TIDMROK
RNS Number : 1618R
Rok PLC
17 August 2010
Press release
17 August 2010
Rok plc
Interim results
Rok plc (LSE: ROK), the maintenance and building services group, today
announces its results for the six months ended 30 June 2010.
Summary of Key Information
+----------------------+----------------------+----------------------+
| | H1 2010 | H1 2009 |
+----------------------+----------------------+----------------------+
| Revenue | GBP308.1m | GBP364.5m |
+----------------------+----------------------+----------------------+
| Operating profit* | GBP4.5m | GBP8.9m |
+----------------------+----------------------+----------------------+
| Operating margins* | 1.5% | 2.4% |
+----------------------+----------------------+----------------------+
| Pre-tax profit* | GBP3.0m | GBP6.0m |
+----------------------+----------------------+----------------------+
| Earnings per share* | 1.0p | 3.3p |
+----------------------+----------------------+----------------------+
| Interim dividend | 0.5p | 0.75p |
+----------------------+----------------------+----------------------+
| Net debt reduced to | GBP47.6m | GBP57.0m |
+----------------------+----------------------+----------------------+
*before intangibles amortisation and exceptional restructuring costs
Commenting on the interim results, Stephen Pettit, Chairman, said:
"Rok has a diversified range of revenue streams, a growing customer base, a
strong order book with a very high level of visibility of work well into next
year, significantly improved cash generation, and excellent customer
satisfaction. The problems within PHE have been a regrettable chapter in Rok's
history. Immediate and appropriate action was taken relating to the
shortcomings in financial and operational control in this part of our
Maintenance and Improvements operations as referred to in our recent trading
update. The Board and management team are totally committed to rebuilding the
strength of the business and delivering against expectations."
Enquiries to:
+------------------------------------+--------------------------------+
| Rok plc | www.rokgroup.com |
+------------------------------------+--------------------------------+
| Garvis Snook, Group Chief | Via Redleaf |
| Executive | garvis.snook@rokgroup.com |
+------------------------------------+--------------------------------+
| | |
+------------------------------------+--------------------------------+
| Redleaf Communications Ltd | |
+------------------------------------+--------------------------------+
| Emma Kane/ Rebecca Sanders-Hewett | Tel: 020 7566 6700 |
| | rok@redleafpr.com |
| | |
+------------------------------------+--------------------------------+
Notes to Editors:
¡ The Group specialises in relationship based provision of building services on
a national basis and undertakes maintenance and building improvements, social
housing (new build and planned repairs) and construction.
¡ Further information on Rok is available at www.rokgroup.com
Chief Executive's Statement
Introduction
Rok comprises three core business divisions - Construction, Social Housing, and
Maintenance and Improvements; a diversified portfolio designed to enable the
Company to manage changing business and economic climates. These interim
results for the six months to 30 June 2010 demonstrate the importance of this
strategy and are in line with previous guidance before one-off restructuring
costs.
Review of Operations
Construction
Rok's Construction business performed in line with expectations during the
period, in which it continued to target profit over volume through careful
customer and project selection. This deliberate tactic has been employed since
late November 2008 to minimise risk during the worst phase of the recession. A
tight focus on costs has continued and the order book is good. The Construction
business, with its seasonal second half weighting is positioned to continue to
perform well during the remainder of the year.
Social Housing
Trading in the Social Housing business was not affected by the change in
Government and subsequent spending cuts although a slight slowdown in the period
between tender and award of contract and a greater emphasis on new build housing
rather than planned repairs has been noticeable. Margins were maintained at
2009 year end levels and the business, whilst not forecasting to grow this year,
also enjoys a good order book and is expected to perform in line with
expectations for the remainder of the year.
Maintenance and Improvements
This division comprises Response Maintenance, Improvements & Refurbishments, and
Plumbing, Heating & Electrical (PHE). During the period under review, the
Directors took the decision to streamline the fixed cost base of this division.
Whilst the Board is confident about the outlook for the wider division and the
business model remains robust, it believes that this is prudent in the current
economic climate and in response to the issues experienced in the PHE business.
Response Maintenance, including Rok Insurance Services (RIS), continued to enjoy
a growing client base and is recording continuing high levels of customer
satisfaction. RIS has been successful in increasing the proportion of valid
claims converted to live contracts for local Rok branches as well as agreeing an
expanded schedule of rates with more than 80% of its customers during the
period. The industry-wide inability to access customer properties due to the
severe weather coupled with our large direct labour team, early in 2010,
resulted in the previously reported impact on profitability and gross margins
which will be reflected in the full year results.
The key development within this unit during the first half was the continued
investment in systems and technology. As a result, the unit now has a strong
platform to enable it to service its existing blue chip customer base and to
increase capacity significantly with minimal increase in fixed costs. A new
system is being introduced to bring greater consistency to estimating the cost
of individual insurance repair jobs driving speed, consistency and efficiency.
In addition, the business launched the first phase of 'The Way We Work', a
resource planning system, which will be completed early in 2011. It is expected
that this will add substantial value as the Group increases its presence in the
emergency repair work market.
Improvements & Refurbishments, typically comprising locally sourced projects up
to GBP100,000 in value, showed a steady performance during the first half.
Demand increased throughout the period and the Directors are confident that this
trend will continue for the remainder of the year.
The Board identified a number of underperforming contracts within the PHE unit.
Following an independent review of the unit conducted by accountants BDO,
serious failings in the financial controls of the PHE unit were confirmed; as
reported by the Company on 11 August 2010. The PHE business is not now expected
to make any contribution to full year profits and the decision to integrate the
PHE operations into our build and maintenance offices will result in charges for
operational restructuring and redundancies.
Results
Continuing operations:
Overall Group revenues from continuing operations for the six months ended 30
June 2010 fell by 15% to GBP308.1m (2009: GBP364.5m).
Group operating profits, before restructuring costs and amortisation of
intangibles, fell by 49% to GBP4.5m (2009: GBP8.9m). Fixed costs have been
reduced by 7%. Underlying operating margins on the same basis fell 0.9% to 1.5%
(2009: 2.4%).
Restructuring costs of GBP6.8m were incurred in the first half relating to the
streamlining of the cost base in the Maintenance and Improvements division,
including the restructuring of our PHE business. Our focus on costs and
continuing to reduce debt remains a priority.
