TIDMDPLM
RNS Number : 7579Y
Diploma PLC
17 May 2021
DIPLOMA PLC
12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX
TELEPHONE: +44 (0)20 7549 5700
17 May 2021
ANNOUNCEMENT OF HALF YEAR RESULTS
FOR THE SIX MONTHSED 31 MARCH 2021
"Very strong first half performance and full year outlook ahead
of expectations"
-- Outstanding response of our colleagues to the pandemic
-- Very strong H1 performance with improving momentum into H2
-- Windy City Wire ('WCW') performance exceptional
-- Strong balance sheet and active acquisition pipeline
-- Environmental, Social and Governance ('ESG') activity intensifying
-- Significant upgrade to full year guidance
HY2021 HY2020
GBPm GBPm
Revenue 365.2 283.6 +29%
Underlying revenue growth
(1) 2% 1%
Adjusted operating profit(2) 66.6 49.9 +33%
Adjusted operating margin(2) 18.2% 17.6% +60bps
Statutory operating profit 46.3 42.2 +10%
Free cash flow(3) 34.3 21.8 +57%
Adjusted earnings per
share(2) 38.4p 32.3p +19%
Basic earnings per share 25.5p 27.4p -7%
Interim dividend per 12.5p - n/a
share
(1) Adjusted for acquisition contribution and currency
effects
(2) Before acquisition related charges and fair value
remeasurements
(3) Before cash payments on acquisitions and dividends
Commenting on the results, Johnny Thomson, Chief Executive
Officer, said:
"I want to thank all my Diploma colleagues for their outstanding
dedication in this challenging year - their wellbeing is our utmost
priority. Our performance in the period was very strong and we have
exciting trading momentum into the second half, resulting in an
upgrade to our full year expectations. We continue to execute our
strategy of building high quality scalable businesses for organic
growth. I am pleased with the exceptional contribution of our
acquisitions in the period, particularly Windy City Wire.
Delivering Value Responsibly - our ESG agenda - is core to our
strategy and we are intensifying our activities. I remain very
optimistic about our prospects for the short and long term."
Very strong first half performance
-- Underlying revenue growth of 2% against a pre-pandemic
comparator, with our revenue initiatives, improving demand and
contribution from acquisitions resulting in a return to growth in
all three Sectors by the end of the period.
-- Exceptional performance from acquisitions, particularly WCW.
-- Improving momentum across all three Sectors during the period:
o Controls: recovering very well with our existing businesses
('International Controls') returning to underlying growth by the
end of the period, ahead of our expectations; exceptional WCW
performance, well ahead of plan.
o Life Sciences: excellent performance with the easing of
lockdown restrictions boosting capital sales particularly; Simonsen
& Weel acquisition contribution well ahead of plan.
o Seals: exciting progress in International Seals and North
America; successful transition to new Aftermarket facility in
Louisville.
-- Intense focus on supply chain to ensure product availability
and manage inflation appropriately.
-- Adjusted operating profit up 33% and margin +60bps to 18.2%
reflecting the benefits of restructuring, accretion from
acquisitions, and Covid-related expense savings.
Delivering Value Responsibly: intensifying our ESG activity
-- Acceleration of ESG initiatives core to the strategy with
significant ongoing activity across our businesses.
-- Current focus on establishing a Group-wide approach and a
structured programme to consistently embed ESG in our culture.
-- Five priority areas: colleague engagement; health and safety;
diversity, equity and inclusion; supply chain management; and
environment.
-- Scope and measures for each priority area being defined
during FY2021 with a view to rolling out targets in FY2022.
Strong balance sheet and cash generation
-- Good cash conversion supporting a 57% increase in free cash flow.
-- Strong financial position with net debt expected to be less than 1x EBITDA by year-end.
-- Successful integration of WCW; a further ca.GBP50m spent on
three high quality acquisitions.
-- Acquisitions continue to be an integral part of the Group's
growth strategy and, while we will remain disciplined, we have an
active pipeline of opportunities.
Current trading and outlook
-- Exciting trends into H2 with a further acceleration in
underlying growth for all three Sectors in April driven by our
revenue initiatives, improving demand and a strong contribution
from acquisitions.
-- As a result of the strong trading performance in H1 and
positive momentum into H2, we now expect full year results
significantly ahead of our previous expectations.
-- Interim dividend of 12.5p, an increase ahead of earnings
growth [1] reflecting our confidence in the Group's growth outlook
and future prospects.
Notes:
1. Diploma PLC uses alternative performance measures as key
financial indicators to assess the underlying performance of the
Group. These include adjusted operating profit, adjusted profit
before tax, adjusted earnings per share, free cash flow and ROATCE.
All references in this Announcement to "underlying" revenues refer
to reported results on a constant currency basis, before acquired
or disposed businesses (ex-growth basis) and include growth
generated by acquisitions under our ownership. The narrative in
this Announcement is based on these alternative measures and an
explanation is set out in note 2 to the condensed consolidated
financial statements in this Announcement.
2. Certain statements contained in this Announcement constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of Diploma PLC, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such statements. Such risks, uncertainties and other factors include, among others, exchange rates, general economic conditions and the business environment.
There will be a presentation of the results to analysts and
investors at 9:00am this morning via audio conference call and
webcast. Conference call dial in details:
-- Dial in: +44 (0)330 336 9125
-- Participant access code: 6550576
Register your attendance for the webcast at:
https://webcasting.brrmedia.co.uk/broadcast/6076aca70386285386cc82fa
This presentation will be available after the conference call
at: https://www.diplomaplc.com/investors/financial-presentations/ .
A replay of the audio will be available on the same link after the
event .
For further information please contact:
Diploma PLC - +44 (0)20 7549 5700
Johnny Thomson, Chief Executive Officer
Barbara Gibbes, Chief Financial Officer
Kellie McAvoy, Head of Investor Relations
Tulchan Communications - +44 (0)20 7353 4200
Martin Robinson
Olivia Peters
NOTE TO EDITORS:
Diploma PLC is an international group supplying specialised
products and services to a wide range of end segments in our three
Sectors of Life Sciences, Seals and Controls.
Diploma's businesses are focussed on supplying essential
products and services which are funded by the customers' operating
rather than their capital budgets, providing recurring income and
stable revenue growth.
Our businesses then design their individual business models to
closely meet the requirements of their customers, offering a blend
of high quality customer service, deep technical support and value
adding activities. By supplying essential solutions, not just
products, we build strong long term relationships with our
customers and suppliers, which support attractive and sustainable
margins. Finally, we encourage an entrepreneurial culture in our
businesses through our decentralised management structure. We want
our managers to feel that they have the freedom to run their own
businesses, while being able to draw on the support and resources
of a larger group. These essential values ensure that decisions are
made close to the customer and that the businesses are agile and
responsive to changes in the market and the competitive
environment. The Group employs ca. 2,400 employees and its
principal operating businesses are located in the UK, Northern
Europe, North America and Australia.
Over the last ten years, the Group has grown adjusted earnings
per share at an average of ca. 16% p.a. through a combination of
organic growth and acquisitions. Diploma is a member of the FTSE
250 with a market capitalisation of ca. GBP3.5bn.
Further information on Diploma PLC can be found at
www.diplomaplc.com
LEI: 2138008OGI7VYG8FGR19
HALF YEAR REVIEW TO 31 MARCH 2021
Group overview
Diploma delivered a very strong first half performance with
significant reported revenue growth of 29%. Underlying growth was
2% and growth from acquisitions was 29%, partly offset by a 2%
foreign exchange headwind. Positive trading trends continued across
all Sectors and this momentum has continued into the second half.
Adjusted operating profit increased by 33%, with operating margin
up 60bps to 18.2%.
Underlying revenue growth of 2% over a pre-Covid comparative
period was due to the success of initiatives to drive organic
growth, a return in demand across all Sectors and a positive
contribution from acquisitions. In the Seals Sector, underlying
revenues were down 2% with a strong performance in International
Seals, and the North American Seals business returning to growth by
the end of the period. In the Controls Sector, underlying revenues
declined 1% and benefitted from the impressive performance of WCW
while International Controls continued on its strong recovery
trajectory and returned to growth by the end of the period.
Underlying growth in the Life Sciences Sector was 14% with
approximately half of this due to Simonsen & Weel. The Sector
benefitted from post-Covid restocking, especially of consumables,
as well as strong capital sales maximising opportunities to access
hospitals.
Acquisitions in the period contributed 29% to reported revenue
growth. Our strategy aims to build high quality scalable businesses
that deliver sustainable organic growth. Our two largest
acquisitions in the period, WCW (Controls) and Simonsen & Weel
(Life Sciences), are accretive to the Group's underlying growth and
margins.
Adjusted operating profit increased by 33% to GBP66.6m with
adjusted operating margins improving by 60bps to 18.2%. The margin
improvement reflects the benefits of the restructuring concluded
last year mainly in the Aerospace segments of our Controls Sector,
accretion from acquisitions, and Covid-related expense savings
while travel restrictions continue. We experienced some supply
chain disruption and inflation but were able to manage this
effectively. We expect this pressure to continue, especially as
older inventory unwinds, but we are well placed to navigate this
challenge through supplier negotiations and customer pricing.
Statutory operating profit increased 10% to GBP46.3m.
