TIDMRGD
RNS Number : 8544H
Real Good Food Company Plc (The)
26 June 2013
The Real Good Food Company plc (AIM:RGD)
Final Results for the 12 months ended 31 March 2013
The Real Good Food Company plc ("the group" or "RGFC") is a
diversified food group, which owns Napier Brown (Europe's biggest
non-refining sugar distributor), as well as Renshaw and R&W
Scott (bakery ingredients), Garrett Ingredients (dairy ingredients)
and Haydens Bakery (patisserie and desserts).
HIGHLIGHTS 12 months 12 months 15 months
ended ended ended
31 March 31 March 31 March
2013 2012 2012
GBP'000s GBP'000s GBP'000s
Revenue 265,754 258,573 305,529
EBITDA 10,466 8,455 9,185
Profit before taxation(1) 6,765 4,925 4,910
EPS:
Basic (adjusted) 7.8p 5.4p 6.2p
Diluted (adjusted) 7.2p 4.9p 5.7p
Working Capital
(Fixed Assets/Stock/Trade Debtors
& Trade Creditors) 42,555 38,750 38,750
Net Borrowings (Incl Cash) 24,952 28,655 28,655
Net Debt/EBITDA 2.4 3.3* 3.3*
(1) before restructuring costs
-- Further improvement over last year's strong performance,
driven by significant EBITDA increases at Haydens and R&W
Scott
-- EBITDA up 24% to GBP10.5m, compared to GBP8.5m in the 12
months ended 31 March 2012
-- All trading divisions now have positive EBITDA following the
improvements at Haydens and R&W Scott
-- Significant improvement in EPS adjusted (fully diluted
excluding significant items) at 7.2p this year, up 50% on 4.9p for
12 months ended 31 March 2012
-- Significant improvement in debt serviceability with Net Debt
/ EBITDA ratio down from 3.3x at 31 March 2012 to 2.4x
currently
-- Net Borrowings of GBP25.0m at 31 March 2013, down GBP3.7m
from GBP28.7m in March 2012
Pieter Totté, Executive Chairman, comments:
"I am delighted to be able to report on a year of steady
progress by the group, when we achieved a significant increase in
earnings despite only recording a modest increase in overall
revenue. We continued to invest in the development of our five
businesses, but were still able to reduce total borrowings and
secured new financing facilities for future expansion.
"While the outlook for the economy and consumers' disposable
income is likely only to improve gradually, I am confident that we
have a strong platform for long term, sustainable growth, based on
sound plans. I would like to thank colleagues across all the
businesses for all the hard work which lies behind these
results."
ENQUIRIES:
Real Good Food
Pieter Totté, Chairman Tel: 020 3056 1516
Mike McDonough, Finance Director Tel: 0151 706 8200
Shore Capital & Corporate Tel: 020 7408 4090
Stephane Auton
Patrick Castle
Cubitt Consulting Tel: 020 7367 5100
Gareth David
Cebuan Bliss
Change of Accounting Reference Date
This year's Annual Report covering the 12 months ended 31 March
2013 will in all financial schedules and supporting notes be tabled
alongside the 15 month period ended 31 March 2012 as required in
statutory reporting. However, where appropriate and relevant, the
12 month period ended 31 March 2012(*) will be included and
commented on in order to present like for like visibility and
demonstrate the underlying performance year on year. All references
to last year in this report refer to the 12 months trading to the
31 March 2012
(*) This will be on a "proforma basis" as, whilst this period
has been audited as part of the 15 month period ended 31 March
2012, it hasn't been audited as a 12 month period in its own right.
The Board is confident that this will present a reliable
comparison.
CHAIRMAN'S STATEMENT
I am delighted to be able to report on a year of steady progress
by the group, when we achieved a significant increase in earnings
despite only recording a modest increase in overall revenue. We
continued to invest in the development of our five businesses, but
were still able to reduce total borrowings and secured new
financing facilities for future expansion.
EBITDA, at GBP10.5 million, is GBP2 million (+24%) up on last
year's GBP8.5 million for the 12 months ended March 2012, despite a
difficult trading environment. The unexpected contraction of the
economy in the last quarter of 2012 was a challenge. It is clear
that the pressure on household incomes, with wage rises lagging
behind inflation, is real and inevitably hitting many markets for
non-essential items.
In this context, our trading performance was encouraging and
demonstrates the robustness of our plans. All five Divisions
recorded a positive EBITDA in the year, with the improved
performances achieved at both R&W Scott and Haydens being
particularly pleasing. This improved profit performance was also
accompanied by a reduction of GBP3.7 million in our Net Debt
position at the end of March 2013 which stood at GBP25.0
million.
In December we secured a new five year banking arrangement which
will support the business as we progress our ambitious growth
plans. We were delighted that we were able to continue our
relationship with PNC and the new facility of GBP50 million, an
increase of GBP10 million, gives us a strong platform for the next
five years. We also started working with Lloyds TSB during the year
who provide clearing and ancillary facilities.
Finally, we have now fully implemented the management structure
which we have been working towards and which now reflects our
targeted business model. We have Managing Directors and full
management teams in all five businesses, which enables each one to
operate as a stand-alone unit.
At the same time we have a strong central team, able to support
these local teams as required. Formal business plans have been
prepared for each business with the central executive team
prioritising support and investment plans. I am confident that from
a management perspective the business is better equipped than
ever.
Forward plans
We have undertaken full strategic reviews across each of the
divisions and have agreed three year business plans. We have
re-orientated each business to become commercially-led and
market-driven which is a significant change from three years ago.
We have invested in marketing resource across the group and also in
retail category management, functions where we historically had
little or no expertise. We are also fortunate to operate mainly in
growth markets while, in some businesses (Renshaw, in particular),
export represents a significant opportunity.
I would like to highlight in particular three major initiatives;
developments in our sugar sourcing and the investment we are making
near Immingham, brand marketing and sales.
Clearly sourcing more sugar is critical to us achieving our
corporate objectives. It became evident to us that, alongside
developing relationships with sugar producers, we need to invest in
order that we can handle large quantities of imported sugars cost
effectively, wherever they come from. Our new site at
Stallingborough, next to the deep sea port of Immingham, will
receive bulk sugar, quality check and transfer it into road tankers
for onward distribution, either to our own packing or manufacturing
sites or directly to third party customers.
The major UK sugar customers are very supportive of this move as
they recognise the need for more supply options within the UK.
Meanwhile, in conjunction with our partner Omnicane, we continue to
look at opportunities for long term, sustainable supply
arrangements, not only in Mauritius, but also on the African
continent.
Three of our businesses in particular are investing
significantly in their brands; Napier Brown (with Whitworths),
Renshaw and R&W Scott. These brands were assets which we owned,
but were not utilising. In each case we have undertaken a formal
review, developed a new brand vision and invested in high quality
design, alongside consumer research and product development.
