Source - RNS
RNS Number : 0075J
Stadium Group PLC
06 September 2016
 

Stadium Group plc

("Stadium", the "Company" or the "Group")

 

Half Yearly Report

 

Stadium Group Plc (AIM: SDM), a leading supplier of wireless solutions, power supplies and electronic assemblies, announces its unaudited interim results for the six months ended 30 June 2016.

 

Financial highlights

·     Order intake increased by 22.5% to £30.7m (H1 2015: £25.0m)

·     Group revenues of £24.3m (H1 2015: £25.1m) reflect the ongoing transition into higher margin design-led technology focused activities and lower activity in traditional Electronic Assembly

·     Technology Products revenues up 14.0% to £13.9m (H1 2015: £12.2m)

·     Normalised* gross margin up 250 bps 24.1% (H1 2015: 21.6%)

·     Normalised* operating profit up 18.8% to £1.9m (H1 2015: £1.6m)

·     Normalised* profit before tax up 14.3% to £1.6m (H1 2015: £1.4m)

·     Reported profit before tax up 5.8% to £0.71m (H1 2015: £0.67m)

·     Net debt reduced to £3.5m (H1 2015: £5.9m)

·     Normalised* earnings per share of 3.7p (H1 2015: 4.2p)

·     Reported earnings per share of 1.7p (H1 2015: 2.0p)

·     Interim dividend of 0.95p per share, an increase of 5.6% (H1 2015: 0.90p)

 

* Adjusted for non-recurring costs, amortisation of acquired intangibles and interest charged on the fair value of deferred consideration.

 

Operational highlights

·     Technology Products division accounted for 57% of total revenues (H1 2015: 49%)

·     Regional Design Centre opened in Stockholm to support growing wireless business

·     Stontronics, acquired in August 2015, now fully integrated and performing well

·     Leadership and technical talent development continues with several key appointments

·     UK operations optimised by consolidating four manufacturing sites into two

·     Group head office relocated to Reading

 

 

Commenting on the results and outlook, Chairman Nick Brayshaw OBE said:

 

"I am pleased to report that the half-year results show continued progress in transitioning Stadium into a design-led technology solutions business capable of supporting our customers across the globe from our network of regional design centres and manufacturing centres of excellence. 

 

We continue to believe that by developing a more robust and customer focused operating model we will support further profitable growth across the Group going forward. Given the visibility and rate of growth in our forward order book, we remain confident that we will return to our higher growth trajectory next year and beyond."

 

The half-yearly report will be available shortly on the Company's investor website: www.stadiuminvestors.com

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

Stadium Group plc

www.stadiumgroupplc.com

Charlie Peppiatt, Chief Executive Officer

Tel: 0118 931 1199

Joanne Estell, Chief Financial Officer

Mob: 07807 095 419

 

 

Walbrook PR

Tel: 020 7933 8780 or [email protected]

Paul McManus

Mob: 07980 541 893

Helen Cresswell

Mob: 07841 917 679

 

 

N+1 Singer

 

Richard Lindley

Tel: 020 7496 3000

 

About Stadium Group plc (www.stadiumgroupplc.com)

 

Stadium Group plc is a leading supplier of wireless solutions, power supplies and electronic assemblies with design and manufacturing operations in the UK and Asia. The Company consists of two divisions:

 

1.    Technology Products (57% of H1 2016 revenues)

·     Wireless solutions - design, integration and manufacture of "machine-to-machine" ("M2M") and "Internet of Things" ("IoT") wireless solutions

·     Power Supplies (including Stontronics) - custom and standard power product solutions from 1W to 10kW

·     Human Machine Interface - intelligent "HMI" integrated solutions

 

2.    Electronic Assembly (43% of H1 2016 revenues) - previously known as Electronic Manufacturing Services

·     Electronic manufacturing services to global original equipment manufacturers

 

 

Chairman's statement

Unaudited interim results for the six months ended 30 June 2016

 

Overview

 

I am pleased to report that the half-year results show continued progress in transitioning Stadium into a design-led technology solutions business capable of supporting our customers across the globe from a network of Regional Design Centres and manufacturing centres of excellence. 

 

Our higher value and higher margin Technology Products division continues to grow, delivering an uplift in sales of 14.0% in the period, contributing 57% of total revenues. Overall, we have benefitted from the margin enhancing contribution from Technology Products versus our Electronic Assembly business. Whilst overall revenues are slightly down, our actions to reduce our fixed cost base and drive ongoing efficiency savings, as well as the improved revenue mix, have ensured that normalised1 profit before tax grew by 14.3% to £1.6m (H1 2015: £1.4m).