We have seen very good cash conversion at 72%, demonstrating the
strong cash generative qualities of the business model despite the
increasing revenue profile. Free cash flow has increased in the
period by 57% to GBP34.3m. This has allowed us to deleverage more
quickly than we had expected with net debt now at ca.GBP191m,
putting us in a strong financial position with flexibility to
continue with our acquisition programme. While we remain
financially disciplined, we have an active pipeline of potential
opportunities across all three Sectors.
The Group continues to follow a progressive dividend policy.
After the Covid related deferral of an interim dividend last year,
we have declared an interim dividend of 12.5p per share, reflecting
our confidence in the Group's growth outlook and future prospects.
The dividend will be paid on 16 June 2021 to shareholders on the
register on 28 May 2021.
Current trading and outlook
The Group has delivered a strong first half performance, with
positive momentum across all Sectors and an exceptional
contribution from acquisitions. Underlying growth trends are very
encouraging with revenue in all three Sectors returning to growth
during the period, and this trajectory has continued into the
second half.
We have started the second half very positively. We now upgrade
our full year performance expectations. We expect reported revenues
to be slightly better than 40% ahead of FY2020, with an increase in
the margin towards 19%. This reflects the strong H1, continued
excellent performance from acquisitions, WCW in particular, and
improving underlying trading momentum in our existing business.
Acquisitions remain an integral part of the Group's growth
strategy, and while we will remain disciplined, we have an active
pipeline of opportunities.
The balance sheet is strong and following the better than
expected H1 performance on cash conversion, we now expect net debt
to be less than 1x EBITDA by year end, giving us good flexibility
for future acquisitions.
We remain very optimistic about our trading prospects.
Operating and strategic review
The strong trading performance and strategic progress made in
the first half puts the Group in a good position to take advantage
of the improving macroeconomic environment.
The exceptional response of our colleagues to Covid-19 has
allowed our businesses to adapt to the challenges posed in the last
year while continuing to provide fantastic customer service
throughout the crisis. We continue to support our colleagues as a
priority, including ensuring their physical safety and mental
wellbeing. I am very grateful to all our colleagues for their
continued tenacity and hard work.
Built on the foundations of our value-add distribution model,
our strategy is to develop high-quality, scalable businesses with
organic growth potential. Our Sectors benefit from exciting
structural growth tailwinds across our diverse range of customers
and end segment exposures. We are focused on core, developed
markets and current and adjacent product ranges for our growth. In
order to sustain growth, we seek to continuously improve our core
business model competencies to enable the execution of our
value-add distribution model in our businesses as they scale. This
is supported by pragmatic and incremental investments into our
organisational capabilities - talent, technology and facility.
Delivering Value Responsibly is our ESG programme and is central
to our performance, reputation and the success of our strategy.
During the period, our initiatives gained momentum and intensity,
with a particular focus on establishing a Group-wide approach,
while continuing with local activities within our businesses. Our
efforts are focused on the five priority areas where we believe
Diploma can make the greatest difference:
-- Colleague engagement: our colleagues are critical to our
success. Over the last year, we have not only embraced new ways of
working, but also a greater focus on supporting the physical and
mental wellbeing of our people during these uncertain times,
including through wellbeing workshops. In May, we are completing
engagement surveys across the Group which will support the
continued development of great places to work.
-- Health and safety: while we have an impressive health and
safety track record, there is more to do to develop our health and
safety culture for the future . To this end, we have refreshed our
health and safety policy, which includes updated metrics and
increased reporting, with Group-wide workshops to embed these into
our day-to-day operations.
-- Diversity, equity and inclusion: we have established a
steering group which, together with the data outputs of our
employee engagement survey, will help us focus our initiatives,
policies and KPIs, initially on gender and ethnicity, as we
actively work to create a diverse, equitable and inclusive
environment.
-- Supply chain management: as a distributor, our supply chain
is an area of critical importance and one in which we can have a
significant impact. Our risk-based approach is focused on ensuring
a supply chain that is ethical, resilient and underpins the value
we deliver to our customers. We have defined our supply chain code
of conduct and will be engaging with our critical suppliers to
ensure they are responsibly managing both their environmental
footprint and their employment practices.
-- Environment: our aim is to combine a growing business with a
shrinking environmental footprint. There is work to be done to
define policy, measures and targets in critical areas of impact,
including carbon emissions and waste management. As a distributor,
we have exciting opportunities to supply essential products and
services that support customers in their efforts to reduce
environmental impact, such as products that reduce customer
emissions, or have direct application in renewables industries.
The Group's ESG agenda is closely tied to the Group's growth
strategy, with direct management by the Chief Executive and with
oversight from the Board. We are driving progress in these key
areas of focus, and ensure we have a structured programme to
consistently embed ESG in our business. Our focus during FY2021 is
on defining the scope, measurement and targets in each of our
priority areas. By the end of the year, we intend to have clearly
defined KPIs and targets to be rolled out during FY2022.
Controls
The Controls businesses are suppliers of specialised wiring,
cable, connectors, fasteners and control devices for technically
demanding applications.
Half Year
2021 2020
Revenue GBP152.8m GBP88.2m
Adjusted operating profit GBP28.6m GBP15.8m
Adjusted operating margin 18.7% 17.9%
--------------------------- ---------- -----------
-- International Controls businesses have been diversifying
customers and end segment exposure, returning to growth by the end
of the half
-- Exceptional performance from WCW, with underlying revenue and
margin significantly ahead of expectations
-- Delivered sustainable restructuring savings resulting in margin improvements
Reported revenues of the Controls Sector businesses increased by
73% to GBP152.8m (2020: GBP88.2m), with underlying revenues down
1%, acquisition related growth of 78% and a currency headwind of
4%.
Adjusted operating margins improved by 80bps to 18.7% reflecting
the combined effects of restructuring savings made in the
International Controls businesses, tight operating cost control and
the accretive margin impact from WCW.
International Controls
International Controls continued its recovery trajectory,
growing revenues through diversification of end segments
particularly into industrial, defense and energy markets, but also
emerging sectors such as space and urban air mobility where
research and development spend continues.
The Sector saw a return to underlying growth towards the end of
the first half and is well positioned to benefit from the improved
macroeconomic environment in the second half of the year.
The savings targeted as part of last year's restructuring
activities were delivered, resulting in improved profitability in
the first half and the revenue growth expected in the second half
will deliver further operating leverage benefits.
North American Controls
Acquired in October 2020 for a consideration of ca.GBP348m, WCW
was the Group's largest acquisition to date, and has performed
exceptionally well. High single digit growth was driven by a
combination of a higher copper price and an increased proportion of
high value product (Distributed Antenna Systems - 'DAS'). WCW's
compelling customer service proposition means that pricing power
serves to protect profitability. The business successfully
implemented operational savings in its assembly procedures, reduced
labour costs and waste, and grew profits by ca.55% over the
pre-acquisition comparative as a result.
Life Sciences
The Life Sciences businesses are suppliers of consumables,
instrumentation and related services to the healthcare and
environmental industries.
Half Year
2021 2020
Revenue GBP88.6m GBP72.4m
Adjusted operating profit GBP18.7m GBP14.0m
Adjusted operating margin 21.1% 19.3%
--------------------------- ---------- -----------
-- Very strong underlying revenue growth; capital sales
particularly buoyant with improved access to hospitals and
laboratories
-- Simonson & Weel contributing significantly to underlying
revenue growth with an exceptionally strong performance
-- Strong margin performance due to operating leverage,
contribution from acquisitions and Covid-related savings
Reported revenues of the Life Sciences Sector increased by 22%
to GBP88.6m (2020: GBP72.4m), with underlying revenues up 14%,
acquisition related growth of 5% and a foreign exchange tailwind of
3%.
Adjusted operating margins improved by 180bps to 21.1%
reflecting the combined effects of operating leverage, tight cost
control as travel restrictions continue as well as a positive
impact on margin from Simonsen & Weel.
Healthcare
Both our Canadian and Australian businesses generated strong
underlying revenue growth from capital and consumables sales. The
businesses also benefitted from some customer re-stocking activity
post lockdown as well as a focus on capital sales taking advantage
of access to hospitals.
Approximately half the underlying performance in the healthcare
business reflects the revenue growth contribution from our recent
acquisition, Simonsen & Weel. This high-quality medical
supplies distribution business based in Denmark includes intensive
care unit ('ICU') supplies and has benefitted from Covid-related
demand, specifically ventilators, resulting in exceptionally high
growth rates over last year. While ventilator sales of ca.GBP5m are
not expected to recur, the core Simonsen & Weel business is
performing well.
Environmental
The environmental businesses generated underlying revenue growth
of 5% with both the UK and European businesses contributing broadly
equally to that growth.
Seals
The Seals Sector businesses supply a range of seals, gaskets,
filters, cylinders, components and kits used in heavy mobile
machinery and specialised industrial equipment.
Half Year
2021 2020
----------- -----------
Revenue GBP123.8m GBP123.0m
Adjusted operating profit GBP19.3m GBP20.1m
Adjusted operating margin 15.6% 16.3%
--------------------------- ----------- -----------
-- Improving market demand in core industrial and construction
sectors, with longer term support from increasing US infrastructure
investment
-- Continued strong performance in International Seals with well
diversified customer base and end markets
-- Well positioned for market share gains as US industrial
demand returns with automated AI enabled Aftermarket distribution
facility in Louisville now fully operational
-- New acquisitions in North American MRO and Australia enable
the building of scalable platforms for growth in these markets
Reported revenues of the Seals Sector businesses increased by 1%
to GBP123.8m (2020: 123.0m), with underlying revenues down 2%,
acquisition related growth of 6% and a currency headwind of 3%.