We are already seeing the results, with Whitworths successfully
bringing some long overdue innovation to the baking sugars market
and Renshaw beginning to leverage the strength of its reputation
across all its sales channels. R&W Scott will also be launching
a number of new products during the course of this year, while we
also see the potential for brands in some sectors of
foodservice.
Finally, as we reviewed the business plans we soon recognised
the need for additional sales resource across all the businesses.
As we grow each of the businesses we need more sales resource to
handle the increased activity levels across a range of channels and
to ensure that we remain close to our customers' requirements from
both a business development and a service standpoint.
We are actively recruiting more sales management at all five
divisions. In addition, in order to fast track the opportunities we
have identified in Europe, we have opened an office in Brussels and
recruited a General Manger to work with each of the businesses on
their European export plans. This has already generated a number of
new opportunities.
Outlook
While the outlook for the economy and consumers' disposable
income is likely only to improve gradually, I am confident that we
have a strong platform for long term, sustainable growth, based on
sound plans. I would like to thank colleagues across all the
businesses for all the hard work which lies behind these
results.
Pieter Totté
Chairman
26 June 2013
DIVISIONAL BUSINESS REVIEW
Napier Brown
12 months ended 12 months ended 15 months ended
31 March 2013 31 March 2012 31 March 2012
GBP'000s GBP'000s GBP'000s
Revenue 157,156 152,642 176,885
EBITDA 4,723 3,912 4,383
Operating profit 4,353 3,355 3,703
Operating profit
% 2.8% 2.2% 2.1%
Volume and sales revenue both grew resulting in an EBITDA of
GBP4.7 million, an increase of over 20% on last year's level of
GBP3.9 million. Sales increased in particular in the manufacturing
sector, while in retail margins were enhanced by the successful
added value Whitworths launches. These trends present a model for
the business going forward.
The major manufacturing customers are keen to find new supply
sources and we are keeping them briefed on our future plans in this
area. In retail, our innovation programme has been greeted
enthusiastically by retailers who are keen to see a strong third
brand operating in the market. We have supported Whitworths with
PR, web and social media campaigns.
Garrett Ingredients
12 months ended 12 months ended 15 months ended
31 March 2013 31 March 2012 31 March 2012
GBP'000s GBP'000s GBP'000s
Revenue 31,260 29,783 38,181
EBITDA 2,151 2,677 3,231
Operating profit 2,151 2,677 3,231
Operating profit
% 6.9% 9.0% 8.5%
While volume and revenue grew in the year, spot prices in both
the dairy and sugar markets were below the levels of last year.
This led to reduced margins and EBITDA fell accordingly to GBP2.2
million as compared with GBP2.7 million last year. Such cyclical
patterns are not unusual in a trading business.
The poor 2012 summer also impacted on sales to the ice cream
industry. The business, however, progressed in developing its
product range, with the new distributorships secured for dextrose
and sweetened condensed milk.
Renshaw
12 months ended 12 months ended 15 months ended
31 March 2013 31 March 2012 31 March 2012
GBP'000s GBP'000s GBP'000s
Revenue 41,033 40,238 46,368
EBITDA 4,952 5,557 5,816
Operating profit 4,125 4,824 4,908
Operating profit
% 10.0% 12.0% 10.6%
Sales revenue at GBP41.0 million continued to grow, up 2.2% on
last year, although EBITDA at GBP5 million was lower than last
year's strong performance of GBP5.6 million, with overheads
increasing as the business invested in new resource to capitalise
on the market opportunities which we have identified.
Sales volumes continued to be buoyant in most sectors, though a
decision was taken to exit some lower margin industrial business.
Delivered margin grew ahead of sales as margin mix improved with
the focus on more added value products. Most of the fixed cost
increases involved sales and technical management (particularly for
export and online). There were also a number of costs associated
with the brand re-launch of Renshaw, with the full range of
products across all sales channels planned to be re-packaged during
2013.
R&W Scott
12 months ended 12 months ended 15 months ended
31 March 2013 31 March 2012 31 March 2012
GBP'000s GBP'000s GBP'000s
Revenue 10,968 11,819 14,437
EBITDA 425 (1,191) (1,044)
Operating profit 166 (1,428) (1,338)
Operating profit
% 1.5% (12.1%) (9.3%)
This was the first year that R&W Scott has been run as a
stand-alone business and it was extremely encouraging that it
achieved a positive EBITDA of GBP0.4 million this year as opposed
to a GBP1.2 million loss last year.
Sales fell year on year, but this was largely a result of a
conscious rebalancing of the product portfolio towards more
added-value sectors. Margins were well controlled and production
efficiencies improved driving the better performance over last
year. The other main achievement was to put together a management
team and work up a business strategy and plan. In this context it
was a great boost for the business to win the food and drink
category at the 2013 Lanarkshire Business Awards.
Haydens
12 months ended 12 months ended 15 months ended
31 March 2013 31 March 2012 31 March 2012
GBP'000s GBP'000s GBP'000s
Revenue 25,337 24,485 29,658
EBITDA 341 (462) (604)
Operating profit (417) (1,040) (1,333)
Operating profit
% (1.6%) (4.2%) (4.5%)
EBITDA increased by GBP0.8 million year on year and whilst the
improvements were delivered later than anticipated, at the year end
we were achieving our targeted run-rate. This demonstrates that our
plan is fully achievable and it is pleasing to report that these
positive trends have continued into the new financial year.
A rationalisation of the product range reduced the level of
sales growth, but this had a very positive effect on manufacturing
costs. The new Hopton distribution centre continued to operate
successfully as well as contributing revenue through its third
party sales.
FINANCE DIRECTOR'S REPORT
Having been associated with the Renshaw and R&W Scott
businesses for over twenty years and soon to have been in my
present role as Group Finance Director for four, I think it is
appropriate, in addition to the specific commentary on the year in
this annual report, to take stock of the progress the Board and the
Divisional Executive teams have made.
Structure
The group itself is now a much simpler and clearer organisation
with more focus and visibility both internally and externally on
performance as a result of the following changes:
Ø The establishment of Garrett Ingredients and R&W Scott as
separate trading divisions from Napier Brown and Renshaw
respectively
Ø The hive down of Haydens from the parent company into its own
separate legal entity
Ø The liquidation of numerous non trading dormant subsidiaries
which presented clutter to stakeholders such as Credit Insurers and
potential funders
As the Chairman also touches on, having Managing Directors now
in place in all divisions supported by their own management teams
completes our transition into locally managed businesses focused on
delivering their opportunities and business plans supported by the
Group's Executive team.