Finance costs from continuing operations were GBP1.5m (2009: GBP1.3m).
Headline profits before tax from continuing activities before intangibles
amortisation and exceptional restructuring costs reduced by 61% to GBP3.0m
(2009: GBP7.6m). Amortisation of intangible assets reduced from GBP0.6m to
GBP0.4m being the amortisation of brands and order books associated with
acquisitions.
The tax credit of GBP1.0m (2009: GBP1.5m charge) represents an effective rate of
25% (2009: 25%). Basic earnings per share from continuing activities fell to
(1.6)p (2009: 2.6p). Adjusted earnings per share before intangible asset
charges and restructuring costs reduced to 1.0p (2009: 3.3p).
Discontinued Development activity
The disposal of development assets held by the Group in its discontinued
development portfolio continued during this period - disposal proceeds totalled
GBP1.6m.
Cash flow and net debt
Operating cash inflow before tax, defined benefit pension contributions and
restructuring costs paid for the first six months of 2010 was GBP5.9m, (2009:
(GBP9.5m)) which reflects the more stable business mix following the downsizing
of our cash generative construction activities throughout 2009. Group net debt
at the period end was GBP47.6m (2009: GBP57.0m) reflecting the changes referred
to above. Average net debt during the period amounted to GBP64.2m compared with
GBP65.1m during the second half of 2009. The Group has committed bank facilities
totalling GBP81.0m on a three-year revolving credit facility expiring in March
2012. The facilities amortise to reflect Development asset disposals. All
banking covenants have been met throughout the period.
Dividend
The Board is proposing to pay an interim dividend of 0.5p per share (2009:
0.75p). This reflects the Group's policy of adjusting the dividend in line with
the change in underlying earnings per share. The dividend will be paid on 8
October 2010 to members on the register at 27 August 2010.
People
It is our people delivering our maintenance and building services across the
length and breadth of the UK who are delivering high levels of customer
satisfaction. Their dedication to delivering the highest standards of service
is enabling us to continue to build our market share and reputation as the
Nation's Local Builder. The Directors thank them for their ongoing commitment
and loyalty during this difficult period.
Current trading and prospects
The economic climate remains challenging and we have shaped our business
accordingly. We expect, and have planned for, lower volumes in construction
next year in light of forecast reductions in public sector spending. Due to high
levels of future revenue visibility we expect to increase our market share in
social housing where industry volumes are forecast to reduce overall. Visibility
of revenues in our Maintenance and Improvements business is good and we expect
income to grow through new insurance customer wins.
Over the last decade, Rok has built foundations based on a clear vision of what
we need to achieve to deliver the services that people and organisations want
across the UK. Whilst the isolated shortcomings in financial control at the PHE
unit will have a significant impact on this year's results, the fundamentals of
our business remain sound. Rok has a strong secured order book at GBP435m, good
momentum in its Social Housing and Construction businesses and a Maintenance and
Improvements division where we have swiftly implemented the steps necessary to
ensure all activities operate effectively.
The diversification of our business portfolio has enabled us to shape our
business as and when the economic landscape requires. For the full year, we
anticipate that our volumes will be flat but we do expect margins to improve
during the second half due to the continuing flexibility of our business model.
Cash generation is strong and our focus on achieving materially lower debt has
been successful. Our revised, lower fixed cost base and forecasts for the
business means the Board looks ahead with renewed confidence.
Condensed consolidated income statement
+------------------------------+-------+----------+----------+----------+
| | | | | |
| |Notes | 6 months | 6 months | Year |
| | | to | to | ended |
| | | 30 June | 30 June | 31 |
| | | 2010 | 2009 | December |
| | | GBPm | GBPm | 2009 |
| | | | | GBPm |
+------------------------------+-------+----------+----------+----------+
| Continuing operations | | | | |
+------------------------------+-------+----------+----------+----------+
| Group revenue | 3 | 308.1 | 364.5 | 714.8 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Gross profit | | 34.6 | 46.8 | 81.1 |
+------------------------------+-------+----------+----------+----------+
| Administrative expenses | | (36.9) | (39.5) | (61.9) |
+------------------------------+-------+----------+----------+----------+
| (Loss) profit from | 3 | (2.3) | 7.3 | 19.2 |
| operations | | | | |
+------------------------------+-------+----------+----------+----------+
| Analysed as: | | | | |
+------------------------------+-------+----------+----------+----------+
| Adjusted operating profit | 3 | 4.5 | 8.9 | 22.6 |
+------------------------------+-------+----------+----------+----------+
| Amortisation of intangible | | (0.4) | (0.6) | (1.3) |
| assets | | | | |
+------------------------------+-------+----------+----------+----------+
| Exceptional items | 4 | (6.4) | (1.0) | (2.1) |
+------------------------------+-------+----------+----------+----------+
| (Loss) profit from | | (2.3) | 7.3 | 19.2 |
| operations | | | | |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Finance costs and income | 5 | (1.5) | (1.3) | (2.2) |
+------------------------------+-------+----------+----------+----------+
| Analysed as: | | | | |
+------------------------------+-------+----------+----------+----------+
| Interest payable | | (1.2) | (0.8) | (1.0) |
+------------------------------+-------+----------+----------+----------+
| Other finance income | | 2.2 | 1.8 | 3.5 |
+------------------------------+-------+----------+----------+----------+
| Other finance charges | | (2.5) | (2.3) | (4.7) |
+------------------------------+-------+----------+----------+----------+
| Finance costs and income | | (1.5) | (1.3) | (2.2) |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| (Loss) profit before tax | | (3.8) | 6.0 | 17.0 |
+------------------------------+-------+----------+----------+----------+
| Income tax credit (expense) | 6 | 1.0 | (1.5) | (4.0) |
+------------------------------+-------+----------+----------+----------+
| (Loss) profit for the period | | (2.8) | 4.5 | 13.0 |
| from continuing operations | | | | |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Discontinued operation | | | | |
+------------------------------+-------+----------+----------+----------+
| Loss for the period after | | (1.0) | (1.7) | (4.6) |
| tax from discontinued | 7 | | | |
| operations | | | | |
