - | - | (1.1) | 0.8 | 2.4 |
| profit/(loss) | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Finance | (1.5) | - | - | (2.7) | - | (4.2) |
| (costs)/income - | | | | | | |
| net | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Profit/(loss) | 1.2 | - | - | (3.8) | 0.8 | (1.8) |
| before tax | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Tax | (1.1) | - | - | - | - | (1.1) |
| credit/(charge) | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Profit/(loss) | 0.1 | - | - | (3.8) | 0.8 | (2.9) |
| for the period | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Capital | 3.8 | - | - | - | - | 3.8 |
| expenditure | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Depreciation and | | | | | | |
| amortisation | 8.4 | - | - | - | - | 8.4 |
| of other | | | | | | |
| intangibles | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
| Amortisation of | | | | | | |
| acquisition | 0.2 | - | - | - | - | 0.2 |
| intangibles | | | | | | |
+---------------------+-------+-------+-------+------------+--------------+-------+
+----------------------+-------+-------+-------+------------+--------------+-------+
| | TDG | TLIT | DBPG | Central | Eliminations | Total |
| | | | | management | & | |
| | | | | | adjustments | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------------+-------+-------+-------+------------+--------------+-------+
| As at 30 June | | | | | | |
| 2010 | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Assets: | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Segment assets | 419.6 | 6.5 | 27.9 | 381.2 | (465.1) | 370.1 |
+----------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Liabilities: | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Segment | 227.7 | 0.4 | 27.6 | 267.4 | (279.4) | 243.7 |
| liabilities | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Net | 191.9 | 6.1 | 0.3 | 113.8 | (185.7) | 126.4 |
| assets/(liabilities) | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
+----------------------+-------+-------+-------+------------+--------------+-------+
| | TDG | TLIT | DBPG | Central | Eliminations | Total |
| | | | | management | & | |
| | | | | | adjustments | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------------+-------+-------+-------+------------+--------------+-------+
| As at 31 | | | | | | |
| December 2009 | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Assets: | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Segment assets | 444.7 | 6.3 | 23.0 | 372.0 | (443.8) | 402.2 |
+----------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Liabilities: | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Segment | 253.6 | 0.1 | 23.1 | 255.5 | (263.6) | 268.7 |
| liabilities | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
| Net | 191.1 | 6.2 | (0.1) | 116.5 | (180.2) | 133.5 |
| assets/(liabilities) | | | | | | |
+----------------------+-------+-------+-------+------------+--------------+-------+
Secondary segments - geographical analysis
+---------------------------------------+-----------+-----------+
| | 6 months | 6 months |
| | to | to |
| | 30 June | 30 June |
| | 2010 | 2009 |
+---------------------------------------+-----------+-----------+
| | GBP'm | GBP'm |
+---------------------------------------+-----------+-----------+
| Revenue | | |
+---------------------------------------+-----------+-----------+
| Sales to external customers | | |
+---------------------------------------+-----------+-----------+
| United Kingdom | 252.6 | 226.5 |
+---------------------------------------+-----------+-----------+
| Spain | 31.0 | 29.6 |
+---------------------------------------+-----------+-----------+
| Ireland | 14.6 | 28.5 |
+---------------------------------------+-----------+-----------+
| The Netherlands | 23.2 | 24.3 |
+---------------------------------------+-----------+-----------+
| Belgium | 15.3 | 14.6 |
+---------------------------------------+-----------+-----------+
| Other Europe | 3.3 | 4.3 |
+---------------------------------------+-----------+-----------+
| | 340.0 | 327.8 |
+---------------------------------------+-----------+-----------+
4. Underlying profit is stated after charging/(crediting) the following:
+-------------------------------+-------+------------+---------+
| | Note | 6 months | 6 |
| | | to | months |
| | | 30 June | to |
| | | 2010 | 30 June |
| | | | 2009 |
+-------------------------------+-------+------------+---------+
| | GBP'm | GBP'm |
+---------------------------------------+------------+---------+
| Employee benefits expense | 6 | 97.9 | 110.9 |
+-------------------------------+-------+------------+---------+
| | | |
+---------------------------------------+------------+---------+
| | | |
+---------------------------------------+------------+---------+
| Depreciation of property, plant and | 5.8 | 7.0 |
| equipment | | |
+---------------------------------------+------------+---------+
| Amortisation of other intangibles | 1.3 | 1.4 |
| (excluding acquisition intangibles) | | |
+---------------------------------------+------------+---------+
| | 7.1 | 8.4 |
+---------------------------------------+------------+---------+
| | | |
+---------------------------------------+------------+---------+
| (Profit)/loss on sale of plant and | (0.1) | 0.3 |
| equipment | | |
+---------------------------------------+------------+---------+
| | | |
+---------------------------------------+------------+---------+
| Amortisation of government grants | (0.1) | (0.1) |
+---------------------------------------+------------+---------+
| | | |
+-------------------------------+-------+------------+---------+
5. Exceptional operating profits/(costs)
Exceptional operating profits and costs are included in the consolidated
statement of comprehensive income below underlying operating profit as the
Directors consider these items to be material or non-recurring in nature.