Performance
The last two years' performance, with EBITDA growing to GBP10.5
million this year is a long way from the period from 2008 until
2010, when the group was navigating its way through the
uncertainties and pressures of the EU Sugar regime reform when
EBITDA averaged approximately 50% of current levels. More
importantly, each division now has the opportunities and plans to
deliver a growing and more sustainable profit base in the
future:
Ø Napier Brown has restored its profitability levels post the
sugar regime reform and has made great progress in securing its
supply lines and growth plans through the group's partnership with
Omnicane and the investment in sugar handling facilities in
Immingham boosting capabilities dramatically. Revitalising the
retail and foodservice range under the Whitworths brand also offers
significant opportunities
Ø Garrett Ingredients will always experience a degree of
variability in performance as it operates in a trading market but
is well equipped to deal with this and has also made significant
progress in extending its product offering by taking on new
distributorships and range extensions, as well as extending its
sources of supply particularly in the Dairy sector to ensure
availability and deliver the growth opportunities
Ø Renshaw has undoubtedly been in the right place at the right
time to take advantage of the significant growth in the home baking
market both here in the UK and the US. Not resting on its laurels,
it has recognised the need to invest in the business now, primarily
brand and commercial resource, to take advantage of further added
value growth in the UK and the huge opportunities which export
offers
Ø R&W Scott has been focusing on improving its product
offering and re-establishing the brand offering it historically
had. The separation from Renshaw has benefited both businesses
bringing more clarity and focus
Ø Haydens for some time has had a clear vision of its
operational improvement plan including the introduction of freezing
capacity but has struggled to deliver on this. However, we have
seen the management team make a significant step forward in the
second half of this year both operationally and commercially, and
there are, clear and exciting plans to continue the development and
sustainably improve margins and build the bottom line. On the
commercial side the team is being strengthened and, plans are in
place to develop the existing range as well as increasingly
pursuing new product and customer opportunities.
Ø RGFE (Europe) is still very much in its early days but we can
see already the synergies with our existing business, starting with
Renshaw, and the difference it will make in accessing the
commercial opportunities in Europe
Net Debt
Despite the relative uncertainty throughout the period of sugar
regime reform, Net Debt levels have always been under control,
manageable and trending down. The significant increase in Sugar
prices at the start of 2011 when prices increased by 40% did push
Working Capital and hence Net Debt up although this was well within
our funding facilities as reported in last year's annual
report.
We will be investing significantly in the coming year, primarily
in the Immingham sugar handling facility, but with funding capacity
in place, and cash generation, improving Net Debt levels will
resume a downward path thereafter.
Financing
We have reported previously on the refinancing exercise we
completed in December 2012 increasing and extending our existing
facility with PNC and their partner ABN AMRO by GBP10 million to
GBP50 million. Securing these facilities for the next five years,
is a huge vote of confidence in the business in a difficult market
where renewals and extensions of facilities continue to be elusive
to some and especially on improved terms. Increasing the facilities
is a key element in providing us with the capacity we need to meet
our investment and growth plans
We have worked with the management team at PNC, and also
previously when they were part of KBC since 2008. They understand
our business and have demonstrated a flexible approach to meeting
our requirements and needs. The facilities are competitively
priced, asset based, focusing primarily on ID (invoice discounting)
and stock financing which works well since as we grow Sales the
assets increase accordingly, especially Debtors, providing
additional funding capacity. The facilities are well balanced with
GBP8.1 million of term loans repayable over the next 5 years
largely secured on property and plant with a book value of GBP17.7
million as at March 2013.
Whilst property values generally remain depressed a recent
exercise on the Immingham site indicates significant untapped value
in assets with replacement costs three times the GBP1.7 million
acquisition cost. Our operations team have recently completed an
exercise, for insurance purposes, indicating replacement values as
a whole across our property and plant assets of approximately GBP92
million. We would expect some extra financing capacity to become
available as particularly property values pick up should the
economy's outlook improve.
We also have a new partner on board, Lloyds TSB, who provide us
with clearing and ancillary facilities with the potential for other
funding opportunities especially in the supply chain.
In summary, on all levels the group has developed hugely in
recent years both in structure and focused management capability:
it is now demonstrating its ability to deliver volume growth and
more sustainable profits with increasing cash generation and
financing capacity setting a solid base for the future.
REVIEW OF THE YEAR
Accounting reference date
As commented on at the start of this report, the change in the
accounting reference date in April 2011 will improve the Group's
budgeting and forecasting routines, and provide stakeholders with
improved commentary and trading updates. In order to make clear our
underlying performance the emphasis in commentary in this report
will be on comparisons of the current 12 month period ended 31
March 2013 (year) with the 12 months ended 31 March 2012 (last
year).
Overview
It is very pleasing to be able build on last year's performance
with the Group delivering further improvements in EBITDA at GBP10.5
million, up 24%, on the GBP8.5 million delivered last year. What
was particularly pleasing were the turnarounds in Haydens and
R&W Scott divisions who both returned to profitability at the
EBITDA level vindicating the actions taken in the last 12-18
months. Net Debt levels remain under control at GBP25.0 million an
improvement of GBP3.7 million on last year.
Revenue
Group revenue from continuing operations for the 12 months to 31
March 2013 was GBP265.8 million, which on a like-for-like basis was
approximately 2.8% up (GBP7.2m) on the 12 months to 31 March 2012.
Volumes, mainly Sugar, in Napier Brown and Garrett Ingredients were
up 5% overall with the rest of the group down slightly as they
focussed, this year, on improving sales mix with the emphasis on
added value lines.
Further movements in base commodity costs did require price
increases to be passed on but we saw nothing like the dynamics of
last year when Sugar prices increased by up to 40% at the start of
2011 putting significant value into the balance sheet.
Key Comparatives 12 months 12 months 15 months
(Continuing Operations, excluding ended ended ended
Significant Items) 31 March 31 March 31 March
2013 2012 2012
GBP'000s GBP'000s GBP'000s
Revenue 265,754 258,573 305,529
Gross Profit 37,285 33,472 39,626
Delivered Margin
(Gross Profit after Distribution
costs) 25,620 22,887 26,617
EBITDA 10,466 8,455 9,185
Operating profit
(EBITDA less Depn) 8,241 6,341 6,564
Operating profit % 3.1% 2.5% 2.1%
Profit before Taxation
(After Financing & Pension costs) 6,765 4,925 4,910
Margins
Delivered Margin for the year was GBP25.6 million with EBITDA of
GBP10.5 million as compared with the 12 months ended March 2012 of
GBP22.9 million and GBP8.5 million respectively. The prime drivers
of the GBP2.0 million improvement in EBITDA were Haydens, GBP0.8
million, and R&W Scott, GBP1.6 million, with both businesses
recovering from losses at this level last year.
Profit before Tax and Interest
Overall profits for the year at GBP6.8 million (PBT continuing
operations including pension "running costs") increased by GBP1.8
million, over the 12 months ended March 2012. GBP0.1m higher
depreciation, reflecting increased capital expenditure and GBP0.1m
higher interest costs reflecting higher Net Debt levels during the
year slightly diluted the GBP2.0 million EBITDA improvement.