+------------------------------+-------+----------+----------+----------+
| (Loss) profit for the period | | (3.8) | 2.8 | 8.4 |
| | | | | |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Earnings per share | | | | |
| Continuing operations | | | | |
+------------------------------+-------+----------+----------+----------+
| Basic (loss) earnings per | 9 | (1.6)p | 2.6p | 7.4p |
| share | | | | |
+------------------------------+-------+----------+----------+----------+
| Diluted (loss) earnings per | 9 | (1.6)p | 2.5p | 7.3p |
| share | | | | |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Continuing and discontinued | | | | |
| operations | | | | |
+------------------------------+-------+----------+----------+----------+
| Basic (loss) earnings per | 9 | (2.1)p | 1.6p | 4.8p |
| share | | | | |
+------------------------------+-------+----------+----------+----------+
| Diluted (loss) earnings per | 9 | (2.1)p | 1.6p | 4.7p |
| share | | | | |
+------------------------------+-------+----------+----------+----------+
Condensed consolidated statement of comprehensive income and expense
+------------------------------------+----------+---------------+----------+
| | | | |
| | 6 months | 6 months | Year |
| | to | to | ended |
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | GBPm | GBPm | 2009 |
| | | Re-presented* | GBPm |
+------------------------------------+----------+---------------+----------+
| (Loss) profit for the period | (3.8) | 2.8 | 8.4 |
+------------------------------------+----------+---------------+----------+
| Actuarial loss on defined benefit | (6.3) | (12.0) | (9.7) |
| pension schemes | | | |
+------------------------------------+----------+---------------+----------+
| Gain on defined benefit minimum | - | 2.8 | 2.8 |
| funding requirement | | | |
+------------------------------------+----------+---------------+----------+
| Cash flow hedges | (0.1) | - | (0.2) |
+------------------------------------+----------+---------------+----------+
| Deferred tax thereon | 1.7 | 2.5 | 2.0 |
+------------------------------------+----------+---------------+----------+
| Total comprehensive (expense) | (8.5) | (3.9) | 3.3 |
| income | | | |
+------------------------------------+----------+---------------+----------+
*See note 1.
Condensed consolidated statement of financial position
+------------------------------+-------+----------+----------+----------+
| |Notes | 30 June | 30 June | 31 |
| | | 2010 | 2009 | December |
| | | GBPm | GBPm | 2009 |
| | | | | GBPm |
+------------------------------+-------+----------+----------+----------+
| Assets | | | | |
+------------------------------+-------+----------+----------+----------+
| Intangible assets | | 146.0 | 148.9 | 146.4 |
+------------------------------+-------+----------+----------+----------+
| Property, plant and | 10 | 14.2 | 16.9 | 17.1 |
| equipment | | | | |
+------------------------------+-------+----------+----------+----------+
| Investments | | 0.1 | 0.1 | 0.1 |
+------------------------------+-------+----------+----------+----------+
| Deferred tax assets | | 9.2 | 10.3 | 8.1 |
+------------------------------+-------+----------+----------+----------+
| Total non-current assets | | 169.5 | 176.2 | 171.7 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Inventories | | 12.6 | 10.0 | 8.2 |
+------------------------------+-------+----------+----------+----------+
| Trade and other receivables | | 180.3 | 167.7 | 182.9 |
+------------------------------+-------+----------+----------+----------+
| Income tax receivable | | 0.4 | - | - |
+------------------------------+-------+----------+----------+----------+
| Cash and cash equivalents | | 13.3 | 6.1 | 5.5 |
+------------------------------+-------+----------+----------+----------+
| Assets classified as | 7 | 14.0 | 21.8 | 15.0 |
| held-for-sale | | | | |
+------------------------------+-------+----------+----------+----------+
| Total current assets | | 220.6 | 205.6 | 211.6 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Total assets | | 390.1 | 381.8 | 383.3 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Liabilities | | | | |
+------------------------------+-------+----------+----------+----------+
| Interest-bearing loans and | 11 | 59.8 | 59.0 | 51.3 |
| borrowings | | | | |
+------------------------------+-------+----------+----------+----------+
| Retirement benefit | 13 | 23.1 | 20.5 | 17.6 |
| obligations | | | | |
+------------------------------+-------+----------+----------+----------+
| Deferred tax liabilities | | 1.2 | 2.0 | 1.3 |
+------------------------------+-------+----------+----------+----------+
| Provisions | | 0.3 | - | 2.3 |
+------------------------------+-------+----------+----------+----------+
| Total non-current | | 84.4 | 81.5 | 72.5 |
| liabilities | | | | |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Interest-bearing loans and | 11 | 1.1 | 4.1 | 0.9 |
| borrowings | | | | |
+------------------------------+-------+----------+----------+----------+
| Trade and other payables | | 205.5 | 194.6 | 201.6 |
+------------------------------+-------+----------+----------+----------+
| Income tax payable | | - | 1.8 | 0.8 |
+------------------------------+-------+----------+----------+----------+
| Liabilities associated with | 7 | - | 0.8 | - |
| the assets held-for-sale | | | | |
+------------------------------+-------+----------+----------+----------+
| Provisions | | 4.7 | - | 1.8 |
+------------------------------+-------+----------+----------+----------+
| Total current liabilities | | 211.3 | 201.3 | 205.1 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Total liabilities | | 295.7 | 282.8 | 277.6 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Net assets | | 94.4 | 99.0 | 105.7 |
+------------------------------+-------+----------+----------+----------+
| | | | | |
+------------------------------+-------+----------+----------+----------+
| Equity | | | | |
+------------------------------+-------+----------+----------+----------+
| Issued share capital | 14 | 3.6 | 3.6 | 3.6 |
+------------------------------+-------+----------+----------+----------+
| Share premium | | 18.2 | 18.2 | 18.2 |
+------------------------------+-------+----------+----------+----------+
| Other reserves | | 56.2 | 58.2 | 55.8 |
+------------------------------+-------+----------+----------+----------+
| Retained earnings | | 16.4 | 19.0 | 28.1 |
+------------------------------+-------+----------+----------+----------+
| Total equity | | 94.4 | 99.0 | 105.7 |
+------------------------------+-------+----------+----------+----------+
Condensed consolidated statement of changes in equity
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| | Share | Share | Merger | Capital | Hedging | Own | Retained | Total |
| | capital | premium | reserve | redemption | reserve | shares | earnings | equity |
| | GBPm | GBPm | GBPm | reserve | GBPm | reserve | GBPm | GBPm |
| | | | | GBPm | | GBPm | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Six months ended 30 June 2010 |
