TIDMROK
RNS Number : 5860X
Rok PLC
18 August 2009
Press release
18 August 2009
Rok plc
Interim results
Rok plc, the property repair and maintenance specialist, announces its results
for the six months ended 30 June 2009.
Financial highlights
+----------------------------------------------------+----------+
| Continuing operations | |
+----------------------------------------------------+----------+
| - Revenue GBP364.5m (2008: GBP546.7m) | -33% |
+----------------------------------------------------+----------+
| - Operating profit* GBP8.9m (2008: | -31% |
| GBP12.9m) | |
+----------------------------------------------------+----------+
| - Operating margins* 2.4% (2008: 2.4%) | 0% |
+----------------------------------------------------+----------+
| - Pre-tax profit GBP6.0m (2008: | -47% |
| GBP11.3m) | |
+----------------------------------------------------+----------+
| - Earnings per share* 3.3p (2008: 4.9p) | -33% |
+----------------------------------------------------+----------+
| - Interim dividend 0.75p (2008: 1.15p) | -35% |
+----------------------------------------------------+----------+
*before intangibles amortisation and exceptional restructuring costs
Operational highlights
+--------------------------------------------------------------------+
| - Successfully implemented strategy to reflect reduced |
| demand |
+--------------------------------------------------------------------+
| - Operating margins maintained on reduced activity |
| levels |
+--------------------------------------------------------------------+
| - Secured number one position in property insurance |
| repairs |
+--------------------------------------------------------------------+
| - Direct delivery model continues to increase margins |
| in response maintenance |
+--------------------------------------------------------------------+
| - Framework wins up 24% on prior year |
+--------------------------------------------------------------------+
| - Total order book* level at GBP2.4bn (2008: GBP2.4bn) |
+--------------------------------------------------------------------+
*includes expected revenues under framework agreements
Commenting on the results, Stephen Pettit, Chairman, said:
"We have taken further steps to reduce our exposure to the higher risk, lower
margin, new build construction activity in recognition of the impact of the
current economic climate on this sector and aligned our cost base swiftly in
order to protect overall operating margins.
"The additional investments we have made in our response maintenance operations
are improving our service which has enabled us to become the market leader in
property insurance repairs. Our customer satisfaction levels are high and we are
being rewarded with increased market share."
On the future prospects of the Group, Stephen Pettit continued:
"The actions we have taken to reshape the business and to focus on our positions
of strength and advantage will carry us through the current difficult climate.
Providing there is no further deterioration in market conditions we remain
confident of achieving our expectations for the year."
Enquiries to:
+------------------------------------------+--------------------------------------+
| Rok plc | www.rokgroup.com |
+------------------------------------------+--------------------------------------+
| Garvis Snook, Group Chief Executive | Tel: 020 7977 7982 |
| | garvis.snook@rokgroup.com |
+------------------------------------------+--------------------------------------+
| Ashley Martin, Group Finance Director | Tel: 020 7977 7984 |
| | ashley.martin@rokgroup.com |
+------------------------------------------+--------------------------------------+
| | |
+------------------------------------------+--------------------------------------+
| Redleaf Communications Ltd | |
+------------------------------------------+--------------------------------------+
| Emma Kane/ Rebecca Sanders-Hewett/ | Tel: 020 7566 6700 |
| Kathryn Hurford | rok@redleafpr.com |
| | |
+------------------------------------------+--------------------------------------+
Notes to Editors:
- Rok plc's shares are listed on the Official List of the London Stock Exchange
under the symbol ROK.
- The Group specialises in low risk, relationship based service delivery
providing, response maintenance, planned repairs and refurbishment and new build
services that are tailored to local needs and customers' wishes supported by the
resources and expertise of one of the industry's leading players.
- Further information on the Group can be accessed at www.rokgroup.com
Financial summary
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| | | 6 months | 6 months | | Change | | Year ended |
| | | ended | ended | | | | 31 |
| | | 30 June | 30 June | | | | December |
| | | 2009 | 2008 | | | | 2008 |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Continuing operations | | | | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Revenue | | | | | -33% | | |
| | | GBP364.5m | GBP546.7m | | | | GBP1,011.2m |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Operating profit* | | GBP8.9m | GBP12.9m | | -31% | | GBP21.5m |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Operating margins* | | 2.4% | 2.4% | | - | | 2.1% |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Profit before tax | | GBP6.0m | GBP11.3m | | -47% | | GBP5.9m |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Profit before tax* | | GBP7.6m | GBP12.4m | | -39% | | GBP20.4m |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Operating cash flow before tax | | | GBP12.6m | | | | |
| | | GBP(14.8)m | | | | | GBP(5.2)m |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| | | | | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Discontinued operation | | | | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Development (loss) after tax | | | | | | | |
| | | GBP(1.7)m | GBP(14.7)m | | | | GBP(18.6)m |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| | | | | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Earnings (loss) per share | | | | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| - Continuing operations | | 2.6p | 4.5p | | -42% | | 2.1p |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| - Continuing operations* | | 3.3p | 4.9p | | -33% | | 8.1p |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| - Continuing and discontinued | | 1.6p | (3.8)p | | +142% | | (8.5)p |
| operations | | | | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Dividend per share | | 0.75p | 1.15p | | -35% | | 2.40p |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
| Net debt | | | GBP | | | | GBP43.7m |
| | | GBP57.0m | 16.7m | | | | |
+---------------------------------+--+------------+------------+--+---------+--+-------------+
* before intangibles amortisation and exceptional restructuring costs
Statement by the Chief Executive, Garvis Snook
I am pleased to report that the Group is making solid progress in line with our
expectations following the scaling back of the business last year in order to
address the fall in demand that was experienced across our industry.
This set of interim results demonstrates that our strategy of delivering
building services in occupied premises with our own directly employed workforce
can continue to prosper in these more challenging economic times. Whilst overall
demand for our services has reduced in the recession, we have been able to
sufficiently flex our cost base to maintain underlying operating margin
performance. During this period we have also successfully resisted the
temptation to look for volume in our new build and planned repairs and
refurbishment operations at the expense of margin, thereby avoiding devaluing
our unique model.
The results should be viewed against a strong set of comparative figures for the
first half of 2008, which were prior to the banking crisis last autumn and the
consequential impact of this on the economy generally and our sector in
particular.
Results
Continuing operations:
Overall Group revenues from continuing operations for the six months ended 30
June 2009 fell by 33% to GBP364.5m (2008: GBP546.7m). The majority of this
reduction was due to the decision made last summer to scale back our new build
construction operations. This was in the face of a tightening market initially
in the private sector and more recently in the public sector together with
increased competition on smaller new build projects. As anticipated, Group
revenue was also affected by a slow first quarter for projects coming forward
under our planned repairs and refurbishment activities.