Financing Costs
Financing costs for the year at GBP1.48m were approximately 10%
up on the prior year reflecting the higher Working Capital levels
during the year.
Significant Items
During the year the group incurred one-off costs of GBP0.5
million due mostly, GBP0.4 million, to the reshaping of the
executive team at Haydens, including a new Managing Director and
Financial Controller now in place, GBP0.1 million was incurred in
"break costs" associated with the refinancing exercise we completed
with PNC, our existing provider in December.
31 March 2013 31 March 2012
Working Capital and Net Debt GBP'000s GBP'000s
Working Capital
(Fixed Assets/Stock/Trade Debtors & Trade
Creditors) 42,555 38,750
Net Borrowings (Incl Cash) 24,952 28,655
Net Debt/EBITDA 2.4 3.3*
*Based on 12 months to March 2012
Cash Flow and Debt
Working Capital levels have increased by GBP3.8 million during
the year. Within this Fixed Assets were up a net GBP1.5 million
(GBP3.7million Capital expenditure less GBP2.2million depreciation)
reflecting our investment plans with the balance GBP2.3 million,
consisting of movements across the more fluid stock, debtor and
creditor positions.
Net Debt (after Cash) as at 31 March 2013 was GBP25.0 million,
down GBP3.7m (13%) on the prior year (31 March 2012 GBP28.7
million) reflecting the cash generated from the improved trading
performance and also the shares issued in the year as shown in this
simple bridge for the year overall.
Net Debt Movements
31 March 2013
GBP'000s
Opening April 2012 28,656
Operating Cash (4,989)
Share Issue (2,459)
Capex 3,744
Closing March 2013 24,952
Our ability to service this debt has improved significantly with
a reduction in the key Debt ratio (Net Debt to EBITDA) from 3.3
last year to 2.4 currently
Pensions
Pensions Summary
Ø Group operates one defined benefits scheme which was closed to
new members in 2000
Ø Group expects to be able to confirm shortly its agreement in
principle with the trustees on extending the existing recovery plan
with contribution levels for the coming year to be GBP265K as
originally planned with annual increments of 3% for the following
two years. In the current year contributions were GBP187K and
GBP177K in 2011/12. The group is confident this will meet the
trustees needs and the pension regulators guidance whilst it
implements its growth plans
Ø Latest IAS valuation indicates GBP3.5 million deficit, an
increase of GBP2.4 million since March 2012,
driven mainly by current market conditions and also its impact
on depressing discount rates used in calculating future
liabilities
Pensions Commentary
Two subsidiaries, Napier Brown Foods Limited and Renshawnapier
Limited, operate a defined benefit pension scheme which has been
closed to new members since 1 June 2000. In common with virtually
all companies with such pension schemes we have to report at this
time a significant deterioration in the deficit within the scheme.
As has been widely reported in the Press, this is a result of
current economic policies and their effect on Gilt rates which are
taken as the prime actuarial assumption in calculating discount
rates and thereby the potential future liabilities within a scheme.
If Gilt rates improve as is widely expected over the next few years
then, all things being equal, liabilities within the scheme will be
reduced and the deficit will also therefore go down. It is perhaps
worth noting that in June 2011 the scheme was in surplus.
International Financial Reporting Standards require an actuarial
valuation of the scheme to be undertaken at each accounting date
(IAS 19 Employee Benefits). At 31 March 2013 this identified a
GBP3.5 million current deficit, a deterioration of GBP2.4 million
since 31 March 2012 driven mainly by an assumed actuarial increase
in the schemes benefit obligations.
Ø The scheme's assets at 31 March 2013 are GBP15.6 million, on
the face of it a reduction of GBP0.4 million since 31 March 2012,
although this includes a GBP0.8 million divestment to meet transfer
out payments in the year. "Like with like" asset values however
were 2.3% higher than the GBP16.0 million opening position.
Ø The schemes liabilities (benefit obligations) at GBP19.2
million increased overall as set out below. The future assumptions
are largely driven by the reduction in discount rates with the
experience adjustment originating from the latest triennial
valuation as at 31 March 2012, which whilst not being finalised has
to be factored into the calculations.
Deficit Movements
GBPm GBPm
Opening April 2012 (1.1)
Income/Contributions 1.2
Benefits paid (0.8)
Transfers Out (0.8)
-------------------------------- ------ ------
Assets (0.4) (0.4)
-------------------------------- ------ ------
Transfer Out 0.9
Experience (mainly Triennial)* (1.8)
Future assumptions (1.1)
-------------------------------- ------ ------
Liabilities (2.0) (2.0)
-------------------------------- ------ ------
Closing March 2013 (3.5)
-------------------------------- ------ ------
* represents actual performance 2009 through to 2012 as compared
to the actuarial assumptions made by the schemes actuary at the
time
The group continues to be proactive with the trustees in
managing the scheme, notably exploring with members the options
beneficially available to them, which could also help to reduce the
schemes real liabilities going forward. The investment mandate has
also been revised during the year as has the choice of investment
managers with some changes being made.
It is worth noting that whilst the key market drivers are
exceptionally weak at the moment primarily as a result of policies
such as quantitative easing and the maintenance of low interest
rates, the Government has prompted the pension regulator to
encourage all trustees and employers to give more focus to "private
sector investment and growth" and "support scheme funding
arrangements that are compatible with sustainable growth for the
sponsoring employer".
The board are in discussion with the Trustees regarding this and
a common sense approach to current market conditions and actuarial
valuations whilst remaining committed to fulfilling the group's
obligations. This is already in place to an extent as reflected in
the existing recovery plan, agreed in 2009, which will be renewed
in the next few months once discussions with the Trustees are
completed. During the period the group contributed GBP187,000
(2011/12: GBP177,000) to the scheme.
Key Performance Indicators
The Board of Directors monitors a range of financial and
non-financial key performance indicators, reported on a periodic
basis, to measure the group's performance over time. The key
performance indicators are set out below:
31 March 2013 31 March 2012
Revenue growth(1) 2.8% n/a
Operating margin(2) 3.1% 2.5%
Debt cover (Net debt/EBITDA)(3) 2.4 3.3*
Interest cover(4) 7.1 4.8
Health & Safety score(5) 88% 83%
* Based on 12 months to March 2012
1. Revenue growth is calculated for continuing operations.
2. Operating margin is stated for continuing operations only and
is calculated by dividing operating profit before tax, interest and
significant items by revenue from continuing operations.
3. Debt cover is calculated by dividing total net debt by
continuing EBITDA. EBITDA is defined as earnings before significant
items, interest, tax, depreciation and intangible asset
amortisation.
4. Interest cover is calculated by dividing EBITDA by net
interest payments (gross interest payable less interest
receivables).