+----------------------------------------+-----------+----------+
| | 6 months | 6 months |
| | to | to |
| | 30 June | 30 June |
| | 2010 | 2009 |
+----------------------------------------+-----------+----------+
| | GBP'm | GBP'm |
+----------------------------------------+-----------+----------+
| Amortisation of acquisition | (1.5) | (0.2) |
| intangibles | | |
+----------------------------------------+-----------+----------+
| Rationalisation costs | (1.6) | (4.4) |
+----------------------------------------+-----------+----------+
| Site closure costs | (1.6) | - |
+----------------------------------------+-----------+----------+
| Onerous lease costs | (0.1) | - |
+----------------------------------------+-----------+----------+
| Impairment of trade receivables | - | (0.6) |
+----------------------------------------+-----------+----------+
| Impairment of property | (2.5) | - |
+----------------------------------------+-----------+----------+
| Profit/(loss) on sale of properties | 3.3 | (0.1) |
+----------------------------------------+-----------+----------+
| Release of dilapidation provisions | 1.2 | - |
+----------------------------------------+-----------+----------+
| | (2.8) | (5.3) |
+----------------------------------------+-----------+----------+
6. Employee benefits expense
+----------------------------------------+-----------+----------+
| | 6 months | 6 months |
| | to | to |
| | 30 June | 30 June |
| | 2010 | 2009 |
+----------------------------------------+-----------+----------+
| | GBP'm | GBP'm |
+----------------------------------------+-----------+----------+
| Wages and salaries | 88.0 | 93.8 |
+----------------------------------------+-----------+----------+
| Post employment expense | 0.5 | 3.1 |
+----------------------------------------+-----------+----------+
| Employee termination benefits | 0.7 | 4.4 |
+----------------------------------------+-----------+----------+
| Social security costs | 8.7 | 9.6 |
+----------------------------------------+-----------+----------+
| | 97.9 | 110.9 |
+----------------------------------------+-----------+----------+
7. Finance costs/(income)
+---------------------------------------+-----------+-----------+
| | 6 months | 6 months |
| | to | to |
| | 30 June | 30 June |
| | 2010 | 2009 |
+---------------------------------------+-----------+-----------+
| | GBP'm | GBP'm |
+---------------------------------------+-----------+-----------+
| Interest expense: | | |
+---------------------------------------+-----------+-----------+
| Secured loans | 2.7 | 3.6 |
+---------------------------------------+-----------+-----------+
| Finance lease rental payments | 0.1 | 0.1 |
+---------------------------------------+-----------+-----------+
| Interest payable to immediate parent | 0.2 | 0.4 |
| company | | |
+---------------------------------------+-----------+-----------+
| Other financial charges: | | |
+---------------------------------------+-----------+-----------+
| Unwinding of discount on the | 0.1 | 0.1 |
| liability for insurance claims | | |
+---------------------------------------+-----------+-----------+
| Other finance costs | 0.6 | 0.5 |
+---------------------------------------+-----------+-----------+
| | 3.7 | 4.7 |
+---------------------------------------+-----------+-----------+
| | | |
+---------------------------------------+-----------+-----------+
| Interest receivable: | | |
+---------------------------------------+-----------+-----------+
| Interest receivable | - | (0.3) |
+---------------------------------------+-----------+-----------+
| Foreign exchange | (0.1) | (0.2) |
+---------------------------------------+-----------+-----------+
| | (0.1) | (0.5) |
+---------------------------------------+-----------+-----------+
| | | |
+---------------------------------------+-----------+-----------+
| | 3.6 | 4.2 |