Adjusted operating margins decreased by 70bps to 15.6% primarily
as a result of dual running costs prior to the transition to the
new NA Aftermarket distribution facility in December 2020.
North American Seals
The NA Aftermarket business saw demand returning in both the US
domestic and international segments. The new AI enabled fully
automated distribution facility in Louisville, Kentucky, became
fully operational in mid-December and with its larger geographic
reach can now access a greater share of the US market as industrial
demand returns.
The OEM business has seen a strong return in demand in its
industrial client base following the pandemic and is seeing
positive underlying growth.
Our MRO business, VSP Technologies, is seeing strong recovery in
its underlying trading trends as we enter the second half of the
year. The business is well positioned to make market share gains as
industrial demand returns and the macro-economic factors improve. A
strategic investment to expand the MRO footprint into the northern
US states will support the continued growth and the integration of
the new business and customers into existing operational structures
is going well.
International Seals
International Seals proved to be one of the strongest performing
parts of the Group during the pandemic due to its broad and well
diversified customer base, including exposure to medical OEM, food
and renewable energies. It is well positioned to benefit from the
rebound in industrial demand across its end segments.
The acquisition of FITT Resources, a specialist supplier of
pumps, seals and dewatering equipment in Eastern Australia
complements our existing businesses in Australia both
geographically as well as from a product/customer mix perspective
and will allow us to operate a scalable platform for growth in
Australia.
FINANCE
Income statement
Reported revenues increased by 29% to GBP365.2m (2020:
GBP283.6m) and adjusted operating profit increased by 33% to
GBP66.6m (2020: GBP49.9m). Revenues reflect a 29% contribution from
acquisitions, underlying growth of 2%, partly offset by a currency
headwind of 2%. The Group's adjusted operating margin improved to
18.2% (2020: 17.6%).
Adjusted profit before tax increased 31% to GBP63.2m. There was
an increase in finance costs to GBP3.8m (2020: GBP1.7m),
principally due to increased borrowings used to finance
acquisitions.
Statutory profit before tax increased by only 2% to GBP42.5m
(2020: GBP41.6m) due to higher amortisation of acquisition
intangibles.
The Group's adjusted effective rate of tax on adjusted profit
before tax remained consistent at 24% (2020: 24%).
Adjusted earnings per share increased by 19% to 38.4p, compared
with 32.3p in H1 2020. T his includes the dilutive impact from the
share placing at the end of FY2020.
Free cash flow
Free cash flow represents cash available for acquisitions and
distributions to shareholders. The Group generated free cash flow
of GBP34.3m (2020: GBP21.8m) which includes a GBP5.1m one-off
outflow for a contribution to the Group's defined benefit pension
scheme. The prior half year benefitted from cash proceeds (GBP5.1m)
from asset sales. Therefore, while reported free cash flow
increased by 57%, adjusted free cash flow saw a much larger
improvement.
Operating cash flow increased by GBP12.5m to GBP55.5m (2020:
GBP43.0m) reflecting a stronger adjusted operating profit, partly
offset by a larger investment in working capital and the one-off
pension contribution.
The investment in working capital of GBP14.5m (2020: GBP13.1m)
was GBP1.4m more than in the prior half year. This remains
consistent with historical trends that sees a higher investment in
the first half of the year, which mostly unwinds in the second
half. The increase in receivables (GBP17.7m) and inventory
(GBP1.7m), reflects the impact of the improved trading activity
towards the end of the first half as all Sectors returned to
positive growth.
The Group's metric of working capital to revenue decreased to
16.0% (2020: 17.6%), reflecting the combined impact of a continued
focus on cash collection and an improving revenue profile. This
compares with an average of ca. 16% over the past five years. We
expect to make some targeted investment in inventory during the
second half to help manage supply chain constraints.
Tax payments in the first half of the year decreased by GBP0.6m
to GBP12.5m (2020: GBP13.1m), and the underlying cash tax rate
decreased to 20% (2020: 26%) following the acquisition of WCW and
the benefit of its related goodwill which is deductible for US tax
purposes. The prior half also included two additional quarterly tax
payments in the UK (GBP1.1m) due to legislative changes. The Group
also funded the Company's Employee Benefit Trust with GBP0.6m
(2020: GBP2.5m) in connection with the Company's long term
incentive plan.
Capital expenditure decreased by GBP3.8m against the comparable
period last year to GBP2.6m (2020: GBP6.4m). The prior year
included investments in the new distribution facility in Louisville
(GBP2.2m) and a facility fit out in the Controls Sector
(GBP0.7m).
Acquisition expenditure of GBP399.4m which includes fees,
comprises the spend for WCW (GBP349.1m), which was acquired in
October 2020, as well as further bolt-on acquisitions S&W
(GBP31.9m), FITT Resources (GBP11.7m), PDI (GBP4.2m) and HSP
(GBP2.5m). There was also deferred consideration expenditure of
GBP6.1m, primarily related to VSP.
The Group also paid GBP37.6m (2020: GBP23.4m) in dividends to
ordinary and minority interest shareholders. This payment included
the catch up of the FY2020 interim dividend which had been deferred
in May 2020 due to the uncertainty created by Covid-19 at that
time.
Net bank debt
On 13 October 2020, the Group entered into a new debt facility
agreement ("SFA") which comprises a three-year term loan for an
aggregate principal amount of GBP136.0m ($170.0m) and a committed
multi-currency revolving facility ("RCF") for an aggregate
principal amount of GBP135.0m. The SFA is due to expire in December
2023 and there is an option to extend for a further two 12-month
periods. The facility also has an accordion option to increase the
committed facility by a further GBP50.0m.
At 31 March 2021, the Group's net bank debt stands at GBP191.1m.
The Group continues to maintain a robust balance sheet with net
bank debt comprised of borrowings of GBP216.9m, less cash funds of
GBP25.8m. At 31 March 2021, net bank debt of GBP191.1m represented
1.3X EBITDA against a banking covenant of 3X EBITDA and we expect
this to reduce to less than 1X EBITDA by year end.
At 31 March 2021, the Group ROATCE was 16.5% (2020: 22.0%),
having decreased as a result of the impact of ca.GBP400m of
acquisition spend in the period.
Going concern
The Directors have assessed the relevant factors surrounding
going concern, and in particular the risks for the Group's business
model posed by the Covid-19 pandemic. The Group has carried out an
assessment of its projected trading for the 18-month period through
to the year ending 30 September 2022. This assessment incorporated
a severe but plausible downside scenario which demonstrates that
the Group has sufficient liquidity, resources and covenant headroom
to continue in operation for the foreseeable future. The Directors
confirm there are no material uncertainties which may cast
significant doubt on the Group's ability to continue as a going
concern and these condensed consolidated financial statements have
therefore been prepared on a going concern basis.
Exchange rates
A significant proportion of the Group's revenues (ca. 80%) are
derived from businesses located outside the UK, principally in the
US, Canada, Australia and Northern Europe. Since 30 September 2020,
UK sterling has generally strengthened against the major currencies
in which the Group operates and in particular the US dollar and
Euro. Compared with the first half of last year, the average UK
sterling exchange rate is also stronger against most major
currencies. The impact from translating the results of the Group's
overseas businesses into UK sterling has led to a reduction in
Group revenues and Group adjusted operating profit by ca. GBP5.0m
and ca. GBP0.9m respectively, compared with the same period last
year.
The Group continues with its policy of mitigating transactional
currency exposures across all of the Group's businesses by
purchasing currency hedging contracts to meet up to 80% of its
currency commitments for periods up to 18 months, where it is
considered appropriate.
RISKS AND UNCERTAINTIES
The principal risks and uncertainties which may have the largest
impact on performance in the second half of the year are the same
as those described in detail in pages 27-32 of the 2020 Annual
Report & Accounts. In summary these are:
-- Strategic risks - downturn/instability in major markets,
supplier concentration/loss of key suppliers, customer
concentration/loss of key customers and unsuccessful
acquisitions;
-- Operational risks - Health and safety,
cybersecurity/information technology/business interruption, loss of
key personnel and product liability;
-- Financial risks - foreign currency, transactional and translation; and
-- Accounting risk - inventory obsolescence.
The Directors confirm that the principal risks and uncertainties
and the processes for managing them have not changed since the
publication of the 2020 Annual Report & Accounts and that they
remain relevant for the second half of the financial year.
UPDATED FINANCIAL CALAR FOR 2021
Going forward, the company intends to publish a Q3 Trading
Update in July to be followed by the Full Year results in November.
The Q3 Trading Update in July will replace the Third Quarter
statement usually published in August.
The provisional scheduled dates for the remainder of 2021
are:
-- Q3 Trading Update - 22 July 2021
-- Preliminary Results - 22 November 2021
Johnny Thomson
Chief Executive Officer 17 May 2021
Responsibility Statement of the Directors in respect of the Half
Year Report 2021
We confirm that to the best of our knowledge:
-- the condensed set of consolidated financial statements has
been prepared in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the EU; and
-- the Half Year Report includes a fair review of the information required by:
a) DTR4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of the 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 year; and
b) DTR4.2.8R 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 & Accounts that could do
so.