5. Health & Safety score represents the weighted average
score across all sites as determined by our health and safety score
index which was introduced in 2008 and is measured by an external
consultant. Figures quoted refer to the calendar year.
Mike McDonough
Group Finance Director
26 June 2013
Consolidated Statement of Comprehensive Income
12 months ended 31 March 2013
12 months ended 15 months ended
31 March 2013 31 March 2012
----------------------------------- ------------------------------------ ------------------------------------
Before Before
significant Significant significant Significant
items items Total items items Total
Continuing Operations GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
REVENUE 265,754 - 265,754 305,529 - 305,529
Cost of sales (228,469) - (228,469) (265,903) - (265,903)
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
GROSS PROFIT 37,285 - 37,285 39,626 - 39,626
Distribution costs (11,665) - (11,665) (13,009) - (13,009)
Administration expenses (17,379) (505) (17,884) (20,053) (550) (20,603)
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
OPERATING PROFIT 8,241 (505) 7,736 6,564 (550) 6,014
Finance income - - - - - -
Finance costs (1,560) - (1,560) (1,896) - (1,896)
Other finance income 84 - 84 242 - 242
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
PROFIT BEFORE TAXATION 6,765 (505) 6,260 4,910 (550) 4,360
Income tax expense (1,467) 121 (1,346) (859) 113 (746)
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
PROFIT FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO THE EQUITY
HOLDERS OF THE PARENT 5,298 (384) 4,914 4,051 (437) 3,614
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
OTHER COMPREHENSIVE INCOME
Actuarial (losses)/gains
on defined benefit plans (2,731) - (2,731) (1,499) - (1,499)
Income tax relating to components
of other comprehensive income 613 - 613 360 - 360
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD ATTRIBUTABLE
TO THE EQUITY HOLDERS OF
THE PARENT 3,180 (384) 2,796 2,912 (437) 2,475
----------------------------------- ------------ ----------- --------- ------------ ----------- ---------
Earnings per share from continuing
operations:
- basic 7.2p 5.6p
- diluted 6.6p 5.1p
Consolidated Statement of Changes in Equity
12 months ended 31 March 2013
Issued Share Share
Share Premium Option Retained
Capital Account Reserve Earnings Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------- --------- --------- --------- --------- ---------
Balance as at 1 January 2011 1,300 68,870 153 9,661 79,984
Share options to be issued - - 38 - 38
Deferred tax on share options - - 335 - 335
Shares issued in period - 4 - - 4
Total comprehensive income for
the period - - - 2,475 2,475
------------------------------- --------- --------- --------- --------- ---------
Balance as at 31 March 2012 1,300 68,874 526 12,136 82,836
------------------------------- --------- --------- --------- --------- ---------
Share options to be issued - - 45 - 45
Deferred tax on share options - - (31) - (31)
Shares issued in period 89 2,370 - - 2,459
Total comprehensive income for
the period - - - 2,796 2,796
------------------------------- --------- --------- --------- --------- ---------
Balance as at 31 March 2013 1,389 71,244 540 14,932 88,105
------------------------------- --------- --------- --------- --------- ---------
Consolidated Statement of Financial Position
12 months ended 31 March 2013
31 March 31 March
2013 2012
GBP'000s GBP'000s
------------------------------- --------- ---------
NON-CURRENT ASSETS
Goodwill 75,796 75,796
Other intangible assets 1,412 521
Property, plant and equipment 17,685 17,057
Deferred tax asset 1,385 912
------------------------------- --------- ---------
96,278 94,286
------------------------------- --------- ---------
CURRENT ASSETS
Inventories 15,037 17,380
Trade and other receivables 30,213 24,444
Cash and cash equivalents 7,134 2,506
------------------------------- --------- ---------
52,384 44,330
------------------------------- --------- ---------
TOTAL ASSETS 148,662 138,616
------------------------------- --------- ---------
CURRENT LIABILITIES
Trade and other payables 21,282 20,082
Borrowings 23,032 24,366
Current tax liabilities 750 570
------------------------------- --------- ---------
45,064 45,018
------------------------------- --------- ---------
NON-CURRENT LIABILITIES
Borrowings 9,054 6,796
Deferred tax liabilities 2,899 2,886
Retirement benefit obligations 3,540 1,080
------------------------------- --------- ---------
15,493 10,762
------------------------------- --------- ---------
TOTAL LIABILITIES 60,557 55,780
------------------------------- --------- ---------
NET ASSETS 88,105 82,836
------------------------------- --------- ---------
EQUITY
Share capital 1,389 1,300
Share premium account 71,244 68,874
Share option reserve 540 526
Retained earnings 14,932 12,136
------------------------------- --------- ---------
TOTAL EQUITY 88,105 82,836
------------------------------- --------- ---------
Consolidated Cash Flow Statement
12 months ended 31 March 2013
12 months 15 months
ended ended
31 March 31 March
2013 2012
GBP'000s GBP'000s
------------------------------------------------------- --------- ---------
CASH FLOW FROM OPERATING ACTIVITIES
Adjusted for:
Profit before taxation 6,260 4,360
Finance costs 1,560 1,896
Finance income - -
Other finance income (84) (242)
Depreciation of property, plant and equipment 1,992 2,449
Amortisation of intangibles 233 172
------------------------------------------------------- --------- ---------
Operating Cash Flow 9,961 8,635
Decrease / (Increase) in inventories 2,343 (7,834)
(Increase) in receivables (5,769) (70)
Pension contributions (187) (177)
Increase in payables 1,220 221
------------------------------------------------------- --------- ---------
Cash generated from operations 7,568 775
Income taxes paid (1,019) (932)
Interest paid (1,560) (1,896)
------------------------------------------------------- --------- ---------
Net cash from operating activities 4,989 (2053)
------------------------------------------------------- --------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from disposal of property , plant and
equipment 32 -
Shares issued in period 2,459 4
Purchase of intangible assets (1,124) (68)
Purchase of property, plant and equipment (2,652) (3,903)
------------------------------------------------------- --------- ---------
Net cash used in investing activities (1,285) (3,967)
------------------------------------------------------- --------- ---------
CASH FLOW USED IN FINANCING ACTIVITIES
Additional/(Repayment of) borrowings 956 5,540
Repayment of obligations under finance leases (32) (201)
Net cash used in financing activities 924 5,339
------------------------------------------------------- --------- ---------
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 4,628 (681)
------------------------------------------------------- --------- ---------
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period 2,506 3,187
Net movement in cash and cash equivalents 4,628 (681)
------------------------------------------------------- --------- ---------
Cash and cash equivalents at end of period 7,134 2,506
------------------------------------------------------- --------- ---------
Cash and cash equivalents comprise:
Cash 7,134 2,506
Overdrafts - -
------------------------------------------------------- --------- ---------
7,134 2,506
------------------------------------------------------- --------- ---------
Notes to the Financial Statements
12 months ended 31 March 2013
1. Segment reporting
Business segments
The divisional structure reflects the management teams in place
and also ensures all aspects of trading activity have the specific
focus they need in order to achieve our growth plans.