+---------------------------------------------------------------------------------------------------------+
| Balance at 31 | 3.6 | 18.2 | 52.6 | 5.6 | (0.2) | (2.2) | 28.1 | 105.7 |
| December 2009 | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Loss for the period | - | - | - | - | - | - | (3.8) | (3.8) |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Actuarial loss on | - | - | - | - | - | - | (6.3) | (6.3) |
| defined benefit | | | | | | | | |
| pension schemes | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Dividends | - | - | - | - | - | - | (3.0) | (3.0) |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Exercise of own | - | - | - | - | - | 0.5 | (0.5) | - |
| shares | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Share based payments | - | - | - | - | - | - | 0.2 | 0.2 |
| charge reversal | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Fair value movement | - | - | - | - | (0.1) | - | - | (0.1) |
| on cash flow hedges | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Deferred tax on | - | - | - | - | - | - | 1.7 | 1.7 |
| items recognised | | | | | | | | |
| directly in equity | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Balance at 30 June | 3.6 | 18.2 | 52.6 | 5.6 | (0.3) | (1.7) | 16.4 | 94.4 |
| 2010 | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Six months ended 30 June 2009 |
+---------------------------------------------------------------------------------------------------------+
| Balance at 31 | 3.6 | 18.2 | 52.6 | 5.6 | - | (2.9) | 29.9 | 107.0 |
| December 2008 | | | | | | | | |
| as previously | | | | | | | | |
| reported | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Prior year | - | - | - | - | - | - | (2.0) | (2.0) |
| adjustment* | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Balance at 31 | 3.6 | 18.2 | 52.6 | 5.6 | - | (2.9) | 27.9 | 105.0 |
| December 2008 | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Profit for the | - | - | - | - | - | - | 2.8 | 2.8 |
| period | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Actuarial loss on | - | - | - | - | - | - | (12.0) | (12.0) |
| defined benefit | | | | | | | | |
| pension schemes | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Gain on defined | - | - | - | - | - | - | 2.8 | 2.8 |
| benefit minimum | | | | | | | | |
| funding requirement | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Dividends | - | - | - | - | - | - | (2.2) | (2.2) |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Exercise of own | - | - | - | - | - | 0.6 | (0.6) | - |
| shares | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Share based payments | - | - | - | - | - | - | 0.5 | 0.5 |
| charge reversal | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Deferred tax on | - | - | - | - | - | - | 2.1 | 2.1 |
| items recognised | | | | | | | | |
| directly in equity | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Balance at 30 June | 3.6 | 18.2 | 52.6 | 5.6 | - | (2.3) | 21.3 | 99.0 |
| 2009 | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| For the year ended 31 December 2009 |
+---------------------------------------------------------------------------------------------------------+
| Balance at 31 | 3.6 | 18.2 | 52.6 | 5.6 | - | (2.9) | 27.9 | 105.0 |
| December 2008 | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Profit for the year | - | - | - | - | - | - | 8.4 | 8.4 |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Actuarial loss on | - | - | - | - | - | - | (9.7) | (9.7) |
| defined benefit | | | | | | | | |
| pension schemes | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Gain on defined | - | - | - | - | - | - | 2.8 | 2.8 |
| benefit minimum | | | | | | | | |
| funding requirement | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Dividends | - | - | - | - | - | - | (3.5) | (3.5) |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Exercise of own | - | - | - | - | - | 0.7 | (0.7) | - |
| shares | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Share based payments | - | - | - | - | - | - | 0.9 | 0.9 |
| charge reversal | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Fair value movement | - | - | - | - | (0.2) | - | - | (0.2) |
| on cash flow hedges | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Deferred tax on | - | - | - | - | - | - | 2.0 | 2.0 |
| items recognised | | | | | | | | |
| directly in equity | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
| Balance at 31 | 3.6 | 18.2 | 52.6 | 5.6 | (0.2) | (2.2) | 28.1 | 105.7 |
| December 2009 | | | | | | | | |
+----------------------+---------+---------+---------+------------+---------+---------+----------+--------+
*See note 1.
Condensed consolidated statement of cash flows
+-----------------------------------+----------+----------+----------+
| | 6 months | 6 months | Year |
| | to | to | ended |
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | GBPm | GBPm | 2009 |
| | | | GBPm |
+-----------------------------------+----------+----------+----------+
| Continuing operations | | | |
+-----------------------------------+----------+----------+----------+
| (Loss) profit before tax | (3.8) | 6.0 | 17.0 |
+-----------------------------------+----------+----------+----------+
| Adjustments for: | | | |
+-----------------------------------+----------+----------+----------+
| Depreciation | 2.2 | 3.1 | 5.5 |
+-----------------------------------+----------+----------+----------+
| Intangible asset charges | 0.4 | 0.6 | 1.3 |
+-----------------------------------+----------+----------+----------+
| (Gain) loss on disposal of plant | (0.1) | 0.1 | (0.1) |
| and equipment | | | |
+-----------------------------------+----------+----------+----------+
| Expense in respect of share | 0.2 | 0.5 | 0.9 |
| options | | | |
+-----------------------------------+----------+----------+----------+
| Exceptional charges | 6.4 | 1.0 | 2.1 |
+-----------------------------------+----------+----------+----------+
| Finance cost | 1.5 | 1.3 | 2.2 |
+-----------------------------------+----------+----------+----------+
| Cash generated from operations | 6.8 | 12.6 | 28.9 |
| before changes in working capital | | | |
+-----------------------------------+----------+----------+----------+
| Decrease in trade and other | 2.2 | 24.4 | 7.8 |
| receivables | | | |
+-----------------------------------+----------+----------+----------+
| (Increase) decrease in | (4.4) | 3.4 | 5.2 |
| inventories | | | |
+-----------------------------------+----------+----------+----------+
| Increase (decrease) in trade and | 1.3 | (49.9) | (32.9) |
| other payables | | | |
+-----------------------------------+----------+----------+----------+
| Cash in (out) flow from | 5.9 | (9.5) | 9.0 |
| operations before defined benefit | | | |
| pension scheme contributions and | | | |
| restructuring costs paid | | | |
+-----------------------------------+----------+----------+----------+
| Defined benefit pension scheme | (1.1) | (1.7) | (3.4) |
