TIDMRNWH
RNS Number : 8011D
Renew Holdings PLC
22 May 2012
22 May 2012
Renew Holdings plc
("Renew" or the "Group")
Interim results
Renew (AIM: RNWH), the Engineering Services Group supporting UK
infrastructure, announces record interim results for the six months
ended 31 March 2012 with growth in revenue, operating profit and
operating margin. The interim dividend is increased by 5% to 1.05p
(H1 2011: 1.00p). Engineering Services now accounts for 58% of the
Group revenue (H1 2011: 46%) and 82% (H1 2011: 72%) of operating
profits, prior to central costs.
Financial Highlights
H1 2012 H1 2011
Revenue GBP183.7m GBP155.5m +18%
Adjusted operating profit* GBP4.7m GBP2.2m +108%
Operating margin 2.5% 1.4% +79%
Adjusted profit before
tax* GBP4.4m GBP2.3m +95%
Reported profit before
tax GBP4.2m GBP0.6m +624%
Adjusted earnings per
share* 5.45p 3.11p +75%
Interim Dividend per share 1.05p 1.00p +5%
* Pre-exceptional items and amortisation charges
Operational Highlights
-- Engineering Services revenue up 49% to GBP106.5m (H1 2011: GBP71.3m)
-- Engineering Services operating profit up 88% to GBP4.5m (H1 2011: GBP2.4m)
-- Engineering Services order book up 40% to GBP229m (H1 2011: GBP164m)
-- Group revenue fully secured for the remainder of the financial year
-- Net debt reduced to GBP6.9m (H1 2011: GBP10.3m)
R J Harrison OBE, Chairman said: "We have made excellent
strategic progress and in doing so delivered record interim
results. Our conservatively accounted forward order book gives good
visibility for future revenue and we continue to secure new
positions on key frameworks in our target markets. The Board
expects further progress in revenue, operating profit and margin in
the second half of the financial year."
Enquiries:
Renew Holdings plc Tel: 0113 281 4200
Brian May, Chief Executive
John Samuel, Group Finance
Director
N+1 Brewin Tel: 0845 213 4730
Sandy Fraser / Richard Lindley
Walbrook PR Tel: 020 7933 8780
Paul McManus (Media Relations) Mob: 07980 541 893 or paul.mcmanus@walbrookpr.com
Paul Cornelius (Investor Mob: 07827 879 496 or paul.cornelius@walbrookir.com
Relations)
About Renew Holdings plc
Engineering Services, which now accounts for nearly 60% of Group
revenue and over 80% of operating profit, focuses on the key
markets of Energy (including Nuclear), Environmental and
Infrastructure, which are largely governed by regulation and
benefit from non-discretionary spend with long-term visibility of
committed funding.
Specialist Building focuses on New Build Social Housing, High
Quality Residential and Retail markets in the South of England.
The Group has 75 framework agreements; 62 of these are in
Engineering Services with 43 of those being non-discretionary in
nature.
For more information please visit the Renew Holdings plc
website: www.renewholdings.com
Chairman's Statement
The first half of 2012 has seen record interim results with the
Group achieving growth in revenue, operating profit and operating
margin. Group operating profit, prior to amortisation and
exceptional charges, more than doubled to GBP4.7m in the period
(2011: GBP2.2m), on revenue up 18% to GBP183.7m (2011: GBP155.5m).
Operating margin grew by 79% to 2.5% (2011: 1.4%). Adjusted
earnings per share grew by 75% to 5.45p (2011: 3.11p).
The Board is increasing the interim dividend by 5% to 1.05p per
share (2011: 1.00p) which will be paid on 9 July 2012 to
shareholders on the register at 8 June 2012.
The Group's cash balance was GBP3.1m (2011: GBP4.7m) with net
debt reduced to GBP6.9m (2011: GBP10.3m). The Board expects to
reduce net debt further in the second half of the financial
year.
Renew's established strategy is to grow its Engineering Services
activities both organically and with selective acquisitions. The
acquisition of Amco in February 2011 has contributed to an increase
in Engineering Services revenue of almost 50% to GBP106.5m (2011:
GBP71.3m) which now accounts for 58% of Group revenue (2011: 46%)
and 82% (2011: 72%) of operating profits, prior to central costs.
Amco continues to deliver financial performance in line with our
expectations at the time of the acquisition.