Continuing
R&W Operations Significant Total
12 months ended Napier Garrett Renshaw Scott Haydens Total items Group
31 March 2013 GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------- --------- --------- ------------ ------------- --------- ----------- ----------- ---------
Total Revenue 167,754 31,947 41,113 10,968 25,337 277,119 - 277,119
Revenue - Internal (10,598) (687) (80) - - (11,365) - (11,365)
External Revenue 157,156 31,260 41,033 10,968 25,337 265,754 - 265,754
------------------- --------- --------- ------------ ------------- --------- ----------- ----------- ---------
Operating Profit 4,353 2,151 4,125 166 (417) 10,378 (505) 9,873
Head Office and
consolidation
adjustments - - - - - (2,137) - (2,137)
Net Finance Costs - - - - - (1,560) - (1,560)
Pension Finance
Income - - - - - 84 - 84
------------------- --------- --------- ------------ ------------- --------- ----------- ----------- ---------
Profit/(loss)
before tax 4,353 2,151 4,125 166 (417) 6,765 (505) 6,260
Tax (936) (462) (887) (36) 90 (2,231) - (2,231)
Unallocated Tax - - - - - 764 121 885
------------------- --------- --------- ------------ ------------- --------- ----------- ----------- ---------
Profit/(loss)
after tax as
per comprehensive
statement of
income 3,417 1,689 3,238 130 (327) 5,298 (384) 4,914
------------------- --------- --------- ------------ ------------- --------- ----------- ----------- ---------
Sales between segments are charged at prevailing market
rates.
2. Significant items
12 months 15 months
ended ended
31 March 2013 31 March 2012
GBP'000s GBP'000s
------------------------------------- -------------- --------------
Management restructuring costs (395) (429)
Group re-financing / restructuring
costs (110) (121)
------------------------------------- -------------- --------------
(505) (550)
Taxation credit on significant items 121 113
------------------------------------- -------------- --------------
(384) (437)
------------------------------------- -------------- --------------
During the period the group incurred a number of significant
costs as detailed above. The management restructuring costs reflect
a number of fundamental reorganisations within our operating
divisions during the period. Refinancing costs relate to "break
costs" associated with the refinancing exercise we completed with
PNC our existing provider in December. The group restructuring cost
relate to liquidation of dormant subsidiaries necessary to simplify
the group structure.
3.Taxation
12 months 15 months
ended ended
31 March 2013 31 March 2012
GBP'000s GBP'000s
----------------------------------------------- -------------- --------------
Current tax
UK Current tax on profit of the period 1,404 1,102
UK Current tax on significant items (121) (113)
Adjustments in respect of prior years (59) (98)
----------------------------------------------- -------------- --------------
Total current tax 1,224 891
----------------------------------------------- -------------- --------------
Deferred tax
Deferred tax charge re pension scheme 58 101
Origination and reversal of timing differences 114 36
Adjustments in respect of prior years 49 45
Deferred tax asset re losses brought forward - -
Adjustment in respect of change in deferred
tax rate (99) (327)
----------------------------------------------- -------------- --------------
Total deferred tax 122 (145)
----------------------------------------------- -------------- --------------
Tax on profit on ordinary activities 1,346 746
----------------------------------------------- -------------- --------------
Taxation (continued)
Factors affecting tax charge for the period:
The tax assessed for the period is lower (2012 - lower) than the
standard rate of corporation tax in the UK 24 % (2012 - 26.39%).
The differences are explained below:
12 months 15 months
ended ended
31 March 2013 31 March 2012
GBP'000s GBP'000s
------------------------------------------------- -------------- --------------
Tax reconciliation
Profit per accounts before taxation 6,260 4,360
Tax on profit on ordinary activities at standard
CT rate of 24% (2012 - 26.39%) 1,502 1,150
Expenses not deductible for tax purposes 16 48
Additional deduction for R&D expenditure (18) (64)
Share option relief (39) -
Temporary difference movements at lower tax
rate - (9)
Adjustment in respect of change in deferred
tax rate (102) (327)
Adjustments to tax in respect of prior years (13) (52)
------------------------------------------------- -------------- --------------
Tax charge for the period 1,346 746
------------------------------------------------- -------------- --------------
4. Earnings per share
Basic earnings per share
Basic earnings per share is calculated on the basis of dividing
the profit/(loss) attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares in issue
during the year.
12 months 15 months
ended ended
31 March 2013 31 March 2012
Continuing Continuing
operations operations
-------------------------------------------- -------------- --------------
Earnings after tax attributable to ordinary
shareholders (GBP000's) 4,914 3,614
Weighted average number of shares in issue
(000's) 68,405 65,017
-------------------------------------------- -------------- --------------
Basic earnings per share 7.2p 5.6p
-------------------------------------------- -------------- --------------
Earnings per share (continued)
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all potential dilutive ordinary shares. Potential
dilutive ordinary shares arise from share options and warrants. For
these, a calculation is performed to determine the number of shares
that could have been acquired at fair value (determined as the
average annual market share price of the company's shares) based on
the monetary value of the exercise price attached to outstanding
share options. Thus the total potential dilutive weighted average
number of shares considers the number of shares that would have
been issued assuming the exercise of the share options.
12 months 15 months
ended ended
31 March 2013 31 March 2012
Continuing Continuing
operations operations
--------------------------------------------------------- -------------- --------------
Earnings after tax attributable to ordinary shareholders
(GBP'000s) 4,914 3,614
Total potential weighted average number of shares
in issue (000's) 74,111 71,385
--------------------------------------------------------- -------------- --------------
Diluted earnings per share 6.6p 5.1p
--------------------------------------------------------- -------------- --------------
Adjusted earnings per share
An adjusted earnings per share and a diluted adjusted earnings
per share, which exclude significant items, have also been
calculated as in the opinion of the Board this allows shareholders
to gain a clearer understanding of the trading performance of the
Group.