 

As announced in our trading update on 23 June 2016, Group revenues for the half year were behind the Board's expectations due to a further decline in the Electronic Assembly business and the loss of a significant Wireless customer, causing a delay in our anticipated growth plans. Whilst the Wireless customer did not terminate the supply agreement until June, there was a period of reduced call-off that preceded notification of their decision. The Board remains confident that our customer-focused design-led proposition is compelling and we are encouraged by a strong Group order book which now stands at £25.4m, an improvement of 33% year-on-year. Whilst we are disappointed not to have delivered the accelerated sales growth that we had anticipated, we still expect to deliver incremental growth in normalised profit before tax and higher margins for the year.

1 (table below shows normalised profit adjustments)

 

Financial highlights

 

Revenues for the first half of the year were down slightly on the prior year to £24.3m (H1 2015: £25.1m), largely as a result of a reduction in sales from the Electronic Assembly business and the loss of a key Wireless customer, with a period of reduced call-off prior to notification of termination. We continue to make good progress in transitioning the business towards technology-led products with the Technology Products division sales now contributing £13.9m (57% of total revenues) against the £12.2m sales recorded for the division in the six months ended 30 June 2015 (49% of total revenues). Revenues from the Electronic Assembly division showed a quicker than expected decline, down 19.4% to £10.4m (H1 2015: £12.9m), reflecting further reductions in sales volume, pricing pressure and our continuing efforts to move away from non-core, low margin sales and to better utilise our Electronic Assembly capacity to support the Technology Products division.

 

Overall, gross margins continue to improve as a result of the greater contribution from our higher margin Technology Products division and the improvement in our revenue mix, as well as increased operating efficiencies, leading to an increase of 250 basis points to 24.1% (H1 2015: 21.6%).

 

Normalised operating expenses increased by £0.2m year-on-year, due to the incremental operating costs associated with the Stontronics acquisition, as well as the continued investment in our Regional Design Centres. However, on a like for like basis operating expenses decreased by £0.3m during the period due to prior year reorganisation activities, including the Asia factory relocation, the synergy benefits from integrating the recent Stontronics acquisition into Stadium Power and the consolidation of UK manufacturing into two sites.

 

The period delivered an increase of 18.8% in normalised operating profit to £1.9m (H1 2015: £1.6m) and normalised profit before tax grew by 14.3% to £1.6m (H1 2015: £1.4m).

 

Excluding adjustments for non-recurring items including reorganisation costs, acquisition costs, amortisation of acquired intangible assets and interest charged on the fair value of deferred consideration, reported profit before tax was 5.8% ahead of the prior year at £0.71m (H1 2015: £0.67m).

 

 

Foreign currency effects

The Group has minimal exposure to transactional currency effects, as the currency of revenue and cost streams are largely matched. There is a translation effect on consolidation of trading activities in Asia which is realised at the point of payment. The appreciation of the average HK dollar exchange rate against sterling, compared to the previous period, increased revenues by approximately £0.3m and operating profits by approximately £0.04m for the period. A 1% appreciation in the average HK dollar / sterling exchange rate would have the effect of improving reported sales by c. £80k and operating profits by c. £6k.

Earnings per share

 

At the half year, basic normalised earnings per share from continuing operations were 3.7 pence (H1 2015: 4.2 pence) reflecting the higher average number of shares in issue following the placing to fund the acquisition of Stontronics in August 2015. On a statutory basis, earnings per share from continuing operations were 1.7 pence (H1 2015: 2.0 pence).

 

Exceptional and other items relating to continuing activities excluded from normalised profit before tax are detailed below:

 

 

Six months ended

30 June 2016

£000's

Six months ended

30 June 2015

£000's

Profit before tax attributable to equity holders of the parent

709

670

Adjustments:

 

 

Amortisation of acquired intangible assets

449

607

Stadium Asia site reorganisation costs

-

68

Technology division reorganisation and severance costs

383

-

Net present value financing costs of SUW Ltd acquisition

82

63

Normalised profit before tax from continuing operations

1,623

1,408

 

 

Statement of financial position and cash flow

 

Net cash from trading activities was positive in the first half of the year. Operating cash conversion, measured as net cash from trading activities after investment in capital expenditure and capitalised development costs (£1.7m), was 165% of operating profit.

 

In the period we increased investment in capital expenditure to £0.5m (H1 2015: £0.2m) to further upgrade our manufacturing facilities and undertake the initial facility set-up costs for the Regional Design Centres.  Development costs of £0.3m (H1 2015: £0.2m) were also capitalised reflecting the increased activities at our Regional Design Centres.