Group operating profits, before restructuring costs, fell by 31% to GBP8.9m
(2008: GBP12.9m), mirroring the reduction in revenues, and were achieved largely
through the significant and swift actions taken on costs in the last two months
of 2008. Overhead reductions of 15% have been achieved compared with the first
half of 2008. Underlying operating margins at 2.4% were similar to the previous
year. However, we have increased margins in our response maintenance activities
with further improvements in efficiency and utilisation of our directly employed
workforce. We have also continued to invest during the period in this operation,
the benefits of which we anticipate will flow in future years.
In addition to the large scale cost cutting undertaken last year, further
restructuring costs, principally for redundancies, of GBP1.0m have been incurred
in the first half in response to current market conditions. We will continue to
manage our cost base vigorously in the remainder of the year as the difficult
trading conditions persist and as we prepare the business for what we expect
will be a challenging 2010 particularly in the new build construction market.
Finance costs from continuing operations increased from GBP0.5m to GBP1.3m. In
the main this reflects the new banking terms entered into earlier in the year on
the Group's increased borrowings. Net finance charges on the Group's defined
benefit pension schemes also contributed GBP0.4m to the increase arising from
the lower returns generated on pension scheme assets. Finance costs from
continuing operations were covered 5.6 times by operating profits.
Overall profit before tax and before amortisation of intangible assets fell by
47% to GBP6.6m (2008: GBP12.4m). Amortisation of intangible assets reduced from
GBP1.1m to GBP0.6m being the amortisation of brands and order books associated
with acquisitions. Headline profits before tax from continuing activities
reduced by 47% to GBP6.0m (2008: GBP11.3m).
The tax charge of GBP1.5m (2008: GBP3.4m) represents an effective rate of 25%,
down from 30% in 2008, the reduction due principally to non-taxable items. Basic
earnings per share from continuing activities fell by 42% to 2.6p (2008: 4.5p).
Adjusted earnings per share before intangible asset charges and restructuring
costs reduced by 33% to 3.3p (2008: 4.9p).
Discontinued operations:
In June 2008 the Group decided to discontinue its industrial and commercial
property development activities. The current property market continues to
experience difficulties with the lack of financing available to purchasers which
is affecting the Group's ability to dispose of the remaining property portfolio
as planned. A further GBP1.1m of work in progress has been written down in the
period due to contractually committed transactions falling through as a result
of a lack of bank funding for purchasers. Interest costs of funding both the
remaining Development assets and the cumulative losses incurred totalled
GBP1.7m. Net of tax relief, the charge for discontinued operations in the period
was GBP1.7m (2008: GBP14.7m). The final remaining pre-closure commitment to
acquire Development land occurred in July 2009 with a cash outflow of GBP2.3m.
We believe that the commercial property market has now reached the low point in
the cycle but it will take some time to recover before liquidity improves and
surplus stock in the market has been cleared. We have written down the remaining
Development assets to their estimated recoverable amounts but do not believe
shareholder value would be maximised by forcing the realisation of the assets in
the current environment. The written down value of Development land and work in
progress held at 30 June 2009 amounts to GBP21.8m (2008: GBP30.6m). Interest
costs for the funding of the remaining Development assets will continue to be
charged as part of discontinued operations until the assets are realised.
Cash flow and net debt:
Operating cash flow before tax, defined benefit pension contributions and
restructuring costs for the first six months of 2009 was GBP(9.5)m, (2008:
GBP14.5m). The cash absorption is principally the result of the change in
business mix with the planned reduction in our cash positive new build
construction activities. Group net debt at the period end was GBP57.0m (Dec
2008: GBP43.7m) reflecting the changes referred to above. Average net debt
during the period amounted to GBP72.8m compared with GBP65.4m during the second
half of 2008. The Group has committed bank facilities totalling GBP89.5m on a
three-year revolving credit facility expiring in March 2012. The facilities
amortise to reflect Development asset disposals. All banking covenants have been
comfortably met throughout the period.
Dividend
The Board is proposing to pay an interim dividend of 0.75p per share (2008:
1.15p) representing a reduction of 35% on the previous year. This reflects the
Group's policy of adjusting the dividend in line with the change in underlying
earnings per share. The interim dividend is covered 3.5 times by earnings from
continuing operations. The dividend will be paid on 9 October 2009 to members on
the register at 28 August 2009.
Review of operations
The Group's services relate to the provision of response maintenance, planned
repairs and refurbishment and new build activities.
Response maintenance
Operating margins in response maintenance grew to 6.1% (2008: 5.4%) whilst
coping with a 12% drop in revenues to GBP52.7m (2008: GBP59.7m) leaving
operating profits level at GBP3.2m (2008: GBP3.2m).
This drop in revenues was caused in part by local maintenance requirements
falling away in the first quarter which have since recovered to more normal
levels in the second quarter. This was exacerbated by UK insurers experiencing a
25% year on year reduction in property related claims due to benign weather
conditions together with the gradual move by RSA to other sub-contracted
networks. Despite this, our unique direct delivery model is driving higher
customer satisfaction levels and we have increased our market share in this
activity. As a result we are now the largest supplier of domestic property
repairs to UK insurers. Operating margins grew largely due to our continued
focus on improving efficiency and utilisation across our technician population.
Our new contact centre in Mansfield was officially opened in January as we
continued to invest in and expand our national service. In response to customer
demand we are now also able to offer a nationwide 24 hour, 365 days a year
urgent property repair service. This has been influential in attracting a number
of new customers to Rok such as Bracknell Forest Council, Craegmoor Healthcare,
The English National Ambulance Service, Hampshire County Council, Leisure
Connection, The Maritime and Coastguard Agency, Wellingborough Homes and
Wincanton Group Ltd.
We see significant opportunities ahead for our response maintenance business
driven not only by the insurance sector but also by the continuing trend of
outsourcing by major corporates, Government bodies, local authorities and
housing associations. Overall with more stable market conditions now in place
and with such a differentiated and unique market position, we expect this
division to return soon to the growth pattern it has previously enjoyed.
Planned repairs and refurbishment
Revenues from our planned repairs and refurbishment activities reduced by 24% to
GBP151.8m (2008: GBP198.9m) as a number of budgets under frameworks were
deferred or cancelled as a continuation of what we experienced last autumn
spilling over into the first quarter of 2009. Whilst volumes have increased in
the second quarter, there is evidence that planned repair budgets in social
housing are being reduced in favour of building new social housing. Operating
margins have remained level with last year at 4.7% and as a result, overall
operating profits in the first half reduced by 23% to GBP7.2m (2008: GBP9.4m).
We expect private sector demand for planned repairs and refurbishments to start
to increase as organisations improve existing facilities rather than relocate to
new.
During the period we continued to take advantage of the cost, quality,
efficiency and enhanced customer satisfaction benefits of delivering more
plumbing heating and electrical services (PHE) in-house and diverting spending
away from sub-contractors. There is still ample opportunity for further
expansion of this activity as we currently deliver less than 30% of our own PHE
work, primarily in Scotland and the north of England, and are actively
recruiting elsewhere.
Whilst the market for planned repairs has reduced overall and competition has
increased, the strength of our direct delivery service model is attracting new
customers who recognise the benefits that derive from a simplified supply chain.