The Group's order book at 31 March 2012 was GBP304m (2011:
GBP334m). The reduction from one year ago is due to the Group's
decision to exit from non-specialist building activities in the
North. Our Specialist Building business is now concentrated on
target markets in the South where we have both an established
market position and expertise. The Engineering Services order book
is 40% higher than one year ago at GBP229m (2011: GBP164m). In the
last six months, the Group has increased its number of framework
agreements by 20% to 75. Of these, 62 are in Engineering Services,
with 43 of those being non-discretionary in nature. The value of
potential future work which may arise from our 32 project
frameworks is not included in the order book. The Group's revenue
is fully secured for the remainder of the financial year.
The UK's infrastructure is supported by essential ongoing
programmes of non-discretionary maintenance and enhancement, many
underpinned by regulatory requirements. Renew's focus on these
programmes in its target Engineering Services markets of Energy,
Environmental and Infrastructure reinforces the Group's resilience
in the current difficult economic climate. The Board remains
confident that Renew's robust market position will enable operating
profit to continue to improve, driven by growth in both revenue and
margin.
R J Harrison OBE
Chairman 22 May 2012
Chief Executive's Review
The Group has continued to grow its provision of Engineering
Services which maintain and develop critical areas of UK
infrastructure in the Energy, Environmental and Infrastructure
markets and has increased both revenue and profitability. These
Engineering Services are delivered by our multidisciplinary
workforce employed by our strong local and independently branded
operating businesses.
Our Specialist Building activities are concentrated on
established, resilient and sustainable markets in the South and the
Group has also increased profitability and improved operating
margins in this business segment.
Engineering Services
Renew targets markets where non-discretionary spending is driven
mainly by regulatory requirements giving good visibility of work
and security of funding. During the first half of the year,
Engineering Services revenue was GBP106.5m (2011: GBP71.3m), an
increase of 49%. Operating profit increased by 88% to GBP4.5m
(2011: GBP2.4m) with the operating margin up 24% at 4.2% (2011:
3.4%).
The Engineering Services order book at 31 March 2012 increased
by 40% to GBP229m (2011: GBP164m) compared to one year ago and by
28% compared to 30 September 2011. Engineering Services represents
75% of the Group's order book with 61% generated through
non-discretionary frameworks. The order book beyond the current
financial year is over GBP120m which provides strong visibility of
future revenue.
Energy
Renew operates nationally across the nuclear, gas, coal, wind,
hydro and biomass energy generation sectors. Work is accessed
mainly under the Group's 25 framework agreements, 18 of which are
for non-discretionary engineering maintenance works.
Renew remains the largest mechanical and electrical contractor
at Sellafield, where over 50% of the Nuclear Decommissioning
Authority's annual budget of GBP3bn is deployed. Demand has
increased in a number of areas at the site where work is delivered
principally through 7 framework agreements including the Multi
Discipline Site Wide framework, the Decommissioning framework and a
number of service and spares support agreements.
In addition to these long standing arrangements, we have
recently secured appointments to a number of new frameworks:
-- The Sellafield Retrievals and Decommissioning framework
provides multidisciplinary support to decommissioning
operations.
-- The Bulk Sludge Retrieval framework is associated with the
high hazard reduction programme with revenue expected to be around
GBP26m over 4 years.
-- The Site Wide Asset Care contract is a 4 year agreement under
which we provide a broad range of mechanical and electrical support
services.
-- The National Nuclear Laboratory 3 year framework for ME&I
site services at Sellafield was confirmed earlier this year and
work has now commenced.
On the major project programmes at Sellafield, work is ongoing
on the Evaporator D, Encapsulated Product Store and Separation Area
Ventilation schemes. Successfully completed projects include the
Receipt and Storage facility, a critical project for Sellafield
Ltd.
Additionally, the Group undertakes work currently at 8 other
nuclear licenced sites across the UK. At Springfields, good
progress is being made on a major decommissioning project. The
framework contract for Magnox at Wylfa has been successfully
renewed for a further 3 years. We also continue to support the
consortia involved in the nuclear new build programme.
Long term maintenance and refurbishment works are undertaken at
traditional and renewable energy sites across the UK. In
renewables, a number of opportunities have been identified and we
have been appointed to 2 hydroelectric generation framework
agreements with Scottish Water and Welsh Water where design works
are underway.