12 months 15 months
ended ended
31 March 2013 31 March 2012
Continuing Continuing
operations operations
--------------------------------------------------------- -------------- --------------
Earnings after tax attributable to ordinary shareholders
(GBP'000s) 4,914 3,614
Add back significant items (note 6) 505 550
Add back tax on significant items (121) (113)
--------------------------------------------------------- -------------- --------------
Adjusted earnings after tax attributable to ordinary
shareholders (GBP'000s) 5,298 4,051
--------------------------------------------------------- -------------- --------------
Weighted average number of shares in issue (000's) 68,405 65,017
--------------------------------------------------------- -------------- --------------
Basic earnings per share 7.8p 6.2p
--------------------------------------------------------- -------------- --------------
Total potential weighted average number of shares
in issue (000's) 74,111 71,385
--------------------------------------------------------- -------------- --------------
Basic diluted earnings per share 7.2p 5.7p
--------------------------------------------------------- -------------- --------------
5. Goodwill
Group
GBP'000s
------------------------------ ---------
Cost
Carried forward 31 March 2012 75,796
Carried forward 31 March 2013 75,796
------------------------------ ---------
Goodwill acquired on business combinations is allocated at
acquisition to the Cash Generating Units that are expected to
benefit from that business combination. Before any recognition of
impairment losses, the carrying amount of goodwill has been
allocated as follows:
31 March 2013 31 March 2012
GBP'000s GBP'000s
---------------------------------------- ------------- -------------
Sugar and Bakery Ingredients divisions* 75,796 75,796
Carried forward 31 March 2013 75,796 75,796
---------------------------------------- ------------- -------------
* The goodwill relating to the Sugar and Bakery Ingredients
Divisions arose out of the single acquisition of Napier Brown Foods
by The Real Good Food Company plc in 2005. It has not been possible
to allocate this goodwill between individual Cash Generating
Units.
The group tests goodwill annually for impairment or more
frequently if there are indications that goodwill may be
impaired.
The recoverable amounts of the Cash Generating Units are
determined from value in use calculations. The key assumptions for
the value in use calculations are those regarding discount rates
and expected changes to selling prices and direct costs.
The rate used to discount the forecast cash flows is the group's
pre-tax weighted average cost of capital of 4.88% (2012 - 7.19%).
The group prepares cash flow forecasts derived from the most recent
financial plans approved by the Board for the next three years and
extrapolates this over a further 16 years at a zero growth rate. A
period of 19 years has been applied as the Directors used this
period to assess the viability of the acquisition when the business
was acquired in 2005. Changes in selling prices and direct costs
are based on past practices and expectations of future changes in
the market. Using these parameters and allowing for disposal income
at the end of this timescale the recoverable amounts exceed the
carrying value by GBP75.8 million. Actual results were 37% above
the forecast cash flows used for the impairment review in the
previous year.
An increase in the group's weighted average cost of capital to
above 14.7% (2012 - 17.11%) would cause the Board to impair the
carrying value of goodwill.
6. Borrowings and capital management
31 March 31 March 31 March 31 March
2013 2013 2012 2012
Group Company Group Company
GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------- --------- --------- --------- ---------
Unsecured borrowings at amortised
cost
Loan notes 2,774 - 2,774 -
Secured borrowings at amortised cost
Bank term loans 8,103 8,103 6,016 6,016
Revolving credit facilities 21,209 - 22,340 1,135
Hire purchase - - 32 32
------------------------------------- --------- --------- --------- ---------
32,086 8,103 31,162 7,183
------------------------------------- --------- --------- --------- ---------
Amounts due for settlement within
12 months 23,032 1,823 24,366 3,161
Amounts due for settlement after 12
months 9,054 6,280 6,796 4,022
------------------------------------- --------- --------- --------- ---------
32,086 8,103 31,162 7,183
------------------------------------- --------- --------- --------- ---------
7. Pensions arrangements
The group operates a defined benefit pension plan in the UK. A
full actuarial valuation was carried out as at 1 April 2009 in
accordance with the scheme funding requirements of the Pensions Act
2004 and the funding of the scheme is agreed between the group and
the trustees in line with those requirements. These in particular
require the surplus/deficit to be calculated using prudent as
opposed to best actuarial assumptions. The actuarial valuation
showed a deficit of GBP5.3 million. However a further actuarial
review was undertaken as at 31 March 2010 which revealed that the
deficit had reduced to GBP2.7 million. This was a result of the
recovery of the stock markets from the low in 2009 and improvements
in gilt yields and discount rates. On the basis of this valuation
the group agreed with the trustees that it will eliminate the
GBP2.7 million deficit over a period of 11 years and 9 months from
1 April 2009 by the continuation of contributions of GBP8,145 per
month up to 31 July 2010, increasing to GBP12,000 per month between
1 August and 31 December 2010, GBP130,000 per annum in 2011,
GBP155,000 per annum in 2012 and GBP265,000 per annum thereafter.
In addition and in accordance with the actuarial valuation, the
group has agreed with the trustees that it will meet the expenses
of the scheme and levies to the Pension Protection Fund, along with
further deficit contributions contingent on the group's year end
cash position relative to its banking covenants.
For the purposes of IAS 19 the data provided for the 1 April
2009 Actuarial valuation has been approximately updated to reflect
liabilities on the accounting basis at 31 March 2013. This has
resulted in a deficit in the scheme of GBP3,540,000.
It is the policy of the company to recognise all actuarial gains
and losses in the year in which they occur in the statement of
comprehensive income.
Present values of defined benefit obligations, fair value of
assets and deficit
31 March 31 March 31 December 31 December 31 December
2013 2012 2010 2009 2008
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------------- --------- --------- ----------- ----------- -----------
Present value of defined
benefit obligation 19,153 17,085 16,212 15,945 15,094
Fair value of plan assets (15,613) (16,005) (16,308) (15,363) (14,830)
---------------------------------- --------- --------- ----------- ----------- -----------
Deficit/(surplus) in plan 3,540 1,080 (96) 582 264
Amount not recognised in
accordance with IAS 19 paragraph
58b - - 96 - -
Gross amount recognised 3,540 1,080 - 582 264
Deferred tax at 23% (2012-24%) (814) (259) - (163) (74)
---------------------------------- --------- --------- ----------- ----------- -----------
Net liability 2,947 821 - 419 190
---------------------------------- --------- --------- ----------- ----------- -----------
Pensions arrangements (continued)
Reconciliation of opening and closing balances of the present
value of the defined benefit obligations
31 March 2013 31 March 2012
GBP'000s GBP'000s
--------------------------------------------------- ------------- -------------
Defined benefit obligation at start of period 17,085 16,212
Interest cost 816 1,132
Actuarial losses 2,805 611
Benefits paid, death in service insurance premiums
and expenses (1,553) (870)
--------------------------------------------------- ------------- -------------
Defined benefit obligation at end of period 19,153 17,085
--------------------------------------------------- ------------- -------------
Reconciliation of opening and closing balances of the fair value
of plan assets
12 months 15 months
ended ended
31 March 2013 31 March 2012
GBP'000s GBP'000s
--------------------------------------------------- -------------- --------------
Fair value of scheme assets at start of the
period 16,005 16,308
Expected return on scheme assets 900 1,374
Actuarial (losses)/gains 74 (984)
Contributions paid by the Group 187 177
Benefits paid, death in service insurance premiums
and expenses (1,553) (870)
--------------------------------------------------- -------------- --------------
Fair value of scheme assets at end of the period 15,613 16,005
--------------------------------------------------- -------------- --------------
The actual return on the scheme assets over the period ended 31
March 2013 was GBP974,000 (2012 - GBP390,000).