 

The cash balance as at 30 June 2016 was £4.7m (H1 2015: £2.8m) and, after deducting bank loans of £7.6m (H1 2015: £8.0m) and finance leases of £0.6m (H1 2015: £0.7m), net debt was £3.5m (H1 2015: £5.9m).

 

At the end of the period, the Group had overdraft facilities across the Group of £0.5m (H1 2015: £0.5m), which were unused, as well as access to an invoice discount facility of £3.2m of which £26k was being utilised at the balance sheet date. 

 

Free cash flow in the period was £1.0m (H1 2015: outflow £-0.6m). Free cash flow is stated after interest, tax and pensions financing, but before acquisitions, financing activities and dividends.

 

 

 

 

 

 

 

 

Six months ended

30 June 2016

£000's

Six months ended

30 June 2015

£000's

Operating Profit

1,049

966

Depreciation/ amortisation/ profit on sale of fixed assets, and other operating cash flow movements

1,276

1,083

Working capital

193

(1,865)

Proceeds from sale of property, plant and equipment

5

2

Purchase of plant and equipment

(503)

(183)

Development costs

(287)

(155)

Pension

(60)

(117)

Tax

(373)

(34)

Interest paid

(300)

(345)

Free cash flow

1,000

(648)

 

 

 

 

Operating Review

 

At an operational level the clear focus of the Group remains on ensuring that we have the right key infrastructure in place to continue to drive the sales growth of Technology Products and that our manufacturing capabilities continue to be world-class and sufficiently agile to support future growth. A particularly important element of this has been the establishment of our strategically located Regional Design Centres, which will help to maintain and enhance our compelling customer-focused design-led proposition. In addition, management has focused on the successful integration of Stontronics, acquired in August last year.

 

Technology Products

 

Technology Products revenues increased by 14.0% to £13.9m (H1 2015: £12.2m) and contributed 57% of total revenues. The division comprises our Power, Wireless and Human Machine Interface (HMI) businesses and contributed £1.2m (62.0%) of the overall normalised operating profits of the Group.

 

We strongly believe that to ensure continued growth across the Technology Products division we must continue to develop a more customer focused operating model built around establishing strategically located and appropriately staffed Regional Design Centres, manufacturing centres of excellence and regional fulfilment centres. This will not only support growth, but will also ensure that we can offer an integrated technology solution to our global customers, addressing their key needs in power, wireless capability and HMI technologies along with a tailored and versatile fulfilment model.

 

At the beginning of last year, we opened three Regional Design Centres, one in Zhangjiang Hi-Tech Park in Shanghai, another near Southampton and the third on the new Research Park in Norwich, to provide in-depth design and technology development support for our customers in their key geographical locations. The early success of this strategy is already evident in the step change in our order book. To accelerate the execution of this strategy and meet customer demand, in May we announced the opening of our fourth design centre in Stockholm at Kista Science City, one of the world's leading high-tech clusters and a global hub for wireless technology.

 

Following last year's successful relocation to our new and upgraded manufacturing centre of excellence in South China, we have reviewed our European manufacturing footprint and have consolidated four separate UK locations into two main manufacturing centres of excellence at Hartlepool and Southampton. We have also enhanced our regional fulfilment centre model with an upgrade of the facility in Reading to become the Group's distribution and service centre for Europe. The Group's head office has also been relocated to Reading. We also completed the successful move to a new distribution and logistics centre in Asia located in Kowloon, Hong Kong, ensuring that we can meet customer delivery and supply chain requirements in different geographies. 

 

Overall our Power division has benefitted from the contribution of Stontronics, which has performed in line with expectations. The team was particularly buoyed by becoming the exclusive approved external power supply manufacturer to the new Raspberry Pi 3, a credit-card-sized single-board computer from the Raspberry Pi Foundation, which was launched in February 2016. The order book and emerging opportunities within the Power division are very encouraging.

 

Wireless sales have suffered some negative impact from the loss of a significant customer in the telematics space where there was a period of reduced call-off for this product followed by the ultimate termination of the supply agreement. The circumstances which surrounded this customer's decision are unique and our investment in capability and service will help to ensure that this is a one off event. Whilst first half sales have therefore been disappointing, the growth in the order book and other opportunities identified point toward a stronger second half and growing positive momentum into next year.

 

Our HMI business has performed ahead of expectations and the second half is also expected to benefit from a number of new orders, including instrumentation and lighting systems for the aerospace industry as well as a control system for use in military vehicles and other defence related contracts.