Environmental
Our operations in the Environmental sector are underpinned by 22
framework agreements.
In Water, we have 6 frameworks with Northumbrian Water. We
continue to undertake schemes through our longstanding wastewater
project framework and contracts at Kilton Beck and Longbenton have
been successfully completed in the period. We are seeing increased
workload from our 5 non-discretionary maintenance frameworks which
cover sewer maintenance, strategic water mains maintenance and
trunk mains cleansing.
In Land Remediation, we were reappointed to National Grid's
frameworks for gasworks remediation on a national basis. These
frameworks are for an initial period of 3 years with an option to
extend for a further 2 years. They have an anticipated spend of
more than GBP30m per annum and comprise both of the design and
build frameworks, North and South, along with a nationwide small
works framework.
Our work for the Environment Agency continues through 7 minor
works and river maintenance framework agreements including 2 new
appointments in the South East, providing civil, mechanical and
electrical services. We were also recently appointed to the
Environment Agency's National Contaminated Land Remediation
Contractors framework.
Our ongoing maintenance works continue for Cleveland Potash and
a new framework agreement for service provision has extended our
long standing relationship with this client for whom we are also
currently carrying out a major shaft repair project.
Infrastructure
The Group continues to provide civil, mechanical and electrical
engineering services across the UK rail network through 11
framework agreements. Our focus is on infrastructure renewal,
enhancements and maintenance and Amco is a leading provider of
engineering maintenance works nationally to Network Rail.
In the period, works have been undertaken for Network Rail on
the Building and Civils Delivery Partnership frameworks and the
National Electrification & Plant framework. Our asset
management frameworks with Network Rail have been renewed for a
further 3 year period with 2 year extension options. In addition,
we have secured a new framework appointment for Asset Management in
Scotland.
Projects completed in the period for Network Rail include major
repair works at the Ore Tunnel near Hastings, utilising Amco's
market leading expertise in tunnel refurbishment.
Specialist Building
Specialist Building activity continues in the South where work
is focused on New Build Social Housing, High Quality Residential
and Retail markets which provide ongoing sustainable opportunities.
Specialist Building revenue was GBP76.8m (2011: GBP83.1m) with an
operating profit of GBP1.0m (2011: GBP0.9m) at an improved margin
of 1.3% (2011: 1.1%). The forward order book stood at GBP75m (2011:
GBP170m).
In New Build Social Housing, opportunities remain strong in the
South East where the Group has 13 frameworks with a number of
leading housing associations. Recent awards include projects for
Notting Hill Home Ownership, The Peabody Trust and London &
Quadrant Housing Association.
High Quality Residential work is undertaken in London and the
surrounding counties most of which requires the provision of
technically challenging temporary engineering works. Major projects
in Mayfair and Belgravia have been successfully completed in the
period. Opportunity levels remain good with awards recently
received for projects in Wentworth, Wimbledon and Chelsea.
In Retail, we continue to carry out projects for longstanding
clients Tesco and Cine-UK. In addition, further work has been
secured for new clients including Odeon Cinemas.
Strategy
The Group's growth strategy is to increase revenue in
Engineering Services and concentrate activities on the renewal,
refurbishment and maintenance of operational assets in markets with
strong regulatory drivers which provide good visibility of
sustainable earnings. We continue to explore opportunities to
increase the skills and expertise of the Group in Engineering
Services through acquisitions with attractive and sustainable
margins.