| contributions | | | |
+-----------------------------------+----------+----------+----------+
| Restructuring costs paid | (3.8) | (3.6) | (8.5) |
+-----------------------------------+----------+----------+----------+
| Cash in(out) flow from operations | 1.0 | (14.8) | (2.9) |
+-----------------------------------+----------+----------+----------+
| Income taxes received (paid) | 0.5 | (0.4) | (0.3) |
+-----------------------------------+----------+----------+----------+
| Cash in(out) flow from operating | 1.5 | (15.2) | (3.2) |
| activities | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Investing activities | | | |
+-----------------------------------+----------+----------+----------+
| Acquisition of property, plant | (2.1) | (1.0) | (2.8) |
| and equipment | | | |
+-----------------------------------+----------+----------+----------+
| Proceeds from disposal of | 0.7 | - | - |
| subsidiary undertakings | | | |
+-----------------------------------+----------+----------+----------+
| Proceeds from disposal of plant | 1.4 | 0.2 | 0.6 |
| and equipment | | | |
+-----------------------------------+----------+----------+----------+
| Interest paid | (0.8) | (0.5) | (0.6) |
+-----------------------------------+----------+----------+----------+
| Cash flows from investing | (0.8) | (1.3) | (2.8) |
| activities | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Financing activities | | | |
+-----------------------------------+----------+----------+----------+
| Proceeds (repayment) from | 10.3 | (19.2) | (23.4) |
| non-current borrowings | | | |
+-----------------------------------+----------+----------+----------+
| Repayment of obligations under | (0.2) | (0.5) | (0.7) |
| finance leases | | | |
+-----------------------------------+----------+----------+----------+
| Dividends paid | (3.0) | (2.2) | (3.5) |
+-----------------------------------+----------+----------+----------+
| Cash flows from financing | 7.1 | (21.9) | (27.6) |
| activities | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Net increase (decrease) in cash | 7.8 | (38.4) | (33.6) |
| and cash equivalents from | | | |
| continuing operations | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Discontinued operation | | | |
+-----------------------------------+----------+----------+----------+
| Cash flows from operating | 2.5 | 6.0 | 8.6 |
| activities | | | |
+-----------------------------------+----------+----------+----------+
| Cash flows from investing | (0.9) | (0.6) | (2.1) |
| activities | | | |
+-----------------------------------+----------+----------+----------+
| Cash flows from financing | (1.6) | - | (6.5) |
| activities | | | |
+-----------------------------------+----------+----------+----------+
| Net increase in cash and cash | - | 5.4 | - |
| equivalents from discontinued | | | |
| operation | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Net increase (decrease) in cash | 7.8 | (33.0) | (33.6) |
| and cash equivalents | | | |
+-----------------------------------+----------+----------+----------+
| Net cash and cash equivalents at | 5.5 | 39.1 | 39.1 |
| beginning of period | | | |
+-----------------------------------+----------+----------+----------+
| Net cash and cash equivalents at | 13.3 | 6.1 | 5.5 |
| end of period | | | |
+-----------------------------------+----------+----------+----------+
Notes to the consolidated interim financial statements
1. Basis of preparation 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 the Disclosure and Transparency Rules of the Financial Services Authority
and 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 2009,
except as described below.
Changes in accounting policy
During the six months ended 30 June 2010, the Company adopted the following
amendments to International Financial Reporting Standards (IFRS), International
Accounting Standards (IAS) and interpretations by the International Financial
Reporting Interpretations Committee (IFRIC). The following new interpretations
have been adopted in the current period which has affected the amounts reported
in these financial statements.
IFRIC 14 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction. This interpretation sets out how a minimum funding
requirement might give rise to a liability. The Group adopted IFRIC 14 with
effect from 1 January 2009 however at 30 June 2009 the impact of the adoption
had not been fully quantified and, therefore the comparative information for
June 2009 has been represented accordingly. At 30 June 2009 this has resulted in
the recognition of an additional GBP2.0m liability net of tax in the opening
reserves at 1 January 2009 for the amount of the present value of the minimum
funding requirements in excess of the existing defined benefit deficit. The
GBP2.0m net of tax decrease in the liability in the six months ending 30 June
2009 has been recognised in the statement of comprehensive income.
The following new and revised standards and interpretations have been adopted in
these financial statements. Their adoption has not had any significant impact on
the amounts reported in these financial statements:
· Amendments to IFRS 1 'Additional exceptions for first time adopters'
(effective from 1 January 2010)
· Amendments to IFRS 2 'Share based payments' (effective from 1 January
2010)
· IFRS 3 (Revised) 'Business combinations' (effective from 1 January 2010)
· IAS 27 (Revised) 'Consolidated and Separate Financial Statements'
(effective from 1 January 2010)
· Amendments to IAS 39 'Eligible Hedged Items' (effective from 1 January
2010)
The following new and revised standards and interpretations have been issued but
are not yet effective and have therefore not been adopted in these financial
statements. The standards and interpretations listed below are not expected to
have a material impact on the Company's consolidated results or assets and
liabilities:
· Amendments to IFRS 1 'Limited exemption from comparative IFRS 7
disclosures for first time adopters' (effective from 1 July 2010 subject to
endorsement by the European Union)
· Amendments to IFRIC 14 'Prepayments of a minimum funding requirement'
(effective from 1 January 2011)
· Amendments to IFRIC 14 'The Limit of a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction'; (effective from 1 January 2011)
· Amendments to IAS 24 'Related Party Disclosures' (effective from 1
January 2011)
· Amendments to IAS 32 'Financial instruments: Presentation -
Classification of rights issues' (effective from 1 January 2011)
· IFRIC 19 'Extinguishing financial liabilities with equity instruments'
(effective 1 January 2011)
· IFRS 9 'Financial Instruments' (effective from 1 January 2013 subject to
endorsement by the European Union)
· Improvements to IFRS 2010 (various, subject to endorsement by the
European Union)
Notes to the consolidated interim financial statements (continued)
1. Basis of preparation and accounting policies continued
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.