 

Electronic Assembly

 

As outlined in our recent trading update, Electronic Assembly revenues have declined faster than expected in the first half, driven by a slowdown in several markets, continued pricing pressure, and a number of end of life products. This has been largely off-set by proactive cost reduction activity and ongoing efficiency improvements.

 

Our Electronic Assembly business continues to operate in a challenging environment with pressure on pricing and over-supply in the market. We continue to explore business development opportunities in this area as the Electronic Assembly division remains a key element within our overall sales strategy, particularly targeting higher value business where we can leverage our technology know-how and expertise. Following the upgrade of our operations in Asia and the move to new hi-tech facilities at Dongkeng Hi-Tech Industrial Park near Dongguan in South China, the Electronic Assembly division is well equipped and positioned to provide hi-tech production capabilities to the Technology Products division as a vertically integrated supplier across the various business units.

 

Significantly the two main manufacturing centres of excellence in Hartlepool and Dongguan are providing many of the manufactured products for our Technology Products division, which comprised approximately 25% of their output in the period. Following the closure of the Warrington and Diss sites, and with continued growth in the Technology Products order book, we expect that this ratio of vertically integrated supply will become more than half of their output in the short to medium term. 

 

Pension Schemes

 

Over recent years Stadium's distributable reserves have increased, helped by the improvement in underlying profits and a reduction in the total pension deficit under IFRS from £6.9m in 2012 to £5.2m in 2015.  

 

However, post the EU Referendum result on 23 June 2016, corporate bond yields have fallen significantly, which may result in a significant increase in the value of the Group's legacy pension liabilities. As corporate bond yields are used to discount the Group's pension liability under IAS 19, if they remain at the current low levels then this could impact the Company's distributable reserves, which are required in order to pay dividends. We will continue to monitor the situation and there are options available to Stadium to respond to this challenge, if necessary.

 

Dividend

 

The Board continues to maintain a progressive dividend policy aligned to the free cash generation of the Group and the investment required to deliver sustainable growth in revenues and profits. The Board announces an interim dividend of 0.95 pence per share, an increase of 5.6% on the 2015 interim dividend (2015: 0.9 pence). The dividend will be paid on 21 October 2016 to shareholders on the register at the close of business on 23 September 2016. The ex-dividend date is 22 September 2016. 

 

Outlook

 

As outlined in our recent trading statement, we expect to see further growth in the contribution from our Technology Products division, which is on track to contribute approximately 60% of total revenues over the course of the year. As a consequence of the enlarged order book and the traditional second half weighting of the business, we expect to deliver a materially higher profit in the second half of the financial year compared to the first half of the year and expect overall reported profits for the year to be in line with current market expectations.

 

We continue to believe that by developing a more robust and customer focused operating model, and by establishing strategically located Regional Design Centres, manufacturing centres of excellence and regional fulfilment centres, we will support further profitable growth across the Group going forward. Given the visibility and rate of growth in our forward order book, we remain confident that we will return to a higher growth trajectory next year and beyond.

 

 

Nick Brayshaw OBE

Chairman

 

6 September 2016

 

 

 

Consolidated income statement (unaudited)

for the six months ended 30 June 2016

 

 

Note

Six months

ended

30 June

2016

£000's

 Six months

ended

30 June

2015

£000's

 Year

ended

31 December

2015

£000's

Continuing operations

 

 

 

 

Revenue

2

24,335

25,126

53,872

Cost of sales

 

(18,477)

(19,709)

(41,365)

Cost of sales - non-recurring

 

(135)

-

-

Total cost of sales

 

(18,612)

(19,709)

(41,365)

Gross profit

 

5,723

5,417

12,507

Operating expenses

 

(4,426)

(4,383)

(8,955)

Operating expenses - non-recurring

 

(248)

(68)

(1,150)

Total operating expenses

3

(4,674)

(4,451)

(10,105)

Operating profit

2

1,049

966

2,402

Finance expense

4

(386)

(379)

(783)

Finance income

4

46

83

85

Profit before tax

 

709

670

1,704

Taxation

 

(77)

(54)

(321)

Profit for the period

2

632

616

1,383

Basic earnings per share (p)

6

1.7

2.0

4.2

Diluted earnings per share (p)

6

1.6

1.8

3.8

 

 

 

 

Consolidated statement of comprehensive income (unaudited)

for the six months ended 30 June 2016

 

 

Note

Six months

ended

30 June

2016

 £000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Profit for the period attributable to equity holders of the parent

2

632

616

1,383

Other comprehensive income

 

 

 

 

Exchange differences on translating foreign operations

 

440

(73)

471

Actuarial gain in pension scheme net of deferred tax (not measured mid-year)