Pensions arrangements (continued)
Total expense recognised in the statement of comprehensive
income within other finance income
12 months 15 months
ended ended
31 March 2013 31 March 2012
GBP'000s GBP'000s
--------------------------------- -------------- --------------
Interest on liabilities 816 1,132
Expected return on scheme assets (900) (1,374)
--------------------------------- -------------- --------------
Total income (84) (242)
--------------------------------- -------------- --------------
Statement of recognised income and expenses
12 months 15 months
ended ended
31 March 2013 31 March 2012
GBP'000s GBP'000s
---------------------------------------------------- -------------- --------------
Difference between expected and actual return
on scheme assets: gain / (loss) 74 (984)
Experience gains and losses arising on the
scheme liabilities: gain / (loss) (1,923) (46)
Effects of changes in the demographic and financial
assumptions underlying the present value of
the scheme liabilities: (loss) (882) (565)
Reversal of the limit under IAS 19 paragraph
58b - 96
---------------------------------------------------- -------------- --------------
Total amount recognised in statement of changes
in equity (2,731) (1,499)
---------------------------------------------------- -------------- --------------
Assets
31 March 31 March 31 December 31 December
2013 2012 2010 2009
GBP'000s GBP'000s GBP'000s GBP'000s
-------------- --------- --------- ----------- -----------
Equities 8,224 9,615 10,779 10,274
-------------- --------- --------- ----------- -----------
Bonds & Gilts 4,641 4,915 3,990 3,919
-------------- --------- --------- ----------- -----------
Property 390 434 408 449
-------------- --------- --------- ----------- -----------
Cash 2,358 1,041 1,131 721
-------------- --------- --------- ----------- -----------
Total assets 15,613 16,005 16,308 15,363
-------------- --------- --------- ----------- -----------
None of the fair values of the assets shown above include any of
the group's own financial instruments or any property occupied by,
or other assets used by, the group.
Pensions arrangements (continued)
Assumptions
31 March 31 March 31 December 31 December
2013 2012 2010 2009
% per annum % per annum % per annum % per annum
-------------------------------------- ------------ ------------ ------------ ------------
Inflation 3.20 2.90 3.10 3.10
-------------------------------------- ------------ ------------ ------------ ------------
Salary increases - - - -
-------------------------------------- ------------ ------------ ------------ ------------
Rate of discount 4.70 5.00 5.70 6.00
-------------------------------------- ------------ ------------ ------------ ------------
Allowance for pension in payment
increases of RPI or 5% p.a. if less 3.10 2.80 3.10 3.10
-------------------------------------- ------------ ------------ ------------ ------------
Allowance for revaluation of deferred
pensions of RPI or 5% if less 1.90 1.90 3.10 3.10
-------------------------------------- ------------ ------------ ------------ ------------
Allowance for commutation of pension 75% of max 75% of max 75% of max 50% of max
for cash at retirement allowance allowance allowance allowance
-------------------------------------- ------------ ------------ ------------ ------------
Assumption Change in assumption Change in liability
---------------------- ------------------------- ---------------------
Discount rate Increase/decrease of Decrease/increase by
Rate of inflation 0.5% p.a. 7.6%
Rate of Salary Growth Increase/decrease of Increase/decrease by
Rate of mortality 0.5% p.a. 2.3%
Increase/decrease of Increase/decrease by
0.5% p.a. 0.0%
1 year increase in life Increase by 3.7%
expectancy
---------------------- ------------------------- ---------------------
The mortality assumptions adopted at 31 March 2013 imply the
following life expectancies:
Male retiring at age 65 in 2013 21.8 years
--------------------------------- ----------
Female retiring at age 65 in 2013 24.0 years
--------------------------------- ----------
Male retiring at age 65 in 2033 22.7 years
--------------------------------- ----------
Female retiring at age 65 in 2033 25.2 years
--------------------------------- ----------
The long term expected rate of return on cash is determined by
reference to UK long dated government bond yields at the balance
sheet date. The long term expected return on bonds is determined by
reference to UK long dated government and corporate bond yields at
the balance sheet date. The long term expected rate of return on
equities is based on the rate of return on bonds with an allowance
for out-performance.
Pensions arrangements (continued)
Expected long term rates of return
The expected long term rates of return applicable at the start
of each period are as follows:
31 March 2013 31 March 2012 31 December 2010 31 December 2009
% per annum % per annum % per annum % per annum
------------------- ------------- ------------- ---------------- ----------------
Equities 7.65 7.55 7.50 6.90
Bonds 4.10 4.60 5.60 5.64
Property 7.65 7.55 6.50 5.90
Cash 0.50 0.50 4.20 3.50
Overall for scheme 5.38 5.87 6.83 6.29
------------------- ------------- ------------- ---------------- ----------------
31 March 31 March 31 December 31 December 31 December
2013 2012 2010 2009 2008
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------- --------- --------- ----------- ----------- -----------
Fair value of assets 15,613 16,005 16,308 15,363 14,830
Defined benefit obligation (19,153) (17,085) (16,212) (15,945) (15,094)
---------------------------- --------- --------- ----------- ----------- -----------
Surplus/(deficit) in scheme (3,540) (1,080) 96 (582) (264)
---------------------------- --------- --------- ----------- ----------- -----------
Experience adjustment on
scheme assets 74 (984) 578 113 (3,937)
Experience adjustment on
scheme liabilities (1,923) (46) 387 18 (114)
---------------------------- --------- --------- ----------- ----------- -----------
Audit Status
The preliminary announcement has been prepared under the
historical cost convention, on a going concern basis and in
accordance with the recognition and measurement principles of
International Financial Reporting Standards and IFRIC
interpretations as adapted by the EU ("IFRS"), but this
announcement does not in itself contain sufficient information to
comply fully with IFRS.
The directors have considered the working capital requirements
of the group for a period of one year from the date of this
announcement and believe that the going concern basis is
appropriate due to the current cash balance and future
prospects.
The preliminary announcement has been prepared on the basis of
the same accounting policies as published in the audited financial
statements of the group for the period ended 31 March 2012 and the
accounting policies adopted in the audited financial statements of
the group for the period ended 31 March 2013.
Comparative figures for the year ended 31 March 2012 have been
extracted from the statutory financial statements for that period
which carried an unqualified audit report, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis and did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006.
The financial information in this announcement does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006.
The audited statutory financial statements for the period ended
31 March 2013, which have not yet been delivered to The Registrar
of Companies, contain an unqualified audit report, do not include a
reference to any matters to which the auditor might draw attention
by way of emphasis and do not contain a statement under section
498(2) or 498(3) of the Companies Act 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FAMPTMBMTBJJ
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