+---------------------------------------+-----------+-----------+
8. Tax
+--------------------------------------------+---------+--------+
| Analysis of tax (credit)/charge in the | 6 | 6 |
| period | months | months |
| | to 30 | to 30 |
| | June | June |
| | 2010 | 2009 |
+--------------------------------------------+---------+--------+
| | GBP'm | GBP'm |
+--------------------------------------------+---------+--------+
| Current tax: | | |
+--------------------------------------------+---------+--------+
| Isle of Man income tax | - | - |
+--------------------------------------------+---------+--------+
| Overseas tax | 2.2 | 0.2 |
+--------------------------------------------+---------+--------+
| | 2.2 | 0.2 |
+--------------------------------------------+---------+--------+
| | | |
+--------------------------------------------+---------+--------+
| Deferred tax : | | |
+--------------------------------------------+---------+--------+
| Isle of Man deferred tax | - | - |
+--------------------------------------------+---------+--------+
| Overseas tax | (3.6) | 0.9 |
+--------------------------------------------+---------+--------+
| | (3.6) | 0.9 |
+--------------------------------------------+---------+--------+
| | | |
+--------------------------------------------+---------+--------+
| Tax (credit)/charge on continuing | (1.4) | 1.1 |
| activities | | |
+--------------------------------------------+---------+--------+
| | | |
+--------------------------------------------+---------+--------+
| Analysed as: | | |
+--------------------------------------------+---------+--------+
| Tax on headline earnings | (1.4) | 1.1 |
+--------------------------------------------+---------+--------+
| Tax credit on exceptional operating | - | - |
| (profit)/cost | | |
+--------------------------------------------+---------+--------+
| Tax (credit)/charge on continuing | (1.4) | 1.1 |
| activities | | |
+--------------------------------------------+---------+--------+
9. Earnings per share
The calculation of basic earnings per share at 30 June 2010 was based on the
profit attributable to ordinary shareholders of GBP5.9m (2009: loss attributable
to ordinary shareholders GBP3.1m) and a weighted average number of ordinary
shares outstanding of 1,337,815,633 (2009: 1,337,815,633), reflecting the period
over which earnings per share has been calculated 1 January 2010 until 30 June
2010 (2009: 1 January 2009 until 30 June 2009).
There was no dilution effect in the period ended 30 June 2010.
+-----------------------------------------+---------------+---------------+
| | 6 months | 6 |
| | to | months |
| | 30 June | to |
| | 2010 | 30 June |
| | | 2009 |
+-----------------------------------------+---------------+---------------+
| Weighted average number of shares | 1,337,815,633 | 1,337,815,633 |
+-----------------------------------------+---------------+---------------+
+-----------------------------------------+----------+---------+
| Earnings per share | 6 months | 6 |
| | to | months |
| | 30 June | to |
| | 2010 | 30 June |
| | | 2009 |
+-----------------------------------------+----------+---------+
| | GBP'm | GBP'm |
+-----------------------------------------+----------+---------+
| Profit/(loss) attributable to ordinary | 5.9 | (3.1) |
| shareholders | | |
+-----------------------------------------+----------+---------+
| | | |
+-----------------------------------------+----------+---------+
| | pence | pence |
+-----------------------------------------+----------+---------+
| Earnings/(loss) per share | 0.44 | (0.23) |
+-----------------------------------------+----------+---------+
Underlying earnings per share
An alternative earnings per share number is set out below, being before any
exceptional items plus related tax, since the Directors consider that this
provides further information on the underlying performance of the Group.