The Directors of Diploma PLC and their respective
responsibilities are listed in the Annual Report & Accounts for
2020 and on the Company's website at www.diplomaplc.com .
By Order of the Board
JD Thomson B Gibbes
Chief Executive Officer Chief Financial Officer
17 May 2021 17 May 2021
Condensed Consolidated Income Statement
For the six months ended 31 March 2021
Unaudited Unaudited Audited
31 March 31 March 30 Sept
2021 2020 2020
Note GBPm GBPm GBPm
-------------------------------------- -------- ---------- ---------- --------
Revenue 3 365.2 283.6 538.4
Cost of sales (231.3) (180.3) (344.0)
---------------------------------------- ------- ---------- ---------- --------
Gross profit 133.9 103.3 194.4
Distribution costs (10.7) (7.4) (14.0)
Administration costs (76.9) (53.7) (110.6)
Operating profit 3 46.3 42.2 69.8
Net profit on disposal of properties - 1.1 -
Financial expense, net 4 (3.8) (1.7) (3.1)
Profit before tax 42.5 41.6 66.7
Tax expense 5 (10.5) (10.3) (16.9)
---------------------------------------- ------- ---------- ---------- --------
Profit for the period 32.0 31.3 49.8
---------------------------------------- ------- ---------- ---------- --------
Attributable to:
Shareholders of the Company 31.7 31.1 49.3
Minority interests 0.3 0.2 0.5
---------------------------------------- ------- ---------- ---------- --------
32.0 31.3 49.8
-------------------------------------- ------- ---------- ---------- --------
Earnings per share
Basic earnings 6 25.5p 27.4p 43.5p
Diluted earnings 25.4p 27.3p 43.5p
---------------------------------------- ------- ---------- ---------- --------
Alternative Performance Measures 31 March 31 March 30 Sept
(note 2) 2021 2020 2020
Note GBPm GBPm GBPm
---------------------------------- ---------- --------- --------- --------
Operating profit 46.3 42.2 69.8
Add: Acquisition related charges 9 20.3 7.7 17.3
Adjusted operating profit 3 66.6 49.9 87.1
Deduct: Interest expense 4 (3.4) (1.5) (2.7)
----------------------------------- ---- ---- --------- --------- --------
Adjusted profit before tax 63.2 48.4 84.4
----------------------------------- ---- ---- --------- --------- --------
Adjusted earnings per share 6 38.4p 32.3p 56.4p
----------------------------------- ---- ---- --------- --------- --------
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2021
Unaudited Unaudited Audited
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
---------------------------------------------------- ---------------- ---------- ---------
Profit for the period 32.0 31.3 49.8
----------------------------------------------------- ---------------- ---------- ---------
Items that will not be reclassified
to the Consolidated Income Statement
Actuarial losses in the defined benefit
pension scheme - - (0.4)
Deferred tax on items that will not
be reclassified - - 0.4
----------------------------------------------------- ---------------- ---------- ---------
- - -
----------------------------------------------------- ---------------- ---------- ---------
Items that may be reclassified to the Consolidated
Income Statement
Exchange rate (losses)/gains on foreign
currency net investments (24.8) (8.1) (7.6)
(Losses)/gains on fair value of cash
flow hedges (1.3) 1.7 (0.1)
Net changes to fair value of cash flow
hedges transferred to the Consolidated
Income Statement - - (0.4)
Deferred tax on items that may be reclassified 0.5 (0.5) 0.1
------------------------------------------------------ ---------------- ---------- ---------
(25.6) (6.9) (8.0)
---------------------------------------------------- ---------------- ---------- ---------
Total Comprehensive Income for the period 6.4 24.4 41.8
----------------------------------------------------- ---------------- ---------- ---------
Attributable to:
Shareholders of the Company 6.4 24.2 41.2
Minority interests - 0.2 0.6
------------------------------------------------------ ---------------- ---------- ---------
6.4 24.4 41.8
---------------------------------------------------- ---------------- ---------- ---------
Condensed Consolidated Statement of C hanges in Equity
For the six months ended 31 March 2021
Share
Share Share Transl. Hedging Retained -holders' Minority Total
capital premium reserve reserve earnings equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------- -------- -------------- ------------------ ------------- --------- --------- ------------ ------------
At 1 October
2019 (audited) 5.7 - 36.0 0.2 279.4 321.3 3.3 324.6
Total
comprehensive
income - - (8.1) 1.2 31.1 24.2 0.2 24.4
Share-based
payments - - - - 0.4 0.4 - 0.4
Tax on items
recognised
directly in
equity - - - - - - - -
Purchase of own
shares - - - - (2.5) (2.5) - (2.5)
Dividends - - - - (23.2) (23.2) (0.2) (23.4)
--------------- -------- -------------- ------------------ ------------- --------- --------- ------------ ------------
At 31 March
2020
(unaudited) 5.7 - 27.9 1.4 285.2 320.2 3.3 323.5
Total
comprehensive
income - - 0.4 (1.7) 18.3 17.0 0.4 17.4
Issue of share
capital 0.6 188.6 - - - 189.2 - 189.2
Share-based
payments - - - - 0.4 0.4 - 0.4
Tax on items
recognised
directly in
equity - - - - 0.2 0.2 - 0.2
Notional -
purchase of
own shares - - - - - - -
Dividends - - - - - - - -
-------------- -------- -------------- ------------------ ------------- --------- --------- ------------ ------------
At 30 September
2020
(audited) 6.3 188.6 28.3 (0.3) 304.1 527.0 3.7 530.7
Total
comprehensive
income - - (24.5) (0.8) 31.7 6.4 - 6.4
Share-based
payments - - - - 0.7 0.7 - 0.7
Tax on items
recognised
directly in
equity - - - - - - - -
Purchase of own
shares - - - - (0.6) (0.6) - (0.6)
Minority
interest
issued - - - - - - 0.7 0.7
Dividends - - - - (37.3) (37.3) (0.3) (37.6)
At 31 March
2021
(unaudited) 6.3 188.6 3.8 (1.1) 298.6 496.2 4.1 500.3
--------------- -------- -------------- ------------------ ------------- --------- --------- ------------ ------------
Condensed Consolidated Statement of Financial Position
As at 31 March 2021
Unaudited Unaudited Audited
31 March 31 March 30 Sept
2021 2020 2020
Note GBPm GBPm GBPm
--------------------------------------- ------ ---------- ---------------- ---------
Non-current assets
Goodwill 9 243.5 159.1 159.0
Acquisition intangible assets 9 320.9 95.5 87.2
Other intangible assets 3.2 2.9 3.0
Property, plant and equipment 44.1 28.2 27.9
Leases - right of use of assets 11 42.0 33.0 31.6
Deferred tax assets 0.7 0.5 0.7
----------------------------------------- ----- ---------- ---------------- ---------
654.4 319.2 309.4
--------------------------------------- ----- ---------- ---------------- ---------
Current assets
Inventories 121.1 108.0 100.6
Trade and other receivables 115.0 98.8 77.8
Cash and cash equivalents 8 25.8 25.9 206.8
----------------------------------------- ----- ---------- ---------------- ---------
2 61.