3. Segmental analysis
In 2009, we took a decision to restructure the Group into three new operating
divisions with effect from 1 January 2010. The identified new divisions which
reported to the Group's chief decision makers are Maintenance and improvements,
Social housing, and Construction. The Group's plumbing heating and electrical
activities have been aggregated into the Maintenance and improvements segment as
a result of the similar nature and delivery of the services. Our construction
activity previously reported as part of our new build business has been
identified as a separate segment. Our social housing activity previously
reported as part of both our new build and planned repairs and refurbishment
business has been identified as a separate segment. Furthermore our Maintenance
and improvements activity previously reported as a separate response maintenance
segment and as part of our planned repairs and refurbishment segment has been
identified as a separate segment. The comparative financial data at 30 June 2009
below has been represented to reflect the performance of our three new divisions
in the organisational structures that applied from 1 January 2010.
In the opinion of the directors, the Group's core activities comprise three
material segments being: Maintenance and improvements, Social Housing, and
Construction. Maintenance and improvements provides a comprehensive repairs and
improvements service for national organisations and local customers, Social
housing work with organisations such as housing groups, including building new
homes for registered social landlords and repairs under the decent homes
initiative, and Construction generally undertakes low risk construction projects
including schools, offices and health centres. All activities were conducted
within the United Kingdom. In the current and prior periods the segment
disclosure and information reported to the Group's chief operating decision
maker for the purposes of assessment of segment performance is focused on the
service each division provides to its customers.
The Group was also previously involved in Property Development. As explained
further in note 7 the remaining inventory is held for sale and therefore the
results of this division, including gains and losses in respect of the remaining
inventory, are reported as a discontinued operation in the current and prior
periods.
All inter-segmental transactions are on an arm's length basis.
Notes to the consolidated interim financial statements (continued)
3. Segmental analysis continued
+-----------------------------------+----------+----------------+----------+
| Revenue | | | |
| | | | |
| | 6 months | 6 months | Year |
| | to | to | ended |
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | | (Re-presented) | 2009 |
| | GBPm | GBPm | |
| | | | GBPm |
| | | | |
+-----------------------------------+----------+----------------+----------+
| Maintenance and improvements | 116.7 | 112.6 | 283.5 |
+-----------------------------------+----------+----------------+----------+
| Social housing | 84.5 | 98.4 | 204.3 |
+-----------------------------------+----------+----------------+----------+
| Construction | 115.7 | 160.1 | 246.8 |
+-----------------------------------+----------+----------------+----------+
| Less inter-segment | (8.8) | (6.6) | (19.8) |
+-----------------------------------+----------+----------------+----------+
| Group revenue | 308.1 | 364.5 | 714.8 |
+-----------------------------------+----------+----------------+----------+
| | | | |
+-----------------------------------+----------+----------------+----------+
| Operating profit | | | |
+-----------------------------------+----------+----------------+----------+
| Maintenance and improvements | 2.3 | 5.4 | 14.2 |
+-----------------------------------+----------+----------------+----------+
| Social housing | 3.6 | 5.0 | 9.1 |
+-----------------------------------+----------+----------------+----------+
| Construction | 0.6 | 0.5 | 3.5 |
+-----------------------------------+----------+----------------+----------+
| Group activities | (2.0) | (2.0) | (4.2) |
+-----------------------------------+----------+----------------+----------+
| Segment adjusted operating profit | 4.5 | 8.9 | 22.6 |
+-----------------------------------+----------+----------------+----------+
| Exceptional items | (6.4) | (1.0) | (2.1) |
+-----------------------------------+----------+----------------+----------+
| Intangible asset charges | (0.4) | (0.6) | (1.3) |
+-----------------------------------+----------+----------------+----------+
| (Loss) profit from operations | (2.3) | 7.3 | 19.2 |
+-----------------------------------+----------+----------------+----------+
| Finance costs | (1.5) | (1.3) | (2.2) |
+-----------------------------------+----------+----------------+----------+
| Income tax credit (expense) | 1.0 | (1.5) | (4.0) |
+-----------------------------------+----------+----------------+----------+
| Profit for the period from | (2.8) | 4.5 | 13.0 |
| continuing operations | | | |
+-----------------------------------+----------+----------------+----------+
| Loss for the period from | (1.0) | (1.7) | (4.6) |
| discontinued operations | | | |
+-----------------------------------+----------+----------------+----------+
| (Loss) profit for the period | (3.8) | 2.8 | 8.4 |
+-----------------------------------+----------+----------------+----------+
4. Exceptional items
+-----------------------------------+----------+----------+----------+
| | | | |
| | 6 months | 6 months | Year |
| | to | to | ended |
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | GBPm | GBPm | 2009 |
| | | | GBPm |
| | | | |
+-----------------------------------+----------+----------+----------+
| Release of unutilised provision | 0.6 | - | 3.0 |
| in relation to OFT fine* | | | |
+-----------------------------------+----------+----------+----------+
| Loss on sale of subsidiary | (0.2) | - | - |
| undertaking** | | | |
+-----------------------------------+----------+----------+----------+
| Redundancy and restructuring | (6.8) | (1.0) | (5.1) |
| charges*** | | | |
+-----------------------------------+----------+----------+----------+
| | (6.4) | (1.0) | (2.1) |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
*As part of the Office of Fair Trading's (OFT) review on tender activity in the
construction sector three subsidiaries within the Group, Sol Construction
Limited, Lemmeleg Limited and Richardson Projects Limited were fined a total of
GBP2.4m on 22 September 2009. The fines relate to a small number of tenders
performed in periods prior to their acquisition by the Group. The credit in the
current period relates to the recovery of a contingent asset for reimbursement
of such fines which was not previously anticipated as recoverable, and the
release of the remaining provision.
**On 30 June 2010, the Group entered into a sale agreement to dispose of Las
Plant Limited which carried out all of the Group's plant hire activities. The
disposal of the plant hire business is consistent with the Group's long term
policy to focus on its core activities.
Notes to the consolidated interim financial statements (continued)
***Restructuring charges comprised the cost of employee redundancies and related
costs principally associated with the integration of a number of our plumbing,
heating and electrical offices into our Maintenance and improvements business.