Brian May
Chief Executive
22 May 2012
Group income
statement
for the six months
ended
31 March 2012
Exceptional
Before Exceptional items
exceptional items and
items and Before amortisation
and amortisation exceptional of
amortisation of intangible items intangible
of assets and assets
intangible (see amortisation (see
assets Note of intangible Note
3) assets 3)
Six months
ended Year ended
31 March 30 September
Note 2011 2011 2011
Audited Audited Audited
2012 2012 2012 *2011 GBP000 GBP000 GBP000
Unaudited Unaudited Unaudited Unaudited
GBP000 GBP000 GBP000 GBP000
Group revenue from
continuing
activities 2 183,709 - 183,709 155,477 356,667 - 356,667
Cost of sales (162,482) - (162,482) (137,762) (322,679) - (322,679)
------------- --------------- ------------- ---------- ----------------- ------------- ------------
Gross profit 21,227 - 21,227 17,715 33,988 - 33,988
Administrative
expenses (16,570) (250) (16,820) (17,174) (26,187) (5,651) (31,838)
------------- --------------- ------------- ---------- ----------------- ------------- ------------
Operating profit 2 4,657 (250) 4,407 541 7,801 (5,651) 2,150
Finance income 35 - 35 114 167 - 167
Finance costs (307) - (307) (99) (387) - (387)
Other finance
income -
defined benefit
pension
schemes 59 - 59 23 530 - 530
------------- --------------- ------------- ---------- ----------------- ------------- ------------
Profit before
income tax 2 4,444 (250) 4,194 579 8,111 (5,651) 2,460
Income tax expense 4 (1,180) 63 (1,117) (280) (2,375) 1,220 (1,155)
------------- --------------- ------------- ---------- ----------------- ------------- ------------
Profit for the
period
attributable to
equity
holders of the
parent
company 3,264 (187) 3,077 299 5,736 (4,431) 1,305
------------- --------------- ------------- ---------- ----------------- ------------- ------------
Basic earnings per
share 5 5.14p 0.50p 2.18p
Diluted earnings
per share 5 4.95p 0.48p 2.10p
------------- ---------- ------------
Proposed dividend 6 1.05p 1.00p 2.00p
------------- ---------- ------------
Group statement of comprehensive income Six months ended Year ended
for the six months
ended
31 March 2012 31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the
period
attributable to
equity
holders of the
parent
company 3,077 299 1,305
Exchange movement
in
reserves (317) (200) 123
Movements in
actuarial
deficit - - (5,265)
Movement on
deferred
tax relating to
the defined
benefit pension
schemes - - 1,382
-------------- ------------ ------------------------
Total
comprehensive
income
for the period
attributable
to equity holders
of
the parent
company 2,760 99 (2,455)
-------------- ------------ --- -------------------
Group statement of changes in equity
for the six months ended 31 March 2012
Called Share Capital Cumulative Share based Retained Total
up
share premium redemption translation payments earnings equity
capital account reserve adjustment reserve Unaudited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2010 5,990 5,893 3,896 1,059 217 (3,893) 13,162
Transfer from income
statement for the
period 299 299
Dividends paid (1,196) (1,196)
Recognition of share
based payments 36 36
Exchange differences (200) (200)
-------- -------- ----------- ------------ ------------ --------- ----------
At 31 March 2011 5,990 5,893 3,896 859 253 (4,790) 12,101
Transfer from income
statement for the
period 1,006 1,006
Dividends paid (601) (601)
Recognition of share
based payments 30 30
Exchange differences 323 323
Actuarial losses
recognised in pension
schemes (5,265) (5,265)
Movement on deferred
tax relating to
the pension schemes 1,382 1,382
-------- -------- ----------- ------------ ------------ --------- ----------
At 30 September
2011 5,990 5,893 3,896 1,182 283 (8,268) 8,976
Transfer from income
statement for the
period 3,077 3,077
Dividends paid (1,196) (1,196)
Recognition of share
based payments (10) (10)
Exchange differences (317) (317)
-------- -------- ----------- ------------ ------------ --------- ----------
At 31 March 2012 5,990 5,893 3,896 865 273 (6,387) 10,530
-------- -------- ----------- ------------ ------------ --------- ----------
Group balance sheet
at 31 March 2012
31 March 30 September
2012 2011 2011
(Restated*) (Restated*)
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Non-current assets
Intangible assets
-goodwill 27,727 27,727 27,727
-other 2,500 3,000 2,750
Property, plant
and equipment 4,567 4,817 4,805
Retirement benefit
assets 2,925 3,284 1,089
Deferred tax assets 2,909 3,547 3,069
---------- ------------ -------------
40,628 42,375 39,440
---------- ------------ -------------
Current assets
Inventories 8,744 8,464 8,918
Trade and other
receivables 86,912 94,814 84,901
Current tax assets 906 295 906
Cash and cash equivalents 3,063 4,670 5,688
99,625 108,243 100,413
---------- ------------ -------------
Total assets 140,253 150,618 139,853
---------- ------------ -------------
Non-current liabilities
Borrowings (5,000) (10,000) (7,500)
Obligations under
finance leases (345) (246) (369)
Retirement benefit
obligations (119) - (119)
Deferred tax liabilities (1,469) (1,581) (1,091)
Provisions (566) (424) (566)
---------- ------------ -------------
(7,499) (12,251) (9,645)
---------- ------------ -------------
Current liabilities
Borrowings (5,000) (5,000) (5,000)
Trade and other
payables (115,862) (119,916) (115,544)
Obligations under
finance leases (386) (125) (291)
Current tax liabilities (810) (217) (231)
Provisions (166) (1,008) (166)
(122,224) (126,266) (121,232)
---------- ------------ -------------
Total liabilities (129,723) (138,517) (130,877)
Net assets 10,530 12,101 8,976
---------- ------------ -------------
Share capital 5,990 5,990 5,990
Share premium account 5,893 5,893 5,893
Capital redemption
reserve 3,896 3,896 3,896
Cumulative translation
adjustment 865 859 1,182
Share based payments
reserve 273 253 283
Retained earnings (6,387) (4,790) (8,268)
---------- ------------ -------------
Total equity 10,530 12,101 8,976
---------- ------------ -------------
* Details of the restated balance sheets are set out in Note
7.