9 232.7 385.2
--------------------------------------- ----- ---------- ---------------- ---------
Current liabilities
Trade and other payables (109.1) (88.5) (87.1)
Current tax liabilities (4.4) (4.5) (4.7)
Other liabilities 12 (10.6) (15.5) (11.5)
Lease liabilities 11 (9.9) (6.3) (7.2)
Borrowings 8 (14.9) - -
(148.9) (114.8) (110.5)
--------------------------------------- ----- ---------- ---------------- ---------
Net current assets 113.0 117.9 274.7
----------------------------------------- ----- ---------- ---------------- ---------
Total assets less current liabilities 767.4 437.1 584.1
Non -current liabilities
Retirement benefit obligations ( 12.5) (17.9) (18.3)
Borrowings 8 (202.0) (55.8) -
Lease liabilities 11 (35.0) (28.3) (26.5)
Other liabilities 12 (0.7) (0.6) -
Deferred tax liabilities (16.9) (11.0) (8.6)
----------------------------------------- ----- ---------- ---------------- ---------
Net assets 500.3 323.5 530.7
----------------------------------------- ----- ---------- ---------------- ---------
Equity
Share capital 6.3 5.7 6.3
Share premium 188.6 - 188.6
Translation reserve 3.8 27.9 28.3
Hedging reserve (1.1) 1.4 (0.3)
Retained earnings 298.6 285.2 304.1
----------------------------------------- ----- ---------- ---------------- ---------
Total shareholders' equity 496.2 320.2 527.0
Minority interests 4.1 3.3 3.7
----------------------------------------- ----- ---------- ---------------- ---------
Total equity 500.3 323.5 530.7
----------------------------------------- ----- ---------- ---------------- ---------
Condensed Consolidated Cash Flow Statement
For the six months ended 31 March 2021
Unaudited Unaudited Audited
31 March 31 March 30 Sept
2021 2020 2020
Note GBPm GBPm GBPm
---------------------------------------------- -------------- ---------------- ---------
Cash flow from operating activities 7 55.5 43.0 108.4
Interest paid, net (2.3) (0.7) (1.5)
Tax paid (12.5) (13.1) (21.5)
----------------------------------------- ---- -------------- ---------------- ---------
Net cash from operating activities 40.7 29.2 85.4
----------------------------------------- ---- -------------- ---------------- ---------
Cash flow from investing activities
Acquisition of businesses (net of
cash acquired) (397.3) (13.6) (13.8)
Deferred consideration paid 12 (6.1) - (1.1)
Proceeds from sale of property and
investment - 5.1 0.8
Purchase of property, plant and
equipment (2.0) (6.4) (8.4)
Purchase of other intangible assets (0.6) - (1.0)
Proceeds from sale of property,
plant and equipment 0.2 - 5.8
Net cash used in investing activities (405.8) (14.9) (17.7)
----------------------------------------- ---- -------------- ---------------- ---------
Cash flow from financing activities
Proceeds from issue of share capital
(net of fees) (0.6) - 189.8
Dividends paid to shareholders 13 (37.3) (23.2) (23.2)
Dividends paid to minority interests (0.3) (0.2) (0.2)
Proceeds from minority interests 0.7 - -
Lease repayments 11 (5.5) (3.6) (7.6)
Purchase of own shares by Employee
Benefit Trust - (2.0) (1.8)
Notional purchase of own shares
on exercise of options (0.6) (0.5) (0.7)
Proceeds from borrowings 8 226.0 14.0 -
Repayment of borrowings 8 (6.3) - (42.1)
Net cash from/(used in) financing
activities 176.1 (15.5) 114.2
----------------------------------------- ---- -------------- ---------------- ---------
Net (decrease)/increase in cash
and cash equivalents 8 (189.0) (1.2) 181.9
Cash and cash equivalents at beginning
of period 206.8 27.0 27.0
Effect of exchange rates on cash
and cash equivalents 8.0 0.1 (2.1)
----------------------------------------- ---- -------------- ---------------- ---------
Cash and cash equivalents at end of
period 25.8 25.9 206.8
----------------------------------------------- -------------- ---------------- ---------
Alternative Performance Measures (note 31 March 31 March 30 Sept
2) 2021 2020 2020
GBPm GBPm GBPm
----------------------------------- ------------------------------------ --------- ---------------- --------
Net (decrease) /increase in cash
and cash equivalents (189.0) (1.2) 181.9
Dividends paid to shareholders
Add: and minority interests 37.6 23.4 23.4
Proceeds from minority interests (0.7) - -
Acquisition of businesses (including
expenses) 399.4 13.6 13.8
Deferred consideration paid 6.1 - 1.1
Proceeds from issue of share
capital (net of fees) 0.6 - (189.8)
(Proceeds from)/repayment of
bank borrowings, net (219.7) (14.0) 42.1
-------------------------------------- --------- ---------------- --------
Free cash flow 34.3 21.8 72.5
--------------------------------------------------------------------------- --------- ---------------- --------
Cash and cash equivalents 25.8 25.9 206.8
Bank borrowings (216.9) (55.8) -
--------------------------------------------------------------------------- --------- ---------------- --------
(Net bank debt)/cash funds (191.1) (29.9) 206.8
--------------------------------------------------------------------------- --------- ---------------- --------
Notes to the Condensed Consolidated Financial Statements
For the six months ended 31 March 2021
1. BASIS OF PREPARATION AND PRINCIPAL ACCOUNTING POLICIES
Diploma PLC (the "Company") is a public limited company
registered and domiciled in England and Wales. The condensed set of
consolidated financial statements (the "financial statements") for
the six months ended 31 March 2021 comprise the Company and its
subsidiaries (together referred to as "the Group").
The condensed information presented for the financial year ended
30 September 2020 does not constitute full statutory accounts as
defined in section 434 of the Companies Act 2006. Those statutory
accounts have been reported on by the Company's auditor and
delivered to the Registrar of Companies. The report of the auditor
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 figures for the six months ended 31 March 2020 were extracted
from the 2020 Half Year Report, which was unaudited.
The Group's audited consolidated financial statements for the
year ended 30 September 2020 are available on the Company's website
( www.diplomaplc.com ) or upon request from the Company's
registered office at Diploma PLC, 12 Charterhouse Square, London,
EC1M 6AX.
1.1 Statement of compliance
The financial statements included in this Half Year Announcement
for the six months ended 31 March 2021 have been prepared on a
going concern basis and in accordance with IAS 34, Interim
Financial Reporting as adopted by the European Union and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority. The financial statements do not include all of the
information required for full annual consolidated financial
statements and should be read in conjunction with the Group's
audited consolidated financial statements for the year ended 30
September 2020.
The Half Year financial statements were approved by the Board of
Directors on 17 May 2021; they have not been audited by the
Company's auditor.
1.2 Significant accounting policies
The accounting policies applied by the Group in this set of
financial statements are the same as those applied by the Group in
its audited consolidated financial statements for the year ended 30
September 2020, except for the amount included in the Half Year
Report in respect of taxation.
As in previous Half Year Announcements, taxation has been
calculated by applying the Directors' best estimate of the annual
rates of taxation to taxable profits for the period. In the audited
consolidated financial statements for the full year, the taxation
balances are based on draft tax computations prepared for each
business within the Group.
1.3 Risk management
The Group's overall management of financial risks is carried out
by a central team under policies and procedures which are reviewed
by the Board. The financial risks to which the Group is exposed are
those of credit, liquidity, foreign currency, interest rate and
capital management. An explanation of each of these risks and how
the Group manages them is included in the Annual Report &
Accounts for year ended 30 September 2020. Further explanation of
the Group's principal risks and uncertainties and Going Concern are
set out in the narrative of this Half Year Report.
There is no material difference between the book value and fair
value of the Group's financial assets and financial liabilities as
at 31 March 2021. The basis for determining the fair value is as
follows:
- Derivatives: Forward contracts are designated as level 2
assets (in the fair value hierarchy) and valued at 31 March forward
rates with the gains and losses taken to equity. The fair value of
the forward contracts as at 31 March 2021 amounts to a GBP1.3m
liability (2020: GBP2.1m asset).
- Trade and other receivables: As the majority of the trade and
other receivables have a remaining life of less than 12 months, the
book value is deemed to be reflective of the fair value.
- Lease and other liabilities: The carrying amount represents
the discounted value of the expected liability which is deemed to
reflect the fair value.
1.4 Estimates and judgements
The preparation of these 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 expense. Actual
results may differ from these estimates.
The accounting estimates and judgements made by management in
applying the Group's accounting policies that have the most
significant effect on the amounts included within these
consolidated financial statements, were the same as those that
applied to the Group's audited consolidated financial statements
for the year ended 30 September 2020 as set out on page 97 of the
2020 Annual Report & Accounts, except for the additional
estimates and judgements required in these financial statements in
respect of acquisition accounting, as explained below.
When the Group makes an acquisition it recognises the
identifiable assets and liabilities, including intangible assets,
at fair value with the difference between the fair value of net
assets acquired and the fair value of consideration paid comprising
goodwill. The key assumptions and estimates used to determine the
valuation of intangible assets acquired are the forecast cash
flows, the discount rate and customer/supplier attrition. Customer
and supplier relationships are valued using an excess earnings cash
flow model. Acquisitions often comprise an element of deferred
consideration and may include a minority interest, which are
subject to put options. These put options are valued at fair value
at the date of acquisition. Deferred consideration is fair valued
based on the Directors' estimate of future performance of the
acquired entity.
The Group's growth strategy is underpinned by the successful
execution of acquisitions. This results in material amounts of
goodwill and intangible assets (principally customer and supplier
relationships) being recognised in the Consolidated Statement of
Financial Position. Goodwill is tested annually to determine if
there is any indication of impairment. Assumptions are then used to
determine the recoverable amount of each CGU, principally based on
the present value of estimated future cash flows to derive the
"value in use" to the Group of the capitalised goodwill.
2. ALTERNATIVE PERFORMANCE MEASURES
The Group uses a number of alternative (non-Generally Accepted
Accounting Practice ("non-GAAP")) financial measures which are not
defined within IFRS. The Directors use these measures for internal
management reporting of key performance indicators ("KPIs") in
order to assess the operational performance of the Group on a
comparable basis against the Group's KPIs, as a key constituent of
the Group's planning process, as well as comprising targets against
which compensation is determined. As such these measures should be
considered alongside the IFRS measures. The following non-GAAP
measures are referred to in this Half Year Announcement:
2.1 Adjusted operating profit
At the foot of the Consolidated Income Statement, "adjusted
operating profit" is defined as operating profit before
amortisation and impairment of acquisition intangible assets,
acquisition expenses and adjustments to deferred consideration
(collectively, "acquisition related charges"), the costs of a
material restructuring or rationalisation of operations and the
profit or loss relating to the sale of businesses. The Directors
believe that adjusted operating profit is an important measure of
the operational performance of the Group. Adjusted operating margin
is the Group's adjusted operating profit divided by the Group's
revenue.
2.2 Adjusted profit before tax
At the foot of the Consolidated Income Statement, "adjusted
profit before tax" is separately disclosed, being defined as
adjusted operating profit, after finance expenses (but before fair
value remeasurements in respect of acquisition related payments)
and before tax. The Directors believe that adjusted profit before
tax is an important measure of the operational performance of the
Group.