 

-

-

900

Other comprehensive income for the period, net of tax

 

440

(73)

1,371

Total comprehensive income for the period attributable to equity holders of the parent

 

1,072

543

2,754

 

 

 

 

Consolidated statement of financial position (unaudited)

at 30 June 2016

 

 

Note

30 June

2016

£000's

30 June

2015

£000's

31 December

2015

£000's

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

4,678

3,335

4,363

Goodwill

 

15,379

11,149

15,379

Other intangible assets

 

1,947

1,763

2,223

Deferred tax assets

 

1,028

1,307

1,041

Other receivables

 

159

153

156

 

 

23,191

17,707

23,162

Current assets

 

 

 

 

Inventories

 

7,337

7,558

7,518

Trade and other receivables

 

11,617

11,977

13,739

Cash and cash equivalents

9

4,679

5,952

8,489

 

 

23,633

25,487

29,746

Total assets

 

46,824

43,194

52,908

Equity

 

 

 

 

Equity share capital

 

1,864

1,554

1,826

Share premium

 

11,232

5,302

10,597

Capital redemption reserve

 

88

88

88

Translation reserve

 

941

(43)

501

Retained earnings

 

5,275

3,621

5,146

Total equity

 

19,400

10,522

18,158

Non-current liabilities

 

 

 

 

Bank loans

7,9

7,050

7,625

7,350

Finance leases

 

440

493

455

Other non-trade payables

 

2,232

1,815

2,150

Deferred tax

 

337

281

421

Gross pension liability

 

5,145

6,536

5,205

Total non-current liabilities

 

15,204

16,750

15,581

Current liabilities

 

 

 

 

Bank loans and overdrafts

9

575

3,532

2,814

Invoice securitisation

 

26

-

2,399

Finance leases

 

156

162

153

Trade payables

 

8,417

8,378

8,773

Current tax payable

 

346

569

576

Other payables

 

2,385

3,118

4,139

Provisions

 

315

163

315

Total current liabilities

 

12,220

15,922

19,169

Total liabilities

 

27,424

32,672

34,750

Total equity and liabilities

 

46,824

43,194

52,908

 

 

 

 

 

Consolidated statement of changes in equity (unaudited)

for the six months ended 30 June 2016

 

 

Ordinary

shares

£000's

Share

premium

£000's

Capital

redemption

 reserve

£000's

Translation

reserve

 £000's

 Retained

earnings

£000's

Total

£000's

Balance at 31 December 2014

1,554

5,302

88

30

3,263

10,237

Changes in equity for the first six months of 2015

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

(73)

-

(73)

Profit for the period

-

-

-

-

616

616

Actuarial gain/(loss) on defined benefit plan (not measured mid year)

-

-

-

-

-

-

Total comprehensive (loss)/income for the period

-

-

-

(73)

616

543

Transactions with owners in their capacity as owners

 

 

 

 

 

 

 

 

Equity settled share based payment transactions

-

-

-

-

177

177

Issue of share capital

-

-

--

-

-

-

Dividends

-

-

-

-

(435)

(435)

Balance at 30 June 2015

1,554

5,302

88

(43)

3,621

10,522

Changes in equity for the second six months of 2015

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

544

-

544

Profit for the period

-

-

-

-

767

767

Actuarial gain/(loss) on defined benefit plan

-

-

-

-

900

900

Total comprehensive (loss)/income for the period

-

-

-

544

1,667

2,211

Transactions with owners in their capacity as owners

 

 

 

 

 

 

 

 

Equity settled share based payment transactions

-

-

-

-

187

187

Issue of share capital

272

5,727

-

-

-

5,999

Payment of transaction costs

-

(432)

-

-

-

(432)

Dividends

-

-

-

-

(329)

(329)

Balance at 31 December 2015

1,826

10,597

88

501

5,146

18,158

Changes in equity for the first six months of 2016

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

440

-

440

Profit for the period

-

-

-

-

632

632

Actuarial gain/(loss) on defined benefit plan (not measured mid year)

-

-

-

-

-

-

Total comprehensive income for the period

-

-

-

440

632

1,072

Transactions with owners in their capacity as owners

 

 

 

 

 

 

 

 

Equity settled share based payment transactions

-

-

-

-

168

168

Issue of share capital

38

635

-

-

-

673

Dividends

-

-

-

-

(671)

(671)

Balance at 30 June 2016

1,864

11,232

88

941

5,275

19,400

                       

 

 

Consolidated statement of cash flows (unaudited)

for the six months ended 30 June 2016

 

 