Group cashflow statement
for the six months ended 31
March 2012
Six months ended Year ended
31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period 3,077 299 1,305
Amortisation of intangible assets 250 154 404
Depreciation 530 527 1,159
(Profit)/loss on sale of property,
plant and equipment (98) 25 (25)
Increase in inventories (48) (16) (244)
(Increase)/decrease in receivables (2,151) (1,958) 8,100
Increase/(decrease) in payables 398 5,064 (41)
Current service cost in respect
of defined benefit pension scheme 28 38 56
Cash contribution to defined
benefit schemes (1,836) (1,562) (4,039)
(Credit)/expense in respect
of share options (10) 36 66
Financial income (94) (137) (697)
Financial expenses 307 99 387
Interest paid (307) (99) (387)
Income taxes paid - (417) (523)
Income tax expense 1,117 280 1,155
Net cash inflow from operating
activities 1,163 2,333 6,676
---------- ---------- -------------
Investing activities
Interest received 35 114 167
Proceeds on disposal of property,
plant and equipment 139 1,689 1,782
Purchases of property, plant
and equipment (333) (186) (849)
Acquisition of subsidiary net
of cash acquired - (29,319) (29,319)
Net cash outflow from investing
activities (159) (27,702) (28,219)
---------- ---------- -------------
Financing activities
Dividends paid (1,196) (1,196) (1,797)
New loan - 15,000 15,000
Loan repayments (2,500) - (2,500)
Inception of new leases 240 - 396
Repayment of obligations under
finance leases (169) (8) (115)
---------- ---------- -------------
Net cash (outflow)/inflow from
financing activities (3,625) 13,796 10,984
---------- ---------- -------------
Net decrease in cash and cash
equivalents (2,621) (11,573) (10,559)
Cash and cash equivalents at
the beginning of the period 5,688 16,245 16,245
Effect of foreign exchange rate
changes (4) (2) 2
Cash and cash equivalents at
the end of the period 3,063 4,670 5,688
---------- ---------- -------------
Bank balances and cash 3,063 4,670 5,688
---------- ---------- -------------
NOTES TO THE ACCOUNTS
Note 1 Basis of preparation
(a) This consolidated interim financial report for the six
months ended 31 March 2012 and the equivalent period in 2011 have
not been audited or reviewed by the Group's auditor. They do not
comprise statutory accounts within the meaning of Section 435 of
the Companies Act 2006. They have been prepared under the
historical cost convention and on a going concern basis in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union. This interim financial
report does not comply with IAS 34 "Interim Financial Reporting",
which is not currently required to be applied for AIM companies.
This interim report was approved by the Directors on 22 May
2012.
(b) The accounts for the year ended 30 September 2011 were
prepared under IFRS and have been delivered to the Registrar of
Companies. The report of the auditor on those accounts was
unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under Section 498(2) or (3) of the
Companies Act 2006. In this report, the comparative figures for the
year ended 30 September 2011 have been audited. The comparative
figures for the period ended 31 March 2011 are unaudited.
(c) For the year ending 30 September 2012, there are no new
accounting standards which have been adopted by the EU, applied or
implemented for this interim financial report.
(d) The Directors are satisfied that the Group has adequate
resources to continue in operational existence for the foreseeable
future.