2.3 Adjusted earnings per share
"Adjusted earnings per share" ("adjusted EPS") is calculated as
the total of adjusted profit before tax, less income tax costs, but
including the tax impact on the items included in the calculation
of adjusted profit, less profit attributable to minority interests,
divided by the weighted average number of ordinary shares in issue
during the year. The Directors believe that adjusted EPS provides
an important measure of the earnings capacity of the Group.
2.4 Free cash flow
At the foot of the Consolidated Cash Flow Statement, "free cash
flow" is reported, being defined as net cash flow from operating
activities, after net capital expenditure on tangible and
intangible assets, and including proceeds received from business
disposals, but before expenditure on business
combinations/investments, borrowings received to fund acquisitions
and dividends paid to both minority shareholders and the Company's
shareholders. The Directors believe that free cash flow gives an
important measure of the cash flow of the Group, available for
future investment or distribution to shareholders. Cash conversion
is defined as free cash flow over adjusted earnings as presented in
note 6.
3. BUSINESS SECTOR ANALYSIS
The Chief Operating Decision Maker ("CODM") for the purposes of
IFRS 8 is the Chief Executive Officer. The financial performance of
the Sectors is reported to the CODM on a monthly basis and this
information is used to allocate resources on an appropriate
basis.
Sector information is presented in this Half Year Announcement
in respect of the Group's business Sectors, which is the primary
basis of Sector reporting. The business Sector reporting format
reflects the Group's management and internal reporting structure.
The geographic sector reporting represents results by origin. The
Group's financial results have not, historically, been subject to
significant seasonal trends. In the year ended 30 September 2020,
the Group earned 52.7% of its annual revenues and 57.3% of its
annual adjusted operating profits in the first six months of the
year.
Sector revenue represents revenue from external customers; there
is no inter-Sector revenue. Sector results, assets and liabilities
include items directly attributable to a Sector, as well as those
that can be allocated on a reasonable basis.
Adjusted operating
Revenue profit Operating profit
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2021 2020 2020 2021 2020 2020 2021 2020 2020
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------- ------- -------- ------- ------- -------- ------- ------- --------
By Sector
Life Sciences 88.6 72.4 139.7 18.7 14.0 28.3 16.7 12.9 25.9
Seals 123.8 123.0 242.1 19.3 20.1 36.0 14.8 15.5 26.9
Controls 152.8 88.2 156.6 28.6 15.8 22.8 14.8 13.8 17.0
365.2 283.6 538.4 66.6 49.9 87.1 46.3 42.2 69.8
-------------------- ------- ------- -------- ------- ------- -------- ------- ------- --------
By Geographic Area
United Kingdom 67.1 76.2 134.0 10.8 13.9 19.0
Rest of Europe 79.7 63.2 126.8 14.2 9.0 17.7
North America 187.7 122.2 228.5 36.7 23.9 43.3
Rest of World 30.7 22.0 49.1 4.9 3.1 7.1
-------------------- ------- ------- -------- ------- ------- --------
365.2 283.6 538.4 66.6 49.9 87.1
-------------------- ------- ------- -------- ------- ------- --------
Total assets Total liabilities Net assets
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2021 2020 2020 2021 2020 2020 2021 2020 2020
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ------- ------- -------- -------- -------- -------- -------- -------- --------
By Sector
Life Sciences 169.1 122.4 121.9 (32.5) (29.9) (27.6) 136.6 92.5 94.3
Seals 251.9 260.2 237.5 (57.4) (57.6) (52.5) 194.5 202.6 185.0
Controls 471.1 138.1 123.9 (56.6) (35.3) (31.8) 414.5 102.8 92.1
Unallocated
assets/(liabilities) 24.2 31.2 211.3 (269.5) (105.6) (52.0) (245.3) (74.4) 159.3
---------------------------- ------- ------- -------- -------- -------- -------- -------- -------- --------
916.3 551.9 694.6 (416.0) (228.4) (163.9) 500.3 323.5 530.7
---------------------------- ------- ------- -------- -------- -------- -------- -------- -------- --------
In the six months ended 31 March 2021, the Group acquired WCW,
S&W, FITT Resources, PDI, and HSP. These businesses contributed
GBP85.4m to revenue and GBP17.7m to adjusted operating profit
(GBP4.5m to statutory operating profit), after the allocation of
head office costs. See note 10 for the individual contributions
from each of the acquired businesses. The results of WCW and HSP
are included within the Controls Sector and reported within the
geographic areas of North America and the Rest of Europe,
respectively. The results of S&W are included within the Life
Sciences Sector and reported within the geographic area of the Rest
of Europe. The results of FITT Resources and PDI are included
within the Seals Sector and reported within the geographic areas of
the Rest of World and North America, respectively. Sector assets
exclude cash and cash equivalents, deferred tax assets and
corporate assets that cannot be allocated on a reasonable basis to
a business Sector. Sector liabilities exclude bank borrowings,
retirement benefit obligations, deferred tax liabilities,
acquisition liabilities and corporate liabilities that cannot be
allocated on a reasonable basis to a business Sector. These items
that cannot be allocated on a reasonable basis to a business Sector
are shown collectively as "unallocated assets/(liabilities)".
Capital expenditure Depreciation
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2021 2020 2020 2021 2020 2020
GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ------- ------- -------- ------- ------- --------
By Sector
Life Sciences 0.9 1.9 2.9 1.2 1.3 2.6
Seals 1.4 3.6 5.2 1.4 1.1 2.1
Controls 0.3 0.9 1.3 2.1 0.3 0.7
--------------- ------- ------- -------- ------- ------- --------
2.6 6.4 9.4 4.7 2.7 5.4
--------------- ------- ------- -------- ------- ------- --------
A further GBP5.4m of depreciation was incurred on Leases - right
of use assets (note 11).
4. FINANCIAL EXPENSE, NET
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
--------------------------------------------------------- ---------- --------- --------
Interest (expense)/income and similar
charges
* bank facility and commitment fees (0.3) - (0.2)
* interest income on bank deposits - - 0.1
* interest expense on bank borrowings (2.0) (0.7) (0.9)
* notional interest expense on the defined benefit
pension scheme (0.2) (0.1) (0.3)
* interest on lease liabilities (0.9) (0.7) (1.4)
Net interest expense and similar charges (3.4) (1.5) (2.7)
* acquisition related finance charges (0.4) (0.2) (0.4)
--------------------------------------------------------- ---------- --------- --------
Financial expense, net (3.8) (1.7) (3.1)
--------------------------------------------------------- ---------- --------- --------
Acquisition related finance charges includes fair value
remeasurements of put options for future minority purchases, unwind
of discount on acquisition liabilities, and the amortisation of
capitalised borrowing fees on acquisition related borrowings.
Further detail on the interest charged on lease liabilities is
included in note 11.
5. TAXATION
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
------------------------------------ --------- --------- --------
UK corporation tax 1.0 2.6 2.5
Overseas tax 9.5 7.7 14.4
Total tax on profit for the period 10.5 10.3 16.9
------------------------------------ --------- --------- --------
Taxation on profits before tax has been calculated by applying
the Directors' best estimate of the annual rates of taxation to
taxable profits for the period. The effective rate of taxation on
profit before tax for the period decreased to 24.7% (2020: 24.8%)
and the Group's adjusted effective rate of tax on adjusted profit
before tax remained consistent at 24.0% (2020: 24.0%).
6. EARNINGS PER SHARE
Basic earnings per share
Basic earnings per ordinary 5p share are calculated on the basis
of the weighted average number of ordinary shares in issue during
the period of 124,463,520 (2020: 113,177,419) and the profit for
the period attributable to shareholders of GBP31.7m (2020:
GBP31.1m).