Note

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Net cash flow from operating activities

8

2,085

33

2,868

Investing activities

 

 

 

 

Acquisition of subsidiaries, net of cash acquired

 

-

-

(4,738)

Purchase of property, plant and equipment

 

(503)

(183)

(1,465)

Sale of property, plant and equipment

 

5

2

40

Development costs

 

(287)

(155)

(385)

Cash flows from investing activities

 

(785)

(336)

(6,548)

Financing activities

 

 

 

 

Equity share capital subscribed

 

673

-

6,000

Payment of share issue transaction costs

 

-

-

(432)

Interest paid

 

(300)

(345)

(673)

Non - operating loan payments received

 

22

107

112

Net proceeds/(repayments) from use of invoice discounting

 

(2,373)

-

2,023

Proceeds from new borrowings received

 

-

-

-

Repayment of borrowings

 

(250)

-

(125)

Finance lease repayments

 

(84)

(118)

(233)

Dividends paid on ordinary shares

5

(671)

(435)

(764)

Cash flows from financing activities

 

(2,983)

(791)

5,908

Net (decrease)/ increase in cash and cash equivalents

 

(1,683)

(1,094)

2,228

Cash and cash equivalents at start of period

 

6,200

3,905

3,906

Exchange gains on cash and cash equivalents

 

162

(15)

66

Cash and cash equivalents at end of period

 

4,679

2,796

6,200

           

 

 

 

 

 

 

 

Notes to the financial statements

 

1. Basis of preparation

The annual financial statements of Stadium Group plc for the year ending 31 December 2016 will be prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as adopted for use by the European Union (EU) effective at 31 December 2016 and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. Accordingly, the interim financial report has been prepared using accounting policies consistent with those which will be adopted by the Group in the financial statements and in compliance with IAS 34 Interim Financial Reporting.

 

The Group's IFRS accounting policies, set out below, have been consistently applied to all the periods presented. The information has been prepared under the historical cost basis.

 

The comparative figures for the year ended 31 December 2015 do not constitute statutory accounts for the purposes of Section 435 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 December 2015 has been delivered to the Registrar of Companies and contained an unqualified Auditor's report in accordance with Section 495 of the Companies Act 2006.

 

Basis of consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

 

De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the Company considers all relevant facts and circumstances, including:

 

- the size of the Company's voting rights relative to both the size and dispersion of other parties who hold voting rights;

- substantive potential voting rights held by the Company and by other parties;

- other contractual arrangements; and

- historic patterns in voting attendance.

 

The consolidated financial statements present the results of the Company and its subsidiaries (the "Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

 

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

 

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date, based on the probability of a payment being made. Subsequent changes to the fair value of contingent consideration that is deemed to be an asset or liability are recognised in accordance with IAS 39 in profit and loss.

 

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM.

 

Goodwill

Goodwill arising on consolidation consists of the excess of the fair value of the consideration over the fair value of the Group's interest in the identifiable tangible and intangible assets net of liabilities including contingencies of the business acquired at the date of acquisition.

Goodwill is recognised as an asset at cost less any recognised impairment losses. It is reviewed for impairment at least annually and any impairment is recognised immediately in the income statement.

 

Revenue

Revenue is measured at the fair value of goods provided to customers net of returns, discounts, value added tax and other sales taxes. Revenue from the sales of goods is recognised when the Group has transferred the significant risks and rewards of ownership to the buyer and it is probable that the Group will receive the previously agreed upon payment. These criteria are considered to be met when the goods are delivered to the buyer. Where the buyer has a right of return, the Group defers recognition of revenue until the right to return has lapsed. Where warranties are offered to customers, revenue is recognised in the period where the goods are delivered less an appropriate provision for returns based on past experience.

 

Provided the amount of revenue can be measured reliably and it is probable that the Group will receive any consideration, revenue for services is recognised in the period in which they are rendered.

 

 

 

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment losses.

 

Depreciation is charged at rates calculated to write down the cost of assets (excluding freehold land) over their estimated useful lives by equal instalments at the following rates:

 

Freehold buildings              2%

Plant and machinery           10%-25%

Fixtures and equipment     10%-25%

 

Useful lives and residual values are reviewed annually.

 

The gain or loss arising on disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in income.

 

Inventories

Inventories are stated at the lower of cost and estimated net realisable value. Cost is determined on a first-in, first-out basis including transport and handling costs and, in the case of manufactured products, includes all direct expenditure and production overheads based on normal levels of activity.

 

Deferred taxation

Deferred taxation is recognised in respect of all temporary differences that have originated but not reversed at the reporting date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the reporting date.