In the first half of this year we have secured new framework contracts with
Bristol City Council, Cardiff Council, City West Housing Trust, Jephson Housing
Association Group, One Vision Housing, NE Procurement Ltd, Somer Housing Group,
Teign Housing and Wigan & Leigh Housing.
New build
Challenging market conditions continued to prevail throughout the period in the
new build construction market which are likely to deteriorate still further into
2010. Demand for new build non-housing construction services in the UK is down
more than 50% year on year (source: Office of National Statistics). Attempting
to maintain revenues in this climate necessitates cutting prices which can only
be sustained in the short term whilst sub-contractors and suppliers are prepared
to accept very low returns. This is not sustainable. When market growth resumes,
the supply chain will find more profitable work elsewhere. As a result, our
strategy is to allow this division to reduce its activities to a level that is
some 50% below where it was 18 months ago whilst we await the return of more
normal market conditions. Once stable market conditions return, we will position
the business for controlled growth. Whilst we recognise the negative impact this
strategy has on our short term cash balances, we need to insulate against the
medium term financial risk to our business of chasing revenues which would be
far greater.
We have therefore scaled back both the number of branches undertaking new build
non-housing construction activities and the overall level of activity we
undertake. Revenues as a result fell by 44% to GBP160.0m (2008: GBP288.1m).
Operating profits fell significantly from GBP2.8m to GBP0.5m, with operating
margins falling from 1.0% to 0.3%. This was due primarily to poor contract
performance in an acquired company arising from pre-acquisition events in excess
of fair value adjustments recognised at the time of purchase. Operating margins,
excluding the impact of this issue, were similar to the previous year.
We maintained our premier position as a major supplier to the new build social
housing sector under a large number of framework arrangements. These frameworks
currently give medium-term visibility of approximately GBP1.5bn of future
revenues. Whilst volumes under these dipped in the first quarter we have seen an
increase in demand since the start of the second with the Government's stimulus
packages being turned into work on the ground by the Homes and Communities
Agency (HCA).
We expect the HCA's activities to drive increasing volumes of rented sector
housing for the remainder of this year, into 2010 and beyond. We intend that Rok
should remain a leading player in this market and as part of this are actively
pursuing a number of PFI funded schemes where we are again uniquely placed to
deliver response maintenance, planned repair and new build services through one
organisation and largely with our own tradespeople.
New customer awards totalled GBP360m during the period including Circle Anglia
Ltd, City West Housing Trust, Construction Frameworks South West, Firebird JVC,
Guinness Trust, Midland Heart, Moat Housing Group, Wigan & Leigh Housing and
Your Homes Newcastle.
Frameworks, order books and pipeline
In the first six months of 2009 we have continued to secure our position on a
number of frameworks which, despite the current downturn, should continue to
provide a reliable source of future revenue for the Group. We have been awarded
27 new frameworks in the six months to June 2009 of which our anticipated share
of future revenues is GBP495m (2008: GBP400m). At 30 June 2009 we had a total of
160 (2008:121) frameworks signed with a future revenue expectation of GBP2.2bn
(2008: GBP2.0bn). Much of this is in the social housing, education and insurance
sectors where our local delivery coupled with national scale is continuing to
attract new customers. The secured order book at 30 June 2009 totalled GBP420m
(2008: GBP600m) which is in line with our lower activity levels. Taking
frameworks into account 94% of anticipated 2009 revenues are secured together
with some 80% of 2010.
The pipeline of future work opportunities remains strong and we are currently
engaged in the selection process for 170 new frameworks with a total potential
value of GBP2.7bn. GBP1.7bn of this is at the pre-qualification stage, GBP0.5bn
at bid stage and decisions are awaited on the remaining GBP0.5bn.
People
We have maintained our commitment throughout the period of striving to make Rok
recognised as the safest place to work in the industry under a programme
entitled 'one accident - too many!'. This is helping us make significant
progress. Against a targeted reduction in Accident Frequency Rate of 10%, we
have achieved a 30% reduction to 0.19 which puts us firmly in the top quartile
of the industry.
It is of course Rok people that are making this happen and who are ensuring we
maintain competitive advantage in the market place by delivering high service
standards every day. They, like everybody else in the UK workforce, are feeling
the effects of this recession but have remained motivated and determined to
succeed throughout the challenges of recent months. Our high levels of retention
of our people is a testament to their loyalty and commitment to Rok and I am
grateful for their efforts and proud to lead them at this time.
We continue to recruit skilled tradespeople and apprentices and are moving
towards our goal of delivering 70% of our planned and response maintenance work
with Rok trained technicians.
Current trading and prospects
Whilst we had anticipated a downturn in the UK economy, we, like many others in
the market, were not sufficiently prepared in 2008 for the severity and speed
with which it came. We reacted quickly without losing sight of our core strategy
and the key elements that differentiate us in the marketplace. Having now scaled
back our capacity for capital intensive new build commercial, industrial and
retail projects we are continuing to focus our new build activities on the lower
risk social housing sector. With public sector capital expenditure likely to
come under significant pressure in the years ahead to rebalance the Government's
books, we nevertheless believe the rented housing sector will continue to
benefit from both economic needs and political will.
Our response maintenance business has a unique position in the UK as the only
national organisation that principally uses its in-house tradespeople to deliver
repair and maintenance services. It is trading well and is winning new mandates.
In addition, it has further opportunities to grow as the trend of outsourcing
continues. Having now achieved leadership in the UK property insurance repairs
market, we expect further growth in the years ahead from other multi-sited
organisations and ultimately from the domestic market.
The national capability of Rok coupled with our local focus and delivery,
remains a compelling proposition for many customers. This combination is
enabling us to continue to secure new framework contracts across all of our
businesses. Whilst in the current climate there have been a number of funding
issues associated with such framework contracts causing deferment of
expenditure, these arrangements are still expected to underpin our revenues
substantially into the future.
The remainder of 2009 and 2010 are expected to remain challenging for the
building and construction industry and we will continue to have a strong focus
on our cost base and cash flow. We have successfully flexed our business mix to
take account of the prevailing market conditions. As a result, we are confident
of achieving our expectations for 2009 provided there is no further
deterioration in market conditions. Our balanced business model, with a high
proportion of planned and response maintenance activities, means we are now well
placed in this period of lower demand and ready to take advantage of the
opportunities that will arise when the upturn comes.