5. Finance costs
+-----------------------------------+----------+----------+----------+
| | | | |
| | 6 months | 6 months | Year |
| | to | to | ended |
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | GBPm | GBPm | 2009 |
| | | | GBPm |
+-----------------------------------+----------+----------+----------+
| Interest | | | |
+-----------------------------------+----------+----------+----------+
| Interest payable on bank loans | (1.2) | (0.8) | (1.0) |
| and overdrafts | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Other finance charges | | | |
+-----------------------------------+----------+----------+----------+
| Expected return on pension scheme | 2.2 | 1.8 | 3.5 |
| assets | | | |
+-----------------------------------+----------+----------+----------+
| Interest on pension scheme | (2.5) | (2.3) | (4.7) |
| liabilities | | | |
+-----------------------------------+----------+----------+----------+
| Net other finance charges | (0.3) | (0.5) | (1.2) |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Finance costs from continuing | (1.5) | (1.3) | (2.2) |
| operations | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Finance costs from discontinued | (0.7) | (1.2) | (2.8) |
| operations (note 7) | | | |
+-----------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------+----------+----------+----------+
| Total finance costs | (2.2) | (2.5) | (5.0) |
+-----------------------------------+----------+----------+----------+
6. Taxation from continuing operations
Taxation has been provided for the six months ended 30 June 2010 at an effective
rate of 25% (2009: 25%).
Notes to the consolidated interim financial statements (continued)
7. Discontinued operation
At 30 June 2009 and 31 December 2009 the Rok Development Limited business was
classified as a disposal group held for sale and, since Rok Development was also
a separate major line of business, as a discontinued operation. During this
period it was the Group's intention to dispose of Rok Development Limited as a
going concern and, at each reporting date, the disposal was anticipated to be
completed within one year. However, as a result of the exceptional lack of
commercial property market activity during late 2008 and 2009, the Group could
not complete the sale within the expected timeframe, though a number of
developments were disposed of individually. During the current period the group
has reconsidered the plan and has now substantially ceased the activities of Rok
Development and initiated a plan to sell the remaining assets separately.
Following an assessment of the planned disposal of the remaining assets, the
Group considers that the remaining inventory continues to meet the held for sale
criteria and that the revised plan continues to be part of the Group's single,
co-ordinated plan to dispose of the Development division. Therefore, the
results of the division remain classified as discontinuedin both the current and
prior periods.
+--------------------------------+----+---------+---------+----------+
| | | | | |
| | | 6 | 6 | Year |
| | | months | months | ended |
| | | to 30 | to | 31 |
| | | June | 30 June | December |
| | | 2010 | 2009 | 2009 |
| | | GBPm | GBPm | GBPm |
+--------------------------------+----+---------+---------+----------+
| Results of discontinued | | | | |
| operation | | | | |
+--------------------------------+----+---------+---------+----------+
| Revenue | | 2.2 | 2.4 | 7.9 |
+--------------------------------+----+---------+---------+----------+
| | | | | |
+--------------------------------+----+---------+---------+----------+
| Gross loss | | - | - | (0.3) |
+--------------------------------+----+---------+---------+----------+
| | | | | |
+--------------------------------+----+---------+---------+----------+
| Work in progress impairment | | - | (1.1) | (4.0) |
+--------------------------------+----+---------+---------+----------+
| Admin expenses | | (0.6) | - | - |
+--------------------------------+----+---------+---------+----------+
| Operating loss from | | (0.6) | (1.1) | (4.3) |
| discontinued operations | | | | |
+--------------------------------+----+---------+---------+----------+
| | | | | |
+--------------------------------+----+---------+---------+----------+
| Analysed as: | | | | |
+--------------------------------+----+---------+---------+----------+
| Underlying operating loss | | - | - | (0.3) |
+--------------------------------+----+---------+---------+----------+
| Work in progress impairment | | - | (1.1) | (4.0) |
+--------------------------------+----+---------+---------+----------+
| Other closure costs | | (0.6) | - | - |
+--------------------------------+----+---------+---------+----------+
| Loss from operations | | (0.6) | (1.1) | (4.3) |
+--------------------------------+----+---------+---------+----------+
| | | | | |
+--------------------------------+----+---------+---------+----------+
| Finance costs | | (0.7) | (1.2) | (2.8) |
+--------------------------------+----+---------+---------+----------+
| Loss before tax | | (1.3) | (2.3) | (7.1) |
+--------------------------------+----+---------+---------+----------+
| Income tax credit | | 0.3 | 0.6 | 2.5 |
+--------------------------------+----+---------+---------+----------+
| Loss for the period after tax | | (1.0) | (1.7) | (4.6) |
+--------------------------------+----+---------+---------+----------+
| | | | | |
+--------------------------------+----+---------+---------+----------+
| Earnings per share - | | | | |
| discontinued operation | | | | |
+--------------------------------+----+---------+---------+----------+
| Basic loss per share | | (0.5)p | (1.0)p | (2.6)p |
+--------------------------------+----+---------+---------+----------+
| Adjusted basic loss per share | | (0.5)p | (1.0)p | (2.6)p |
+--------------------------------+----+---------+---------+----------+
| | | | | |
+--------------------------------+----+---------+---------+----------+
| Diluted basic loss per share | | (0.5)p | (0.9)p | (2.6)p |
+--------------------------------+----+---------+---------+----------+
| Adjusted diluted basic loss | | (0.5)p | (0.9)p | (2.6)p |
| per 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 December |
| | | 2010 | 2009 | 2009 |
| | | GBPm | GBPm | GBPm |
+--------------------------------+----+----------+----------+-----------------+
| | | | | |
+--------------------------------+----+----------+----------+-----------------+
| Investments in joint ventures | | 1.8 | 2.4 | 1.8 |
+--------------------------------+----+----------+----------+-----------------+
| Inventories | | 12.2 | 19.4 | 13.2 |
+--------------------------------+----+----------+----------+-----------------+
| Trade and other payables | | - | (0.8) | - |
+--------------------------------+----+----------+----------+-----------------+
| | | 14.0 | 21.0 | 15.0 |
+--------------------------------+----+----------+----------+-----------------+
| | | | | | | | |
+--------------------------------+----+-+--------+-+--------+-+---------------+
Notes to the consolidated interim financial statements (continued)
8. Dividends
+-------------------------------------+---------+---------+----------+
| | 6 | 6 | Year |
| | months | months | ended |
| | to 30 | to | 31 |
| | June | 30 | December |
| | 2010 | June | 2009 |
| | GBPm | 2009 | GBPm |
| | | GBPm | |
+-------------------------------------+---------+---------+----------+
| Dividends paid 1.65p per ordinary | 3.0 | 2.2 | 3.5 |
| share (2009: 1.25p) | | | |
+-------------------------------------+---------+---------+----------+
An interim dividend of 0.5p per share (2009: 0.75p) will be paid on 8 October
2010 to members on the register at 27 August 2010.