 

A deferred tax asset is regarded as recoverable and is therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable surpluses from which the future reversal of the underlying temporary differences can be deducted. Deferred tax balances are not discounted.

Other intangible assets

Other intangible assets are shown at historical cost less accumulated amortisation and impairment losses.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of the intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life either in use or under development are tested for impairment at each reporting date. Other intangible assets are amortised from the date they are available for use. The useful lives are as follows:

 

Internally generated:

Development costs             up to five years, consistent with the revenue generation profile of the product

Externally acquired:

Customer relationships     three to five years

Customer order books       one year

 

Amortisation periods and methods are reviewed annually and adjusted if appropriate. Amortisation of each of the above classes is charged to Operating expenses in the Consolidated income statement.

 

Share based payments

Employee share options are measured at fair value at grant date using the Black-Scholes model. The fair value is expensed on a straight-line basis over the vesting period, based on an estimate of the number of options that will eventually vest.

 

Pension costs

 

Defined benefit scheme

Assets and liabilities arising from retirement benefit obligations and the related funding are reflected at fair value in the financial statements and operating and finance costs are recognised in the financial periods in which they arise. Gains and losses arising from actuarial experience during the accounting period are recognised in other comprehensive income.

 

Defined contribution schemes

Contributions payable are charged to the income statement in the accounting period in which they are incurred.

 

Foreign currencies

Transactions denominated in foreign currencies are recorded at the prevailing rate on the date of the transaction.

 

Monetary assets and liabilities denominated in foreign currencies are translated into Sterling (the Group's presentational currency) at the rate prevailing at the period end. Gains and losses arising on the translation of foreign currencies are dealt with as part of operating profit.

 

The assets and liabilities of foreign subsidiary undertakings are translated into Sterling, the presentational currency of the Group, at the period end exchange rate.

 

The income and expenditure of foreign subsidiary undertakings are translated into Sterling at the average exchange rate prevailing during the period. Exchange differences arising on retranslation of opening assets and liabilities, long term financing denominated in foreign currency and the trading of foreign subsidiary undertakings are taken directly to the translation reserve using the net investment method.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. The Group has elected to treat goodwill and fair value adjustments arising on acquisitions before the date of transition to IFRS as Sterling denominated assets and liabilities.

 

Provisions

A provision is recognised in the consolidated statement of financial position when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. A warranty provision is recognised when the related goods are sold. The provision is based upon historical customer claims data relative to levels of sales activity.

 

Non-recurring costs

Certain costs have been classified on the face of the consolidated income statement as "non-recurring". These are material items which individually or, if of a similar type, in aggregate, need to be disclosed by virtue of their size or incidence for the financial statements to give a true and fair view. These transactions are of a nature that will not be ongoing in the ordinary course of trading and the Group has classified in this manner costs incurred in restructuring and reorganising the business.

 

Research and development

Research expenditure is charged to the income statement as an expense when incurred. Development expenditure is capitalised as an internally generated intangible asset once criteria relating to the product's technical and commercial feasibility have been met and the decision to complete the development has been taken and resources have been committed to the completion of the project. Development expenditure is stated at cost less accumulated amortisation and impairment losses. Development costs are amortised over varying periods of up to five years in a profile that matches the revenue generation profile of the product.

 

Leased assets

Leases of property, plant and equipment where the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases. Assets held under finance leases are capitalised at fair value of the leases, unless the present value of the lease payments is lower. The corresponding leasing commitments, net of finance charges, are included in liabilities.

 

Leasing payments are analysed between capital and interest components so the interest element is charged to the income statement over the period of the lease at the constant periodic rate of interest on the remaining balance of the liability outstanding.

 

Depreciation on assets held under finance leases is charged to the income statement over the useful life of the asset.

 

All other leases are treated as operating leases with annual rentals charged to the income statement, net of any incentives granted to the lessee, over the term of the lease.

 

Financial instruments

The Group's financial instruments comprise borrowings, some cash and liquid resources and items such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to manage the finance of the Group's operations.

 

Financial assets and financial liabilities are recognised in the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

 

Trade receivables

Trade receivables do not carry any interest and are stated at their nominal value less appropriate allowances for estimated irrecoverable amounts. Such allowances aim to ensure that receivables are only recognised to the extent to which they are recoverable. Provisions created for irrecoverable amounts are recorded in a separate allowance account with the loss being recognised within the consolidated income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value is written off against the associated provision.

 

Cash and cash equivalents

Cash includes bank current accounts and petty cash balances, which are subject to insignificant risk of changes in value.