Garvis Snook
Chief Executive
18 August 2009
Condensed consolidated income statement
+----------------------------------+-------+------------+-------------+-------------+
| |Notes | 6 months | 6 months to | Year ended |
| | | to | 30 June | 31 December |
| | | 30 June | 2008 | 2008 |
| | | 2009 | GBPm | GBPm |
| | | GBPm | | |
+----------------------------------+-------+------------+-------------+-------------+
| Continuing operations | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Group revenue | 3 | 364.5 | 546.7 | 1,011.2 |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Gross profit | | 46.8 | 58.2 | 95.4 |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Administrative expenses | | (39.5) | (46.4) | (88.4) |
+----------------------------------+-------+------------+-------------+-------------+
| Profit from operations | 3 | 7.3 | 11.8 | 7.0 |
+----------------------------------+-------+------------+-------------+-------------+
| Analysed as: | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Underlying operating profit | 3 | 8.9 | 12.9 | 21.5 |
+----------------------------------+-------+------------+-------------+-------------+
| Amortisation of intangible | | (0.6) | (1.1) | (2.3) |
| assets | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Group restructuring charges | | (1.0) | - | (12.2) |
+----------------------------------+-------+------------+-------------+-------------+
| Profit from operations | | 7.3 | 11.8 | 7.0 |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Finance cost | 4 | (1.3) | (0.5) | (1.1) |
+----------------------------------+-------+------------+-------------+-------------+
| Profit before tax | | 6.0 | 11.3 | 5.9 |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Income tax expense | 5 | (1.5) | (3.4) | (2.2) |
+----------------------------------+-------+------------+-------------+-------------+
| Profit for the period from | | 4.5 | 7.9 | 3.7 |
| continuing operations | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Discontinued operation | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Loss for the period after tax | 6 | (1.7) | (14.7) | (18.6) |
| from discontinued operations | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Profit (loss) for the period | | 2.8 | (6.8) | (14.9) |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Earnings per share | | | | |
| Continuing operations | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Basic earnings per share | 8 | 2.6p | 4.5p | 2.1p |
+----------------------------------+-------+------------+-------------+-------------+
| Diluted earnings per share | 8 | 2.5p | 4.4p | 2.1p |
+----------------------------------+-------+------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Continuing and discontinued | | | | |
| operations | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Basic earnings (loss) per | 8 | 1.6p | (3.8p) | (8.5p) |
| share | | | | |
+----------------------------------+-------+------------+-------------+-------------+
| Diluted earnings (loss) per | 8 | 1.6p | (3.8p) | (8.4p) |
| share | | | | |
+----------------------------------+-------+------------+-------------+-------------+
Condensed consolidated statement of comprehensive income and expense
+-----------------------------------------+------------+-------------+-------------+
| | 6 months | 6 months to | Year ended |
| | to | 30 June | 31 December |
| | 30 June | 2008 | 2008 |
| | 2009 | GBPm | GBPm |
| | GBPm | | |
+-----------------------------------------+------------+-------------+-------------+
| Actuarial (loss) gain on defined | (12.0) | 0.2 | (2.5) |
| benefit pension schemes | | | |
+-----------------------------------------+------------+-------------+-------------+
| Deferred tax thereon | 3.3 | (0.1) | 0.7 |
+-----------------------------------------+------------+-------------+-------------+
| Net (expense) income recognised | (8.7) | 0.1 | (1.8) |
| directly in equity | | | |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Profit (loss) for the period | 2.8 | (6.8) | (14.9) |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Total comprehensive expense for the | (5.9) | (6.7) | (16.7) |
| period | | | |
+-----------------------------------------+------------+-------------+-------------+
Condensed consolidated statement of financial position
+------------------------------------+-------+-------------+-------------+------------+
| |Notes | 30 June | 30 June | 31 |
| | | 2009 | 2008 | December |
| | | GBPm | GBPm | 2008 |
| | | | | GBPm |
+------------------------------------+-------+-------------+-------------+------------+
| Assets | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Intangible assets | | 148.9 | 141.2 | 146.5 |
+------------------------------------+-------+-------------+-------------+------------+
| Property, plant and equipment | | 16.9 | 22.1 | 19.6 |
+------------------------------------+-------+-------------+-------------+------------+
| Investments | | 0.1 | - | 0.1 |
+------------------------------------+-------+-------------+-------------+------------+
| Deferred tax assets | | 10.3 | 4.8 | 7.6 |
+------------------------------------+-------+-------------+-------------+------------+
| Total non-current assets | | 176.2 | 168.1 | 173.8 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Inventories | | 10.0 | 10.9 | 13.4 |
+------------------------------------+-------+-------------+-------------+------------+
| Assets classified as held-for-sale | 6 | 21.8 | 30.6 | 22.6 |
+------------------------------------+-------+-------------+-------------+------------+
| Trade and other receivables | | 167.7 | 253.0 | 201.1 |
+------------------------------------+-------+-------------+-------------+------------+
| Cash and cash equivalents | | 6.1 | 49.8 | 39.1 |
+------------------------------------+-------+-------------+-------------+------------+
| Total current assets | | 205.6 | 344.3 | 276.2 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Total assets | | 381.8 | 512.4 | 450.0 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Liabilities | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Interest-bearing loans and | 11 | 59.0 | 65.2 | 75.0 |
| borrowings | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Retirement benefit obligations | 12 | 20.5 | 9.0 | 10.1 |
+------------------------------------+-------+-------------+-------------+------------+
| Deferred tax liabilities | | 2.0 | 2.7 | 1.8 |
+------------------------------------+-------+-------------+-------------+------------+
| Total non-current liabilities | | 81.5 | 76.9 | 86.9 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Interest-bearing loans and | 11 | 4.1 | 1.3 | 7.8 |
| borrowings | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Trade and other payables | | 194.6 | 315.5 | 246.0 |
+------------------------------------+-------+-------------+-------------+------------+
| Income tax payable | | 1.8 | 0.6 | 1.8 |
+------------------------------------+-------+-------------+-------------+------------+
| Liabilities associated with the | 6 | 0.8 | 0.5 | 0.5 |
| assets held-for-sale | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Total current liabilities | | 201.3 | 317.9 | 256.1 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Total liabilities | | 282.8 | 394.8 | 343.0 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Net assets | | 99.0 | 117.6 | 107.0 |
+------------------------------------+-------+-------------+-------------+------------+
| | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Equity | | | | |
+------------------------------------+-------+-------------+-------------+------------+
| Issued share capital | 13 | 3.6 | 3.6 | 3.6 |
+------------------------------------+-------+-------------+-------------+------------+
| Share premium | | 18.2 | 18.2 | 18.2 |
+------------------------------------+-------+-------------+-------------+------------+
| Other reserves | | 58.2 | 58.3 | 58.2 |
+------------------------------------+-------+-------------+-------------+------------+
| Retained earnings | | 19.0 | 37.5 | 27.0 |
+------------------------------------+-------+-------------+-------------+------------+
| Total equity | | 99.0 | 117.6 | 107.0 |
+------------------------------------+-------+-------------+-------------+------------+
Condensed consolidated statement of changes in equity
+----------------------------------------+----------------+-------------+------------+
| | 6 months to | 6 months to | Year ended |
| | 30 June | 30 June | 31 |
| | 2009 | 2008 | December |
| | GBPm | GBPm | 2008 |
| | | | GBPm |
+----------------------------------------+----------------+-------------+------------+
| Profit (loss) for the period | 2.8 | (6.8) | (14.9) |
+----------------------------------------+----------------+-------------+------------+