Adjusted earnings per share
Adjusted earnings per share, defined in note 2, is calculated as
follows:
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2021 2020 2020 2021 2020 2020
pence pence pence
per share per per
share share GBPm GBPm GBPm
-------------------------------------- ----------- ------- -------- ------- -------- --------
Profit before tax 42.5 41.6 66.7
Tax expense (10.5) (10.3) (16.9)
Minority interests (0.3) (0.2) (0.5)
-------------------------------------- ----------- ------- -------- ------- -------- --------
Earnings for the period attributable
to
shareholders of the Company 25.5 27.4 43.5 31.7 31.1 49.3
Acquisition related charges 16.3 6.8 15.2 20.3 7.7 17.3
Acquisition related finance
charges 0.3 0.2 0.3 0.4 0.2 0.4
Net profit on disposal of
properties - (1.0) - - (1.1) -
Tax effect on above adjustments (3.7) (1.1) (2.6) (4.7) (1.3) (3.0)
Adjusted earnings 38.4 32.3 56.4 47.7 36.6 64.0
-------------------------------------- ----------- ------- -------- ------- -------- --------
7. RECONCILIATION OF OPERATING PROFIT TO CASH FLOW FROM OPERATING ACTIVITIES
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
---------------------------------------------------- ------------ --------- --------
Operating profit 46.3 42.2 69.8
Acquisition related charges (note 9) 20.3 7.7 17.3
Adjusted operating profit 66.6 49.9 87.1
Depreciation/amortisation of tangible, other
intangible assets and right of use assets 10.1 6.0 12.7
Share-based payments expense 0.7 0.4 0.8
Defined benefit scheme expense (5.3) (0.2) (0.2)
Profit on disposal of assets - - (1.0)
Acquisition expenses paid (2.1) - -
Other non-cash movements - - (0.5)
---------------------------------------------------- ------------ --------- --------
Non-cash items and other 3.4 6.2 11.8
---------------------------------------------------- ------------ --------- --------
(Increase)/decrease in inventories (1.7) (5.4) 1.6
(Increase)/decrease in trade and other receivables (17.7) (6.8) 10.3
Increase/(decrease) in trade and other payables 4.9 (0.9) (2.4)
---------------------------------------------------- ------------ --------- --------
(Increase)/decrease in working capital (14.5) (13.1) 9.5
---------------------------------------------------- ------------ --------- --------
Cash flow from operating activities 55.5 43.0 108.4
---------------------------------------------------- ------------ --------- --------
8. (NET BANK DEBT)/CASH FUNDS
The movement in (net bank debt)/cash funds during the period is
as follows:
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
----------------------------------------- ---- ----------- --- --------- --- --------
Net (decrease)/increase in cash (189.0) (1.2) 181.9
and cash equivalents
(Increase)/decrease in bank borrowings (219.7) (14.0) 42.1
----------------------------------------- ---- ----------- --- --------- --- --------
(408.7) (15.2) 224.0
Effect of exchange rates 10.8 0.4 (2.1)
Non-cash movements - - -
Movement in (net bank debt)/cash
funds (397.9) (14.8) 221.9
Cash funds/(net bank debt) at
beginning of period 206.8 (15.1) (15.1)
----------------------------------------------- ----------- --- --------- --- --------
(Net bank debt)/cash funds at
end of period (191.1) (29.9) 206.8
----------------------------------------------- ----------- --- --------- --- --------
Comprising:
Cash and cash equivalents 25.8 25.9 206.8
Bank borrowings:
(101.7) (20.0) -
* Revolving credit facility (118.1) (35.8) -
2.9 - -
* Term loan (216.9) (55.8) -
* Capitalised debt fees
----------------------------------------------- ----------- --- --------- --- --------
(Net bank debt)/cash funds at
end of period (191.1) (29.9) 206.8
----------------------------------------------- ----------- --- --------- --- --------
Analysed as: GBPm GBPm GBPm
Repayable within one year 14.9 - -
Repayable after one year 202.0 55.8 -
----------------------------------------------- ----------- --- --------- --- --------
On 13 October 2020, the Group entered into a new debt facility
agreement ("SFA") which comprises a three-year term loan for an
aggregate principal amount of GBP136.0m ($170.0m) and a committed
multi-currency revolving facility ("RCF") for an aggregate
principal amount of GBP135.0m. The SFA is due to expire in December
2023 and there is an option to extend for a further two 12-month
periods. The facility also has an accordion option to increase the
committed facility by a further GBP50.0m. Interest on the facility
and term loan is payable between 125-275bps above LIBOR, depending
on the ratio of net debt to EBITDA.
At 31 March 2020, the Group had utilised GBP101.7m of the RCF
(2020: GBP20.0m of expired RCF), comprising GBP28.3m ($39.1m) of US
dollars, GBP28.1m (EUR32.9m) of Euros and GBP45.3m of sterling.
Total debt is GBP236.0m (2020: GBP64.5m) comprising net bank
debt of GBP191.1m (2020: GBP29.9m) and lease liabilities of
GBP44.9m (2020: GBP34.6m). Bank covenants are tested against net
bank debt only.
9. GOODWILL AND ACQUISITION INTANGIBLE ASSETS
Acquisition
intangible
Goodwill assets
GBPm GBPm
---------------------- ----------- ------------
At 1 October 2019 155.0 96.1
Acquisitions 8.8 8.3
Amortisation charge - (7.5)
Exchange adjustments (4.7) (1.4)
At 31 March 2020 159.1 95.5
Acquisitions (2.5) (0.7)
Amortisation charge - (7.9)
Exchange adjustments 2.4 0.3
---------------------- ----------- ------------
At 30 September 2020 159.0 87.2
Acquisitions 94.8 269.7
Amortisation charge - (15.8)
Exchange adjustments (10.3) (20.2)
At 31 March 2021 243.5 320.9
---------------------- ----------- ------------
Goodwill represents the amount paid for future sales growth from
both new customers and new products, operating cost synergies and
employee know-how. The acquisition intangible assets primarily
relate to supplier relationships, customer relationships, brands
and patents and these assets will be amortised over five to fifteen
years.
Acquisition related charges of GBP20.3m (2020: GBP7.7m) are
charged to the Consolidated Income Statement. These charges
comprise GBP15.8m (2020: GBP7.5m) of amortisation of acquisition
intangible assets and GBP4.5m (2020: GBP0.2m) of acquisition
expenses.
10. ACQUISITION OF SUBSIDIARIES
Acquisition of Windy City Wire Cable & Technology Products
LLC
On 16 October 2020, the Group acquired 100% of SEP III Wire
& Holdings, LLC, the holding company of Windy City Wire Cable
& Technology Products LLC ("WCW"), a leading value-add
distributor of premium quality, low voltage wire and cable in the
US. The consideration was GBP347.7m ($449.6m), net of cash acquired
of GBP0.9m ($1.1m).
The acquisition was funded partly by an equity placing announced
on 22 September 2020 (gross proceeds of GBP193.7m offset by related
transaction costs of GBP4.5m) with the remaining balance being
funded through a new committed debt facility. On 13 October 2020,
the Group entered into a new debt facility agreement ("SFA") which
comprises a three-year term loan for an aggregate principal amount
of GBP136.0m ($170.0m) and a committed multi-currency revolving
facility ("RCF") for an aggregate principal amount of GBP135.0m.
The term loan was fully drawn and RCF partly drawn to assist with
the acquisition of WCW. Debt arrangement fees of GBP3.7m have been
capitalised and are being amortised over the expected term of the
loans.
Acquisition expenses of GBP5.1m have been recognised in respect
of the transaction across FY2020 and HY2021 and are included within
administration costs and GBP0.3m of acquisition related finance
charges have been included within financial expense relating to the
amortisation of debt arrangement fees mentioned above.
The provisional fair value of WCW's net assets acquired
excluding acquisition intangibles, related deferred tax, and cash
is GBP45.0m following fair value adjustments of GBP3.2m. The
principal fair value adjustments relate to fixed assets (GBP1.2m
reduction in the book value) and an increase in the provisions held
against inventory (GBP0.8m) and trade receivables (GBP0.7m).
Acquisition of Simonsen & Weel A/S
On 31 December 2020, the Group acquired 100% of Simonsen and
Weel A/S ("S&W"), a distributor of clinical nutrition products
and medically supervised compression garments, as well as specialty
medical devices for operating rooms and intensive care units, based
in Denmark, for initial consideration of GBP31.5m (DKK 259.0m), net
of cash acquired of GBP1.3m (DKK 11.0m). Deferred contingent
consideration of up to GBP3.6m (DKK 30.0m) is payable based on the
performance of S&W in the 12 months following the acquisition
and has been recognised in full.
Acquisition expenses of GBP0.4m have been incurred in the period
and are included within administration costs.
The provisional fair value of S&W's net assets acquired
excluding acquisition intangibles, related deferred tax, and cash
is GBP0.2m following fair value adjustments of GBP0.2m primarily
relating to an increased provision against inventory.
Acquisition of FITT Management Pty Limited
On 15 January 2021, the Group acquired 100% of FITT Management
Pty Limited ("FITT Resources"), a market-leading distributor of
pumps and fluid sealing products and a full-service provider of
mechanical seals and mechanical packing for rotating and static
equipment, based in New South Wales, for initial consideration of
GBP11.5m (A$20.4m), net of debt acquired of GBP0.1m (A$0.1m).
Deferred contingent consideration of up to GBP1.7m (A$3.0m) is
payable based on the performance of FITT Resources in the 12 months
following acquisition and has been recognised. Acquisition expenses
of GBP0.2m have been recognised in the period and are included
within administration costs.
The provisional fair value of FITT Resources' net assets
acquired excluding acquisition intangibles, related deferred tax,
and cash is GBP3.2m following fair value adjustments of GBP0.5m.
The provisions held against inventory and trade receivables were
increased by GBP0.4m and GBP0.1m, respectively.
Acquisition of Power Dynamics Gasket Company, Inc.
On 22 December 2020, the Group acquired the trade and assets of
Power Dynamics Gasket Company, Inc. ("PDI"), a leading supplier of
fluid sealing products and services including mechanical seals,
braided packing and gasketing materials, based in Minneapolis,
Minnesota for initial consideration of GBP4.1m ($5.5m). Deferred
contingent consideration of GBP0.8m (US$1.0m) is payable 18 months
after the completion date. Acquisition expenses of GBP0.1m have
been recognised in the period and are included within
administration costs.
The provisional fair value of PDI's net assets acquired
excluding acquisition intangibles, related deferred tax, and cash
is GBP0.4m following fair value adjustments of GBP0.1m to increase
the provision held against trade receivables.