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 17 September 2010. 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 17 September 2010.
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
9. Earnings per share
From continuing operations
+---------------+--------+---------+--------+---------+--------+---------+
| | | | |
| | 6 months to | 6 months to | Year ended |
| | 30 June 2010 | 30 June 2009 | 31 December |
| | | | 2009 |
| | | | |
+---------------+------------------+------------------+------------------+
| | Basic | Diluted | Basic | Diluted | Basic | Diluted |
| | pence | | Pence | | pence | |
| | | pence | | pence | | pence |
+---------------+--------+---------+--------+---------+--------+---------+
| Basic | (1.6) | (1.6) | 2.6 | 2.5 | 7.4 | 7.3 |
| earnings | | | | | | |
| per | | | | | | |
| share | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Less | (0.4) | (0.4) | - | - | (1.7) | (1.7) |
| OFT | | | | | | |
| provision | | | | | | |
| release, | | | | | | |
| not | | | | | | |
| taxable | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Add | 0.2 | 0.2 | 0.3 | 0.3 | 0.5 | 0.5 |
| intangible | | | | | | |
| asset | | | | | | |
| charges, | | | | | | |
| net of tax | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Add | 2.8 | 2.8 | 0.4 | 0.4 | 2.1 | 2.1 |
| restructuring | | | | | | |
| charges, net | | | | | | |
| of tax | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Adjusted | 1.0 | 1.0 | 3.3 | 3.2 | 8.3 | 8.2 |
| earning | | | | | | |
| per | | | | | | |
| share | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
From continuing and discontinued operations
+---------------+--------+---------+--------+---------+--------+---------+
| | | | |
+---------------+------------------+------------------+------------------+
| | Basic | Diluted | Basic | Diluted | Basic | Diluted |
| | pence | | Pence | | pence | |
| | | Pence | | pence | | Pence |
+---------------+--------+---------+--------+---------+--------+---------+
| Basic | (2.1) | (2.1) | 1.6 | 1.6 | 4.8 | 4.7 |
| earnings | | | | | | |
| per | | | | | | |
| share | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Less | (0.4) | (0.4) | - | - | (1.7) | (1.7) |
| OFT | | | | | | |
| provision | | | | | | |
| release, | | | | | | |
| not | | | | | | |
| taxable | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Add | 0.2 | 0.2 | 0.3 | 0.3 | 0.5 | 0.5 |
| intangible | | | | | | |
| asset | | | | | | |
| charges, | | | | | | |
| net of tax | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Add | 2.8 | 2.8 | 0.4 | 0.4 | 2.1 | 2.1 |
| restructuring | | | | | | |
| charges, net | | | | | | |
| of tax | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
| Adjusted | 0.5 | 0.5 | 2.3 | 2.3 | 5.7 | 5.6 |
| earning | | | | | | |
| per | | | | | | |
| share | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+
The calculation of basic earnings per share for the six months ended 30 June
2010 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 175,525,713 (2009: 175,729,246). 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 177,509,208 (2009: 178,996,323) average ordinary
shares after taking into account dilutive employee share options.On 30 June 2010
the Rok plc Employee Share Ownership Trust (ESOT) held 2,490,568 ordinary 2p
shares, representing approximately 1.4% of the issued share capital of the
Company.
Notes to the consolidated interim financial statements (continued)
10. Property, plant and equipment
During the period, the Group spent GBP2.1m on property, plant and equipment
additions. The Group also disposed of property, plant and equipment with a
carrying value of GBP1.3m for proceeds of GBP1.4m.
11. Analysis of net debt
+---------------------------------+-----------+-----------+----------+
| | | | |
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | GBPm | GBPm | 2009 |
| | | | GBPm |
+---------------------------------+-----------+-----------+----------+
| Cash and cash equivalents | 13.3 | 6.1 | 5.5 |
+---------------------------------+-----------+-----------+----------+
| Current interest bearing loans | (1.1) | (4.1) | (0.9) |
| and borrowings | | | |
+---------------------------------+-----------+-----------+----------+
| Non-current interest bearing | (59.8) | (59.0) | (51.3) |
| loans and borrowings | | | |
+---------------------------------+-----------+-----------+----------+
| Net debt | (47.6) | (57.0) | (46.7) |
+---------------------------------+-----------+-----------+----------+
12. Interest bearing loans and borrowings
At 30 June 2010 the Group had GBP81.0m of banking facilities under a club
arrangement with three major banks including a GBP13.5m secured term loan
expiring in March 2012 which amortises in line with Development asset disposals.
The Group also has a GBP67.5m secured Revolving Credit Facility expiring in
March 2012. All covenants were met during the half year.
13. Defined benefit pension schemes
The defined benefit obligation as at 30 June 2010 is calculated using the latest
actuarial valuation as at 30 June 2010. Since the year end the discount rate
applied to scheme liabilities has reduced by 0.4% to 5.3%. This has resulted in
an increase in the gross actuarial liability of GBP5.5m between 31 December 2009
and 30 June 2010. The defined benefit plan assets and liabilities have been
updated to reflect their market value as at 30 June 2010. 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.
14. Share capital
Share capital as at 30 June 2010 amounted to GBP3.6 million. At the 30 June 2010
and 31 December 2009 there were 179,310,087 of shares in issue.
15. 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 2009.
16. 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 2009 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
current recent recession in the UK has 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)
17. Status of accounts
The interim results for the six months ended 30 June 2010 and 30 June 2009 are
unaudited. The information for the year ended 31 December 2009 does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The figures for the year ended 31 December 2009 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. The Group has adopted and will produce statutory accounts under IFRS for
all material subsidiary companies from 1 January 2010.
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KKADDOBKDPFD
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