| Net (expense) income recognised | (8.7) | 0.1 | (1.8) |
| directly in equity | | | |
+----------------------------------------+----------------+-------------+------------+
| Dividends | (2.2) | (4.2) | (6.3) |
+----------------------------------------+----------------+-------------+------------+
| Exercise of LTIP options | | | |
+----------------------------------------+----------------+-------------+------------+
| - purchase of own shares held | - | (2.5) | (2.5) |
+----------------------------------------+----------------+-------------+------------+
| - share based payments charge | 0.5 | 1.2 | 2.3 |
+----------------------------------------+----------------+-------------+------------+
| - deferred tax charge to retained | (0.4) | (0.7) | (0.3) |
| earnings | | | |
+----------------------------------------+----------------+-------------+------------+
| Shares issued in respect of | - | 3.2 | 3.2 |
| acquisition consideration | | | |
+----------------------------------------+----------------+-------------+------------+
| Net movement in equity | (8.0) | (9.7) | 20.3 |
+----------------------------------------+----------------+-------------+------------+
| Opening equity | 107.0 | 127.3 | 127.3 |
+----------------------------------------+----------------+-------------+------------+
| Closing equity | 99.0 | 117.6 | 107.0 |
+----------------------------------------+----------------+-------------+------------+
Condensed consolidated statement of cash flows
+----------------------------------------------+------------+-------------+-------------+
| | 6 months | 6 months to | Year ended |
| | to | 30 June | 31 December |
| | 30 June | 2008 | |
| | 2009 | GBPm | 2008 |
| | GBPm | | GBPm |
+----------------------------------------------+------------+-------------+-------------+
| Continuing operations | | | |
+----------------------------------------------+------------+-------------+-------------+
| Profit before tax | 6.0 | 11.3 | 5.9 |
+----------------------------------------------+------------+-------------+-------------+
| Adjustments for: | | | |
+----------------------------------------------+------------+-------------+-------------+
| Depreciation | 3.1 | 3.1 | 6.7 |
+----------------------------------------------+------------+-------------+-------------+
| Intangible asset charges | 0.6 | 1.1 | 2.3 |
+----------------------------------------------+------------+-------------+-------------+
| Gain (loss) on disposal of plant and | 0.1 | (0.4) | (0.2) |
| equipment | | | |
+----------------------------------------------+------------+-------------+-------------+
| Expense in respect of share options | 0.5 | 1.2 | 2.3 |
+----------------------------------------------+------------+-------------+-------------+
| Restructuring charge | 1.0 | - | 12.2 |
+----------------------------------------------+------------+-------------+-------------+
| Finance cost | 1.3 | 0.5 | 1.1 |
+----------------------------------------------+------------+-------------+-------------+
| Cash generated from operations before | 12.6 | 16.8 | 30.3 |
| changes in working capital | | | |
+----------------------------------------------+------------+-------------+-------------+
| Decrease (increase) in trade and other | 24.4 | (24.1) | 9.0 |
| receivables | | | |
+----------------------------------------------+------------+-------------+-------------+
| Decrease (increase) in work in progress | 3.4 | (3.9) | (3.8) |
+----------------------------------------------+------------+-------------+-------------+
| (Decrease) increase in trade and other | (49.9) | 25.7 | (31.2) |
| payables | | | |
+----------------------------------------------+------------+-------------+-------------+
| Cash (out) in flow from operations before | (9.5) | 14.5 | 4.3 |
| defined benefit pension scheme contributions | | | |
| and restructuring costs paid | | | |
+----------------------------------------------+------------+-------------+-------------+
| Defined benefit pension scheme contributions | (1.7) | (1.9) | (3.6) |
+----------------------------------------------+------------+-------------+-------------+
| Restructuring costs paid | (3.6) | - | (5.9) |
+----------------------------------------------+------------+-------------+-------------+
| Cash (out) in flow from operations | (14.8) | 12.6 | (5.2) |
+----------------------------------------------+------------+-------------+-------------+
| Income taxes paid | (0.4) | (2.1) | (3.4) |
+----------------------------------------------+------------+-------------+-------------+
| Cash (out) in flow from operating activities | (15.2) | 10.5 | (8.6) |
+----------------------------------------------+------------+-------------+-------------+
| | | | |
+----------------------------------------------+------------+-------------+-------------+
| Investing activities | | | |
+----------------------------------------------+------------+-------------+-------------+
| Acquisition of subsidiaries, net of cash | - | (14.9) | (17.3) |
| acquired | | | |
+----------------------------------------------+------------+-------------+-------------+
| Acquisition of property, plant and equipment | (1.0) | (2.8) | (7.3) |
+----------------------------------------------+------------+-------------+-------------+
| Proceeds from disposal of plant and | 0.2 | 1.0 | 2.3 |
| equipment | | | |
+----------------------------------------------+------------+-------------+-------------+
| Interest paid | (0.5) | (0.4) | (0.9) |
+----------------------------------------------+------------+-------------+-------------+
| Cash flows from investing activities | (1.3) | (17.1) | (23.2) |
+----------------------------------------------+------------+-------------+-------------+
| | | | |
+----------------------------------------------+------------+-------------+-------------+
| Financing activities | | | |
+----------------------------------------------+------------+-------------+-------------+
| Purchases of own shares | - | (2.5) | (2.5) |
+----------------------------------------------+------------+-------------+-------------+
| (Repayment) proceeds from non-current | (19.2) | 19.1 | 36.0 |
| borrowings | | | |
+----------------------------------------------+------------+-------------+-------------+
| Repayment of obligations under finance | (0.5) | (0.9) | (1.5) |
| leases | | | |
+----------------------------------------------+------------+-------------+-------------+
| Dividends paid | (2.2) | (4.2) | (6.3) |
+----------------------------------------------+------------+-------------+-------------+
| Cash flows from financing activities | (21.9) | 11.5 | 25.7 |
+----------------------------------------------+------------+-------------+-------------+
| | | | |
+----------------------------------------------+------------+-------------+-------------+
| Net (decrease) increase in cash and cash | (38.4) | 4.9 | (6.1) |
| equivalents from continuing operations | | | |
+----------------------------------------------+------------+-------------+-------------+
| | | | |
+----------------------------------------------+------------+-------------+-------------+
| Discontinued operation | | | |
+----------------------------------------------+------------+-------------+-------------+
| Cash flows from operating activities | 6.0 | 4.5 | 6.2 |
+----------------------------------------------+------------+-------------+-------------+
| Cash flows from investing activities | (0.6) | (2.6) | (4.0) |
+----------------------------------------------+------------+-------------+-------------+
| Net increase in cash and cash equivalents | 5.4 | 1.9 | 2.2 |
| from discontinued operation | | | |
+----------------------------------------------+------------+-------------+-------------+
| | | | |
+----------------------------------------------+------------+-------------+-------------+
| Net (decrease) increase in cash and cash | (33.0) | 6.8 | (3.9) |
| equivalents | | | |
+----------------------------------------------+------------+-------------+-------------+
| Net cash and cash equivalents at beginning | 39.1 | 43.0 | 43.0 |
| of period | | | |
+----------------------------------------------+------------+-------------+-------------+
| Net cash and cash equivalents at end of | 6.1 | 49.8 | 39.1 |
| period | | | |
+----------------------------------------------+------------+-------------+-------------+
Notes to the consolidated interim financial statements
1. Basis of accounting and accounting policies
The annual financial statements of Rok plc are prepared in accordance with IFRS
as adopted by the European Union. The condensed set of financial statements
included in this half yearly financial report has been prepared in accordance
with International Accounting Standard 34 'Interim Financial Reporting', as
adopted by the European Union.