+----------------------------------+-------+-----------+----------+
| | Notes | 6 months | 6 months |
| | | to | to |
| | | 30 June | 30 June |
| | | 2010 | 2009 |
+----------------------------------+-------+-----------+----------+
| | pence | pence |
+------------------------------------------+-----------+----------+
| Underlying earnings per share | 0.58 | 0.06 |
+------------------------------------------+-----------+----------+
| | | |
+------------------------------------------+-----------+----------+
| | 6 months | 6 months |
| | to | to |
| | 30 June | 30 June |
| | 2010 | 2009 |
+------------------------------------------+-----------+----------+
| | GBP'm | GBP'm |
+------------------------------------------+-----------+----------+
| Underlying earnings are determined as | | |
| follows: | | |
+------------------------------------------+-----------+----------+
| Profit/(loss) attributable to | 5.9 | (3.1) |
| ordinary shareholders | | |
+------------------------------------------+-----------+----------+
| Exceptional items | 5 | 2.8 | 5.3 |
+----------------------------------+-------+-----------+----------+
| Tax on exceptional items | (0.9) | (1.4) |
+------------------------------------------+-----------+----------+
| Underlying earnings | 7.8 | 0.8 |
+----------------------------------+-------+-----------+----------+
10. Property, plant and equipment
+----------------------------------------+-----------+----------+
| | As at | As at |
| | 30 June | 31 Dec |
| | 2010 | 2009 |
+----------------------------------------+-----------+----------+
| | GBP'm | GBP'm |
+----------------------------------------+-----------+----------+
| Land and buildings | 82.0 | 92.7 |
+----------------------------------------+-----------+----------+
| Vehicles | 4.1 | 6.1 |
+----------------------------------------+-----------+----------+
| Plant and equipment | 24.7 | 30.2 |
+----------------------------------------+-----------+----------+
| | 110.8 | 129.0 |
+----------------------------------------+-----------+----------+
11. Available-for sale financial assets
Available-for-sale financial assets relate to the identification by the
Directors of two UK properties and one Dutch property, with a total net book
value of GBP6.1m (H1 2009: GBP30.6m), which the Directors intend to sell in
2010.
12. Net borrowings
+----------------------------------------+-----------+----------+
| | As at | As at |
| | 30 June | 31 Dec |
| | 2010 | 2009 |
+----------------------------------------+-----------+----------+
| | GBP'm | GBP'm |
+----------------------------------------+-----------+----------+
| Non current: | | |
+----------------------------------------+-----------+----------+
| Non redeemable preference shares | 0.3 | 0.3 |
+----------------------------------------+-----------+----------+
| Secured bank loans | 55.8 | 68.5 |
+----------------------------------------+-----------+----------+
| Property finance leases | 1.1 | 1.1 |
+----------------------------------------+-----------+----------+
| | 57.2 | 69.9 |
+----------------------------------------+-----------+----------+
| | | |
+----------------------------------------+-----------+----------+
| Current: | | |
+----------------------------------------+-----------+----------+
| Bank overdrafts | 0.1 | 0.6 |
+----------------------------------------+-----------+----------+
| Secured bank loans | 8.0 | 21.3 |
+----------------------------------------+-----------+----------+
| Additional short term loan facility | - | 6.7 |
+----------------------------------------+-----------+----------+
| | 8.1 | 28.6 |
+----------------------------------------+-----------+----------+
| Borrowings | 65.3 | 98.5 |
+----------------------------------------+-----------+----------+
| Deduct: | | |
+----------------------------------------+-----------+----------+
| Short term deposits and restricted | (21.3) | (13.2) |
| cash balances | | |
+----------------------------------------+-----------+----------+
| Cash | (9.1) | (3.8) |
+----------------------------------------+-----------+----------+
| | (30.4) | (17.0) |
+----------------------------------------+-----------+----------+
| External net debt | 34.9 | 81.5 |
+----------------------------------------+-----------+----------+
| Loan payable to ultimate controlling | - | 5.2 |
| party | | |
+----------------------------------------+-----------+----------+
| Net debt | 34.9 | 86.7 |
+----------------------------------------+-----------+----------+
13. Analysis of cash and cash equivalents
+----------------------------------------+-----------+----------+
| | As at | As at |
| | 30 June | 31 Dec |
| | 2010 | 2009 |
+----------------------------------------+-----------+----------+
| | GBP'm | GBP'm |
+----------------------------------------+-----------+----------+
| Restricted cash balances | 10.0 | 9.2 |
+----------------------------------------+-----------+----------+
| Deposits and guarantees | 11.3 | 4.0 |
+----------------------------------------+-----------+----------+
| Cash | 9.1 | 3.8 |
+----------------------------------------+-----------+----------+
| Cash and cash equivalents (balance | 30.4 | 17.0 |
| sheet) | | |
+----------------------------------------+-----------+----------+
| Bank overdrafts | (0.1) | (0.6) |
+----------------------------------------+-----------+----------+
| Cash and cash equivalents (cash flow | 30.3 | 16.4 |
| statement) | | |
+----------------------------------------+-----------+----------+
14. Post balance sheet event
On 19 July 2010 the Group sold one property for a net consideration of GBP1.4m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDICGGBGGS
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