(e) The balance sheets at 31 March 2011 and 30 September 2011
have been restated to reflect hindsight adjustments relating to the
acquisition made in the year ended 30 September 2011. These
adjustments affect retirement benefit assets, accruals, current tax
assets, deferred tax and goodwill.
This interim statement is being sent to all shareholders and is
also available upon request from the Company Secretary, Renew
Holdings plc, Yew Trees, Main Street North, Aberford, West
Yorkshire LS25 3AA, or via the website www.renewholdings.com.
Note 2 Segmental analysis
Operating segments have been identified based on the internal
reporting information provided to the Group's Chief Operating
Decision Maker. From such information, Engineering Services and
Specialist Building have been determined to represent operating
segments.
Six months ended Year ended
31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
Revenue is analysed as follows: GBP000 GBP000 GBP000
Engineering Services 106,549 71,338 176,715
Specialist Building 76,751 83,079 178,902
Inter segment revenue (11) (60) (61)
------------------------ ------------------------------ --------------
Segment revenue 183,289 154,357 355,556
Central activities 420 1,120 1,111
------------------------ ------------------------------ --------------
Group revenue from continuing
operations 183,709 155,477 356,667
------------------------ ------------------------------ --------------
Before
exceptional
items
and
amortisation
of intangible
assets
Six months 2011
ended Audited
31 March GBP000
Before
exceptional Exceptional
items items Exceptional
and and items
amortisation amortisation and
of of amortisation Year
intangible intangible of intangible Ended
assets assets assets 30 September
2012 2012 2012 *2011 2011 2011
Unaudited Unaudited Unaudited Unaudited Audited Audited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
operating
profit
Engineering
Services 4,495 - 4,495 2,397 7,401 (482) 6,919
Specialist
Building 985 - 985 938 1,907 (3,332) (1,425)
------------- ------------- ----------- ----------- -------------- -------------- --------------
Segment
operating
profit 5,480 - 5,480 3,335 9,308 (3,814) 5,494
Central
activities (823) (250) (1,073) (2,794) (1,507) (1,837) (3,344)
------------- ------------- ----------- ----------- -------------- -------------- --------------
Operating
profit 4,657 (250) 4,407 541 7,801 (5,651) 2,150
Net financing
income (213) - (213) 38 310 - 310
------------- ------------- ----------- ----------- -------------- -------------- --------------
Profit before
income
tax 4,444 (250) 4,194 579 8,111 (5,651) 2,460
------------- ------------- ----------- ----------- -------------- -------------- --------------
*Operating profit for the six months ended 31 March 2011 is
after charging GBP1,547,000 exceptional costs and GBP154,000 of
amortisation cost.
Note 3 Exceptional items and amortisation of intangible
assets
Six months ended Year ended
31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Redundancy and restructuring
costs - - 3,680
Amco acquisition costs - 1,347 1,357
Additional provision in
respect of OFT fine - 200 200
Legal fees in connection
with OFT fine - - 10
Total exceptional items - 1,547 5,247
Amortisation of intangible
assets 250 154 404
---------- ---------- -------------
250 1,701 5,651
---------- ---------- -------------
Note 4 Income tax expense
Six months ended Year ended
31 March 30 September
2012 2011 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Current tax:
UK corporation tax on
profits for the period (579) (75) -
Adjustments in respect
of previous periods - - 417
---------- ---------- -------------
Total current tax (579) (75) 417
Deferred tax (538) (205) (1,572)
---------- ---------- -------------
Income tax expense (1,117) (280) (1,155)
---------- ---------- -------------
Note 5 Earnings per share
Year ended 30
Six months ended 31 March September
2012 2011 2011
Unaudited Unaudited Audited
Earnings EPS DEPS Earnings EPS DEPS Earnings EPS DEPS
GBP000 Pence Pence GBP000 Pence Pence GBP000 Pence Pence
Earnings
before
exceptional
costs
and
amortisation 3,264 5.45 5.25 1,865 3.11 2.97 5,736 9.58 9.24
Exceptional
costs
and
amortisation (187) (0.31) (0.30) (1,566) (2.61) (2.49) (4,431) (7.40) (7.14)
----------- ------------ --------- ---------- ------------ -------- --------- -------- -------
Basic
earnings
per share 3,077 5.14 4.95 299 0.50 0.48 1,305 2.18 2.10
----------- ------------ --------- ---------- ------------ -------- --------- -------- -------
Weighted
average
number of
shares 59,899 62,127 59,899 62,803 59,899 62,093
------------ --------- ------------ -------- -------- -------
The dilutive effect of share options is to increase the number
of shares by 2,228,000 (March 2011: 2,904,000; September 2011:
2,194,000) and reduce the basic earnings per share by 0.19p (March
2011: 0.02p; September 2011: 0.08p).