The same accounting policies, presentation and methods of computation are
followed in these condensed consolidated financial statements as applied in the
Group's latest annual report and accounts for the year ended 31 December 2008,
except as described below.
Changes in accounting policy
In the current financial year, the Group has adopted IFRS 8 'Operating
Segments', IFRS 2 'Share-based Payment' (amended), IAS 1 'Presentation of
Financial Statements' (revised 2007) and IAS 23 (revised) 'Borrowing Costs'.
IFRS 8 requires operating segments to be identified on the same basis as that on
which internal reports of the Group are regularly reviewed by the Chief
Executive, who is the Group's chief operating decision maker, for the purpose of
allocating resources to the segments and assessing their performance. The
segmental information required by IAS 34 which is included in note 3 below is
presented in accordance with IFRS 8.
IAS 1 (revised) which became effective for periods on or after 1 January 2009,
requires the presentation of a statement of changes in equity as a primary
statement, separate from the income statement and statement of comprehensive
income. As a result, a condensed consolidated statement of changes in equity has
been included in the primary statements, showing changes in equity for each
period presented.
IAS 23 (revised) requires the capitalisation of borrowing costs directly
attributable to the acquisition, construction or production of qualifying assets
where capitalisation for those assets commenced on or after 1 January 2009. The
Group's previous accounting policy was to expense such borrowing costs. As the
transitional provisions of the revised standard do not require its retrospective
application, comparative figures in this half yearly report have not been
restated. No borrowing costs have been capitalised during the period and
accordingly the impact of adopting this standard has no impact on profit,
earnings per share or net assets.
The amendment to IFRS 2 'Share-based Payment' became effective on 1 January 2009
and has been adopted by the Group during the period. The amendment clarifies
that the only vesting conditions are service conditions and performance
conditions and that any other features, such as the requirement to make regular
saving contributions are non-vesting conditions. The amendment also clarifies
that when an employee can choose whether to meet a non-vesting condition and
fails to do so, such a failure must be treated as a cancellation and therefore
an acceleration of the share-based payment charge. The adoption of this
amendment has not had a material impact on profit, earnings per share or net
assets during the period.
Going concern
Rok's activities and the key risks facing its future development and future
position are set out in the interim report. The directors have reviewed the
current and projected position of the Group and have a reasonable expectation
that the Company and the Group will have adequate resources to continue in
operational existence for the foreseeable future. Accordingly the Group has
continued to adopt the going concern basis in preparing the half yearly
condensed consolidated financial statements.
2. Seasonality of results
Rok's trading results tend to be seasonally weighted towards the second half of
the financial year.
Notes to the consolidated interim financial statements (continued)
3. Segmental analysis
In the opinion of the directors the Group's core activities comprise three
material business segments being: response maintenance; planned repairs and
refurbishment; and new build; and reflects the profiles of the risks, rewards
and internal reporting structures within the Group. The Group's Development
activities are now disclosed as a discontinued activity (see note 6).
All activities were conducted within the United Kingdom and it is the opinion of
the directors that this represents one geographical segment.
The following table provides details of revenue and profit by business segment:
+------------------------------------------+-------------+------------+------------+
| Revenue | 6 months to | 6 months | Year ended |
| | 30 June | to | 31 |
| | 2009 | 30 June | December |
| | GBPm | 2008 | 2008 |
| | | GBPm | GBPm |
+------------------------------------------+-------------+------------+------------+
| Response maintenance | 52.7 | 59.7 | 119.0 |
+------------------------------------------+-------------+------------+------------+
| Planned repairs and refurbishment | 151.8 | 198.9 | 328.6 |
+------------------------------------------+-------------+------------+------------+
| New build | 160.0 | 288.1 | 563.6 |
+------------------------------------------+-------------+------------+------------+
| | 364.5 | 546.7 | 1,011.2 |
+------------------------------------------+-------------+------------+------------+
| | | | |
+------------------------------------------+-------------+------------+------------+
| Operating profit | | | |
+------------------------------------------+-------------+------------+------------+
| Response maintenance | 3.2 | 3.2 | 7.4 |
+------------------------------------------+-------------+------------+------------+
| Planned repairs and refurbishment | 7.2 | 9.4 | 16.8 |
+------------------------------------------+-------------+------------+------------+
| New build | 0.5 | 2.8 | 2.2 |
+------------------------------------------+-------------+------------+------------+
| Group activities | (2.0) | (2.5) | (4.9) |
+------------------------------------------+-------------+------------+------------+
| Segment adjusted operating profit | 8.9 | 12.9 | 21.5 |
+------------------------------------------+-------------+------------+------------+
| Restructuring costs | (1.0) | - | (12.2) |
+------------------------------------------+-------------+------------+------------+
| Intangible asset charges | (0.6) | (1.1) | (2.3) |
+------------------------------------------+-------------+------------+------------+
| Profit from operations | 7.3 | 11.8 | 7.0 |
+------------------------------------------+-------------+------------+------------+
| Finance costs | (1.3) | (0.5) | (1.1) |
+------------------------------------------+-------------+------------+------------+
| Income tax expense | (1.5) | (3.4) | (2.2) |
+------------------------------------------+-------------+------------+------------+
| Profit for the period from continuing | 4.5 | 7.9 | 3.7 |
| operations | | | |
+------------------------------------------+-------------+------------+------------+
| Loss for the period from discontinued | (1.7) | (14.7) | (18.6) |
| operations | | | |
+------------------------------------------+-------------+------------+------------+
| Profit (loss) for the period | 2.8 | (6.8) | (14.9) |
+------------------------------------------+-------------+------------+------------+
4. Finance costs from continuing operations
+-----------------------------------------+--------------+------------+-------------+
| | 6 months to | 6 months | Year ended |
| | 30 June | to | 31 December |
| | 2009 | 30 June | 2008 |
| | GBPm | 2008 | GBPm |
| | | GBPm | |
+-----------------------------------------+--------------+------------+-------------+
| Interest | | | |
+-----------------------------------------+--------------+------------+-------------+
| Interest payable on bank loans and | (0.8) | (0.4) | (0.9) |
| overdrafts | | | |
+-----------------------------------------+--------------+------------+-------------+
| | | | |
+-----------------------------------------+--------------+------------+-------------+
| Other finance charges | | | |
+-----------------------------------------+--------------+------------+-------------+
| Expected return on pension scheme | 1.8 | 2.2 | 4.5 |
| assets | | | |
+-----------------------------------------+--------------+------------+-------------+
| Interest on pension scheme liabilities | (2.3) | (2.3) | (4.7) |
+-----------------------------------------+--------------+------------+-------------+
| Net other finance charges | (0.5) | (0.1) | (0.2) |
+-----------------------------------------+--------------+------------+-------------+
| | | | |
+-----------------------------------------+--------------+------------+-------------+
| Total finance costs | (1.3) | (0.5) | (1.1) |
+-----------------------------------------+--------------+------------+-------------+
5. Taxation from continuing operations
Taxation has been provided for the six months ended 30 June 2008 at an effective
rate of 25% (2008: 30%).