Acquisition of HSP GmbH
On 2 October 2020, the Group acquired the trade and assets of
HSP GmbH ("HSP"), a small cable business based in Germany for
consideration of GBP2.5m (EUR2.9m).
The following table summarises the consideration paid for the
acquisitions completed in the period and fair value of assets
acquired and liabilities assumed, with values being provisional
pending completion of final valuation. The provisional fair value
of trade and other receivables reflects management's best estimate
of the contractual cash flows expected to be collected.
WCW S&W Others Total
Book Fair Book Fair Book Fair Book Fair
value value value value value value value value
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------- -------- ------- ------- ------- ------- -------- --------
Acquisition intangible
assets(1) - 233.1 - 25.3 - 11.3 - 269.7
Deferred tax - (2.6) - (5.7) - (2.1) - (10.4)
Property, plant and
equipment 21.0 19.8 0.3 0.3 1.9 1.9 23.2 22.0
Inventories 19.3 18.5 2.7 2.4 3.7 3.3 25.7 24.2
Trade and other receivables 18.9 18.2 4.2 4.1 2.9 2.8 26.0 25.1
Trade and other payables (11.0) (11.5) (6.8) (6.6) (3.8) (3.9) (21.6) (22.0)
Net assets acquired 48.2 275.5 0.4 19.8 4.7 13.3 53.3 308.6
Goodwill - 72.2 - 15.3 - 7.3 - 94.8
----------------------------- ------- -------- ------- ------- ------- ------- -------- --------
Cash paid 348.6 32.8 18.0 399.4
(Cash)/debt acquired (0.9) (1.3) 0.1 (2.1)
-------- ------- ------- --------
347.7 31.5 18.1 397.3
Deferred consideration - 3.6 2.5 6.1
Total consideration 347.7 35.1 20.6 403.4
----------------------------- ------- -------- ------- ------- ------- ------- -------- --------
(1) Acquired intangibles relate to customer relationships
(GBP228.2m), patented technology (GBP34.1m), and brand
(GBP7.4m).
Acquisitions revenue and adjusted operating profit
From the date of acquisition to 31 March 2021, each acquired
business contributed the following to Group revenue and adjusted
operating profit:
Acquisition Revenue Adj.(2) Pro-forma Operating Adj.(2) Pro-forma
date revenue profit(1) operating
profit(1)
GBPm GBPm GBPm GBPm GBPm GBPm
------ --------------- ---------- ---------- ------------ ------------ ---------- ------------
WCW 16 Oct 2020 70.0 6.4 76.4 14.6 1.3 15.9
S&W 31 Dec 2020 9.1 9.1 18.2 2.2 2.2 4.4
FITT 15 Jan 2021 3.9 5.5 9.4 0.7 1.0 1.7
PDI 22 Dec 2020 0.9 0.9 1.8 - - -
HSP 2 Oct 2020 1.5 - 1.5 0.2 - 0.2
85.4 21.9 107.3 17.7 4.5 22.2
(1) Adjusted operating profit after appropriate allocation of
head office costs, but before acquisition related charges.
(2) Pro forma revenue and adjusted operating profit has been
extrapolated from the results reported since acquisition to
indicate what these businesses would have contributed if they had
been acquired at the beginning of the financial year on 1 October
2020. These amounts should not be viewed as confirmation of the
results of these businesses that would have occurred if these
acquisitions had been completed at the beginning of the year.
11. LEASES - RIGHT OF USE ASSETS AND LEASE LIABILITIES
Right of use assets
Land & buildings Plant & Motor IT & office
GBPm machinery vehicles equipment Total
GBPm GBPm GBPm GBPm
---------------------- ------------------- ------------------- ----------- -------------- --------
At 1 October
2020 28.5 0.4 2.1 0.6 31.6
Additions 16.2 - 0.8 0.3 17.3
Disposals - (0.1) - - (0.1)
Exchange adjustments (1.2) - (0.1) (0.1) (1.4)
At 31 March 2021 43.5 0.3 2.8 0.8 47.4
Depreciation (4.5) (0.1) (0.7) (0.1) (5.4)
At 31 March 2021 39.0 0.2 2.1 0.7 42.0
---------------------- ------------------- ------------------- ----------- -------------- --------
Right of use assets represent those assets held under operating
leases which IFRS 16 requires to be capitalised.
Lease liabilities
The movement in lease liabilities is set out below:
GBPm
-------------------------------- -------
At 1 October 2020 33.7
Additions 17.4
Disposals (0.1)
Lease repayments (5.5)
Interest on lease liabilities 0.9
Exchange adjustments (1.5)
At 31 March 2021 44.9
-------------------------------- -------
Analysed as: GBPm
Repayable within one year 9.9
Repayable after one year 35.0
-------------------------------- -------
12. OTHER LIABILITIES
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
----------------------------------------- --------- --------- --------
Future purchases of minority interests 4.3 4.2 4.2
Deferred consideration 7.0 11.9 7.3
----------------------------------------- --------- --------- --------
11.3 16.1 11.5
----------------------------------------- --------- --------- --------
Analysed as:
Repayable within one year 10.6 15.5 11.5
Repayable after one year 0.7 0.6 -
---------------------------------------- --------- --------- --------
The movement in the liability for future purchases of minority
interests is as follows:
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
--------------------------- --------- --------- --------
At 1 October 4.2 4.3 4.3
Fair value remeasurements 0.1 (0.1) (0.1)
At end of period 4.3 4.2 4.2
--------------------------- --------- --------- --------
At 31 March 2021, the Group retained put options to acquire
minority interests of 10% held in each of M Seals and Kentek which
were both exercisable from November 2018. At 31 March 2021, the
estimate of the financial liability to acquire the outstanding
minority shareholdings was reassessed by the Directors, based on
their current estimate of the future performance of these
businesses and to reflect foreign exchange rates at 31 March
2021.
Deferred consideration comprises:
31 March 31 March 30 Sept
2021 2020 2020
GBPm GBPm GBPm
------------------ --------- --------- --------
VSP Technologies - 7.9 5.5
DMR Seals - 0.6 -
Sphere Surgical 0.8 1.0 0.8
CR Systems 0.4 1.9 1.0
PumpNSeal - 0.5 -
PDI 0.7 - -
FITT Resources 1.7 - -
S&W 3.4 - -
7.0 11.9 7.3
------------------ --------- --------- --------
The movement on deferred consideration during the period is as
follows:
1 Oct Foreign 31 March
2020 Additions exchange Payments 2021
GBPm GBPm GBPm GBPm GBPm
------------------ ------ ------------ ---------- --------- ---------
VSP Technologies 5.5 - - (5.5) -
Sphere Surgical 0.8 - - - 0.8
CR Systems 1.0 - - (0.6) 0.4
PDI - 0.8 (0.1) - 0.7
FITT Resources - 1.7 - - 1.7
S&W - 3.6 (0.2) - 3.4
7.3 6.1 (0.3) (6.1) 7.0
------------------ ------ ------------ ---------- --------- ---------
13. DIVIDENDS
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2021 2020 2020 2021 2020 2020
pence pence pence
per per per
share share share GBPm GBPm GBPm
-------------------------------- ------- ------- -------- ------- ------- --------
Final dividend of the prior
year, paid in January 30.0 20.5 20.5 37.3 23.2 23.2
Interim dividend, paid in June 12.5 - - 15.6 - -
-------------------------------- ------- ------- -------- ------- ------- --------
42.5 20.5 20.5 52.9 23.2 23.2
-------------------------------- ------- ------- -------- ------- ------- --------
The Directors have declared an interim dividend of 12.5p per
share (2020: GBPnil) which will be paid on 16 June 2021 to
shareholders on the register on 28 May 2021. The total value of the
dividend will be GBP15.6m (2020: GBPnil).
14. EXCHANGE RATES
The exchange rates used to translate the results of the overseas
businesses were as follows:
Average Closing
------------------------------ ------------------------------
31 March 31 March 30 Sept 31 March 31 March 30 Sept
2021 2020 2020 2021 2020 2020
------------------- --------- --------- -------- --------- --------- --------
US dollar (US$) 1.36 1.29 1.29 1.38 1.24 1.29
Canadian dollar
(C$) 1.74 1.73 1.73 1.73 1.76 1.73
Euro (EUR) 1.13 1.17 1.14 1.17 1.13 1.10
Swiss franc (CHF) 1.23 1.26 1.23 1.30 1.20 1.19
Australian dollar
(A$) 1.81 1.94 1.89 1.81 2.03 1.80
------------------- --------- --------- -------- --------- --------- --------
15. RELATED PARTY TRANSACTIONS
There have been no changes to the related party arrangements or
transactions as reported in the 2020 Annual Report &
Accounts.
Transactions between Group companies, which are related parties,
have been eliminated on consolidation and are therefore not
disclosed. Other transactions which qualify to be treated as
related party transactions are: those relating to the remuneration
of key management personnel, which are not disclosed in this Half
Year Report, but will be disclosed in the Group's next Annual
Report & Accounts; and transactions between the Group and the
Group's defined benefit pension plan, which are disclosed within
the Consolidated Cash Flow Statement.
[1] Based on notional 2020 interim dividend of 10p (1/3 of full and final 2020 dividend of 30p)
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END
IR DZGMKGVKGMZZ
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May 17, 2021 02:00 ET (06:00 GMT)
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