Note 6 Dividends
The proposed interim dividend is 1.05p per share (2011: 1.00p).
This will be paid out of the Company's available distributable
reserves to shareholders on the register on 8 June 2012, payable on
9 July 2012. In accordance with IAS 1, dividends are recorded only
when paid and are shown as a movement in equity rather than as a
charge in the income statement.
Note 7 Acquisition of subsidiary
On 23 February 2011, the Company acquired the whole of the
issued share capital of Amco Group Holdings Limited ("Amco") for a
consideration of GBP27.1m, of which GBP20.9m was paid in cash and
GBP6.2m in deferred consideration.
The value of the assets and liabilities of Amco at the date of
acquisition were:
Fair value
Fair value Hindsight as restated
as reported adjustments at
Book at 31 March
value Adjustments 31 March 2011 2011
GBP000 GBP000 GBP000 GBP000 GBP000
Non-current
assets
Intangible
assets - goodwill - 15,247 15,247 2,922 18,169
-other - 3,000 3,000 - 3,000
Property,
plant and
equipment 1,571 611 2,182 - 2,182
Retirement
benefit assets 2,628 - 2,628 (1,966) 662
Deferred tax
assets 212 52 264 - 264
--------- ------------ --------------- ------------- -------------
4,411 18,910 23,321 956 24,277
--------- ------------ --------------- ------------- -------------
Current assets
Inventories 10 - 10 - 10
Trade and
other receivables 22,945 - 22,945 - 22,945
Current tax
assets - - - 260 260
22,955 - 22,955 260 23,215
--------- ------------ --------------- ------------- -------------
Total assets 27,366 18,910 46,276 1,216 47,492
--------- ------------ --------------- ------------- -------------
Non-current
liabilities
Obligations
under finance
leases (248) - (248) - (248)
Deferred tax
liabilities (736) - (736) (216) (952)
(984) - (984) (216) (1,200)
--------- ------------ --------------- ------------- -------------
Current liabilities
Borrowings (2,266) - (2,266) - (2,266)
Trade and
other payables (15,561) (201) (15,762) (1,000) (16,762)
Obligations
under finance
leases (125) - (125) - (125)
Current tax
liabilities (86) - (86) - (86)
(18,038) (201) (18,239) (1,000) (19,239)
--------- ------------ --------------- ------------- -------------
Total liabilities (19,022) (201) (19,223) (1,216) (20,439)
Net assets 8,344 18,709 27,053 - 27,053
--------- ------------ --------------- ------------- -------------
Fair value adjustments arising from the acquisition
In accordance with IFRS 3, the Board has reviewed the fair value
of assets and liabilities using information available up to 12
months after the date of acquisition.
Retirement benefit assets
The Directors have reviewed the actuarial assumptions adopted by
the previous Board of Amco and decided to adjust the assumptions
used to value pension scheme liabilities. Additionally, more
reliable estimates of the mortality characteristics of the scheme's
membership have been adopted. These assumptions were set out in
Note 24 of the Renew Holdings plc Annual Report 2011. The impact of
this review has been to increase goodwill and reduce the carrying
value of the retirement benefit assets by GBP2.2m after accounting
for deferred tax. These adjustments have required the restatement
of the Group balance sheet as at 31 March 2011.
Accruals
The Directors have reviewed the expected financial outcome in
respect of contracts subsisting at the date of the acquisition and
have accrued an additional GBP1.0m in respect of additional costs
on one contract. The effect of this is to increase goodwill,
accruals and current tax assets by a net GBP0.7m. These adjustments
have required the restatement of the Group balance sheets as at 31
March 2011 and 30 September 2011.
Goodwill impairment review
The Board has also reviewed the goodwill arising on acquisition
for impairment as required by IFRS 3. No such impairment has been
identified.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDUSUDBGDB
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