Notes to the consolidated interim financial statements (continued)
6. Discontinued operation
The Group's Development operation has been classified separately as a
discontinued operation in the balance sheet, income statement and cash flow
statement. The Development segment was classified as discontinued and held for
sale at 30 June 2008 and 31 December 2008.
+--------------------------------------+-------+------------+------------+------------+
| | | 6 months | 6 months | Year ended |
| | | to | to | 31 |
| | | 30 June | 30 June | December |
| | | 2009 | 2008 | 2008 |
| | | GBPm | GBPm | GBPm |
+--------------------------------------+-------+------------+------------+------------+
| Results of discontinued operation | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Revenue (including share of joint | | 4.5 | 14.7 | 31.6 |
| ventures) | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Less: share of joint ventures' | | (2.1) | (0.2) | (0.2) |
| revenue | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Revenue | | 2.4 | 14.5 | 31.4 |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Gross loss | | - | (0.2) | (0.2) |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Administrative expenses | | - | (2.1) | (2.1) |
+--------------------------------------+-------+------------+------------+------------+
| Exceptional closure costs | | (1.1) | (15.1) | (16.0) |
+--------------------------------------+-------+------------+------------+------------+
| Share of post tax losses from joint | | - | (0.4) | (0.4) |
| ventures | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Operating loss from discontinued | | (1.1) | (17.8) | (18.7) |
| operations | | | | |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Analysed as: | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Underlying operating loss | | - | (2.7) | (2.7) |
+--------------------------------------+-------+------------+------------+------------+
| Work in progress impairment | | (1.1) | (7.5) | (8.6) |
+--------------------------------------+-------+------------+------------+------------+
| Other closure costs | | - | (3.8) | (3.6) |
+--------------------------------------+-------+------------+------------+------------+
| Intangible asset charges | | - | (3.8) | (3.8) |
+--------------------------------------+-------+------------+------------+------------+
| Loss from operations | | (1.1) | (17.8) | (18.7) |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Finance costs | | (1.2) | (1.5) | (2.8) |
+--------------------------------------+-------+------------+------------+------------+
| Loss before tax | | (2.3) | (19.3) | (21.5) |
+--------------------------------------+-------+------------+------------+------------+
| Income tax credit | | 0.6 | 4.6 | 2.9 |
+--------------------------------------+-------+------------+------------+------------+
| Loss for the period after tax | | (1.7) | (14.7) | (18.6) |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Earnings per share - discontinued | | | | |
| operation | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Basic loss per share | | (1.0p) | (8.3p) | (10.6p) |
+--------------------------------------+-------+------------+------------+------------+
| Adjusted basic loss per share | | (1.0p) | (6.1p) | (8.5p) |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Diluted basic loss per share | | (0.9p) | (8.2p) | (10.5p) |
+--------------------------------------+-------+------------+------------+------------+
| Adjusted diluted basic loss per | | (0.9p) | (6.0p) | (8.4p) |
| share | | | | |
+--------------------------------------+-------+------------+------------+------------+
+--------------------------------------+-------+------------+------------+------------+
| Assets and liabilities held for sale | | | | |
+--------------------------------------+-------+------------+------------+------------+
| |
+-------------------------------------------------------------------------------------+
| The major classes of assets and liabilities comprising the discontinued operation |
| classified as held for sale are: |
+-------------------------------------------------------------------------------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| | | 30 June | 30 June | 31 |
| | | 2009 | 2008 | December |
| | | GBPm | GBPm | 2008 |
| | | | | GBPm |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
| Investments in joint ventures | | 2.4 | 3.5 | 3.6 |
+--------------------------------------+-------+------------+------------+------------+
| Inventories | | 19.4 | 27.1 | 19.0 |
+--------------------------------------+-------+------------+------------+------------+
| Trade and other payables | | (0.8) | (0.5) | (0.5) |
+--------------------------------------+-------+------------+------------+------------+
| | | 21.0 | 30.1 | 22.1 |
+--------------------------------------+-------+------------+------------+------------+
| | | | | |
+--------------------------------------+-------+------------+------------+------------+
Notes to the consolidated interim financial statements (continued)
7. Dividends
+--------------------------------------------+------------+------------+-------------+
| | 6 months | 6 months | Year ended |
| | to 30 June | to | 31 December |
| | 2009 | 30 June | 2008 |
| | GBPm | 2008 | GBPm |
| | | GBPm | |
+--------------------------------------------+------------+------------+-------------+
| Dividends paid 1.25p per ordinary share | 2.2 | 4.2 | 6.3 |
| (2008: 2.35p) | | | |
+--------------------------------------------+------------+------------+-------------+
An interim dividend of 0.75p per share (2008: 1.15p) will be paid on 9 October
2009 to members on the register at 28 August 2009.
A dividend reinvestment plan ('the Plan') is available, which enables
shareholders to reinvest their cash dividend in Rok plc ordinary shares. Details
of the Plan are contained in a leaflet which may be obtained from the
Registrars. Shareholders who have already lodged a mandate and who wish to
remain in the Plan need take no action, whereas those who wish to cancel an
existing mandate and receive a cash dividend should advise the Registrars in
writing of this by 18 September 2009. Shareholders who have not yet completed a
mandate but who wish to reinvest the dividend need to complete a mandate and
return this to the Registrars to arrive by 18 September 2009.
The Registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater
Road, Bristol, BS99 6ZZ. Telephone - 0870 707 1274. Online sign-up/change -
www.investorcentre.co.uk
8. Earnings per share
From continuing operations
+---------------------------------+--------+---------+--------+---------+--------+---------+
| | 6 months to | 6 months to | Year ended |
| | 30 June 2009 | 30 June 2008 | 31 December |
| | | | 2008 |
| | | | |
+---------------------------------+------------------+------------------+------------------+
| | Basic | Diluted | Basic | Diluted | Basic | Diluted |
| | pence | | Pence | | pence | |
| | | pence | | pence | | pence |
+---------------------------------+--------+---------+--------+---------+--------+---------+
| Basic | 2.6 | 2.5 | 4.5 | 4.4 | 2.1 | 2.1 |
+---------------------------------+--------+---------+--------+---------+--------+---------+
| Add intangible asset charges, | 0.3 | 0.3 | 0.4 | 0.4 | 1.0 | 0.9 |
| net of tax | | | | | | |
+---------------------------------+--------+---------+--------+---------+--------+---------+
| Add restructuring charges, net | 0.4 | 0.4 | - | - | 5.0 | 5.0 |
| of tax | | | | | | |
+---------------------------------+--------+---------+--------+---------+--------+---------+
| Adjusted | 3.3 | 3.2 | 4.9 | 4.8 | 8.1 | 8.0 |
+---------------------------------+--------+---------+--------+---------+--------+---------+
From continuing and discontinued operations
+---------------------------------+-------+---------+--------+---------+-------+---------+
| | | | |
+---------------------------------+-----------------+------------------+-----------------+
| | Basic | Diluted | Basic | Diluted | Basic | Diluted |
| | pence | | Pence | | pence | |
| | | Pence | | pence | | pence |
+---------------------------------+-------+---------+--------+---------+-------+---------+
| Basic | 1.6 | 1.6 | (3.8) | (3.8) | (8.5) | (8.4) |
+---------------------------------+-------+---------+--------+---------+-------+---------+
| Add intangible asset charges, | 0.3 | 0.3 | 2.6 | 2.6 | 3.1 | 3.0 |
| net of tax | | | | | | |
+---------------------------------+-------+---------+--------+---------+-------+---------+
| Add restructuring charges, net | 0.4 | 0.4 | - | - | 5.0 | 5.0 |
| of tax | | | | | | |
+---------------------------------+-------+---------+--------+---------+-------+---------+
| Adjusted | 2.3 | 2.3 | (1.2) | (1.2) | (0.4) | (0.4) |
+---------------------------------+-------+---------+--------+---------+-------+---------+
The calculation of basic earnings per share for the six months ended 30 June
2009 is based upon the average number of ordinary shares in issue, excluding
those held by the Trustees of the Rok plc Long Term Incentive Plan, during the
period of 175,729,246 (2008: 176,499,693). The calculation of adjusted earnings
per share excludes charges associated with intangible assets and income and
costs not associated with ongoing core operations. The calculation of diluted
earnings per share is based on 178,996,323 (2008: 178,261,922) average ordinary
shares after taking into account dilutive employee share options. At 30 June
2009, there were 179,310,087 shares in issue. On 30 June 2009 the Rok plc
Employee Share Ownership Trust (ESOT) holds 3,309,347 ordinary 2p shares,
representing approximately 1.8% of the issued share capital of the Company.
Notes to the consolidated interim financial statements (continued)
9. Property, plant and equipment
During the period, the Group spent GBP1.0m on property, plant and equipment
additions. The Group also disposed of property, plant and equipment with a
carrying value of GBP0.1m for proceeds of GBP0.2m.
10. Analysis of net debt
+---------------------------------------+--------------+--------------+-------------+
| | | 30 June | 31 December |
| | 30 June | 2008 | 2008 |
| | 2009 | GBPm | GBPm |
| | GBPm | | |
+---------------------------------------+--------------+--------------+-------------+
| Cash and cash equivalents | 6.1 | 49.8 | 39.1 |
+---------------------------------------+--------------+--------------+-------------+
| Current interest bearing loans and | (3.7) | - | (7.0) |
| borrowings | | | |
+---------------------------------------+--------------+--------------+-------------+
| Non-current interest bearing loans | (58.9) | (64.8) | (74.8) |
| and borrowings | | | |
+---------------------------------------+--------------+--------------+-------------+
| Finance leases | (0.5) | (1.7) | (1.0) |
+---------------------------------------+--------------+--------------+-------------+
| Net debt | (57.0) | (16.7) | (43.7) |
+---------------------------------------+--------------+--------------+-------------+
11. Interest bearing loans and borrowings
At 30 June 2009 the Group had GBP89.5m of banking facilities under a club
arrangement with three major banks including a GBP19.5m secured term loan
expiring in March 2012 which amortises in line with Development asset disposals.
The Group also has a GBP70m secured Revolving Credit Facility expiring in March
2012. All covenants were met during the half year.
12. Defined benefit pension schemes
The defined benefit obligation as at 30 June 2009 is calculated using the latest
actuarial valuation as at 30 June 2009. Since the year end the discount rate
applied to scheme liabilities has reduced by 0.5% to 6.2%. This has resulted in
an increase in the gross actuarial liability of GBP10.5m between 31 December
2008 and 30 June 2009. The defined benefit plan assets and liabilities have been
updated to reflect their market value as at 30 June 2009. Differences between
the expected return on assets and actual return on assets have been recognised
as an actuarial gain or loss in the Condensed Consolidated Statement of
Comprehensive Income and Expense.
13. Share capital
Share capital as at 30 June 2009 amounted to GBP3.6 million. During the period,
the Group issued shares in respect of the exercise of share options. This
increased the number of shares in issue from 179,303,672 at 31 December 2008 to
179,310,087 at 30 June 2009.
14. Related party transactions
There have been no significant changes in the nature and amount of related party
transactions since the last annual financial statements as at, and for the year
ended, 31 December 2008.
15. Principal risk and uncertainties
The directors consider the key risks that could have a material impact on the
Group are as set out in the 2008 annual report and accounts. These include, but
are not limited to, health and safety, recruiting and retaining people to manage
and grow the business, pricing and delivery of construction contracts, economic
risks, and evaluation and integration of acquisitions. The impact of the banking
crisis, and the current recession in the UK, have resulted in a decline in
consumer confidence. These factors have had an impact on the wider construction
industry, and as such have increased uncertainty and risk in general. Rok
believes that its balanced business model with a high proportion of planned and
response maintenance activities, is well placed to mitigate these increased
pressures over the coming years.
Notes to the consolidated interim financial statements (continued)
16. Status of accounts
The interim results for the six months ended 30 June 2009 and 30 June 2008 are
unaudited. The information for the year ended 31 December 2008 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The figures for the year ended 31 December 2008 have been extracted from
the latest published financial statements of the Group which have been delivered
to the Registrar of Companies and on which the auditors gave an unqualified
report.
17. Responsibility statement
The Directors of Rok plc confirm that to the best of their knowledge the
condensed set of financial statements has been prepared in accordance with IAS
34 'Interim Financial Reporting' as adopted by the European Union, and that the
Interim Management Report ("IMR") includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R.
+--------------------------------------------------------------------------+
| Cautionary statement |
| This Interim Management Report has been prepared solely to provide |
| additional information to shareholders to assess the Group's strategies |
| and the potential for those strategies to succeed. The IMR should not be |
| relied on by any other party or for any other purpose. |
| The IMR contains certain forward looking statements. These statements |
| are made by the directors in good faith based on the information |
| available to them up to the time of their approval of this report and |
| such statements should be treated with caution due to the inherent |
| uncertainties, including both economic and business risk factors, |
| underlying any such forward looking information. |
+--------------------------------------------------------------------------+
On behalf of the Board,
G D Snook
Chief Executive
A G Martin
Finance Director
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKOKKKBKBKFD
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