 

Bank borrowings

Interest bearing bank loans and overdrafts are recorded at the fair value of proceeds received net of any transaction costs. Such loans are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

 

Trade payables

Trade payables do not carry any interest and are stated at their nominal value.

 

Invoice discounting

Amounts due in respect of invoice discounting are separately disclosed as current liabilities. The Group can use

these facilities to draw down a percentage of the value of certain sales invoices. The management and collection

of trade receivables remains with the Group and it therefore retains the risks and rewards of ownership.

 

Equity instruments

Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.

 

It has been, throughout the period under review, the Group's policy that no trading in financial instruments shall be undertaken. The Group does not consider that it has any obligations or rights under derivative financial instruments.

 

The main risks arising from the Group's financial instruments are credit risk, interest rate risk, liquidity risk and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and these policies are summarised below.

 

·      Credit risk

The Group has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. Credit evaluations are carried out on all significant prospective customers and all existing customers requiring credit beyond a certain threshold. Credit risk is actively managed. Remedial actions are taken, including the variation of terms of trade under guidance from senior management, where credit risk is deemed to have risen to an unacceptable level.

 

·      Interest rate risk

The Group finances its operations through a mixture of retained profits and bank borrowings. The Group holds cash and borrowings in various currencies at floating rates of interest.

 

·      Liquidity risk

As regards liquidity, the Group's policy is to maintain undrawn overdraft borrowing facilities in order to provide flexibility in the management of the Group's liquidity.

 

·      Foreign currency risk

The Group has transactional and translational currency exposures. Transactional exposures arise from sales or purchases by operating units in currencies other than Sterling, being the Group's functional currency. The Group matches payments and receipts to minimise exposure, and buys the currency when the liability falls due. Translational exposure arises when the results of Stadium Asia, which are reported in Hong Kong Dollars, are translated into Sterling for inclusion in the Group results. Part of this exposure is hedged by entering into loan facilities denominated in US Dollars.

 

Accounting estimates and judgements

The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are shown below.

 

·      Key sources of estimation uncertainty

 

The stock provision is based on average loss rates of stock in recent months. The provision makes use of stock counts performed which is considered to be representative of all stock items held.

 

Obligations under the final salary pension scheme are affected by the discount rate applied to future pension obligations, the expected rate of return on the scheme's investments, the rate of inflation in future salaries and pensions and the mortality rate of scheme members. The assumptions over these factors are updated annually by the scheme actuary and the obligation to make future pension payments is re-evaluated at the annual reporting date.

 

Goodwill is evaluated for impairment at each reporting date. The recoverable amounts of cash generating units have been estimated based on value in use calculations.               

 

Trade and other receivables are recognised to the extent that, in the opinion of the directors, they are recoverable in the ordinary course of business. Risk arises from the potential of any customer failing to meet their contractual obligations and settle debts when due. It is Group policy to assess creditworthiness of new customers, to review and, where necessary, renegotiate terms of trade from customers with which it has a good trading history, and to actively monitor customer compliance, ensuring that trading terms are adhered to.

 

Identified intangibles acquired in business combinations are recognised separately from goodwill.  An intangible asset is identified if it arises from contractual or legal rights or if it is separable.  Determining the fair value of intangible assets acquired requires estimates of the future cash flows related to the intangibles and a suitable discount rate to calculate the present value. No acquired intangibles were recognised in the period.

 

Transactions classified as non-recurring require judgement to be exercised in identifying which items are of a nature that they will not be expected to recur in the ordinary course of trade and are material for the financial statements to present a true and fair view.

 

 

 

 

                                                             

                                                   

                                                           

 

2. Segmental reporting analysis

By operating segment

Six months ended 30 June 2016

 

 

Technology

£000's

 

 

Electronic Assembly

£000's

 

Non-recurring

costs

£000's

Total

£000's

Revenue - external customers

 

13,908

10,427

-

24,335

Segment profit before Group charges

 

1,390

1,309

(383)

2,316

Group charges

 

(672)

(595)

-

(1,267)

Operating profit

 

718

714

(383)

1,049

Net interest expense

 

 

 

 

(340)

Taxation

 

 

 

 

(77)

Profit for the period

 

 

 

 

632

 

Six months ended 30 June 2015

 

 

 

 

Technology

£000's

 

 

Electronic Assembly

£000's

 

Non-recurring

costs

£000's

Total

£000's

Revenue - external customers

 

12,241

12,885

-

25,126

Segment profit before Group charges

 

1,127

1,155

(68)

2,214

Group charges

 

(586)

(662)

-

(1,248)

Operating profit

 

541

493

(68)

966

Net interest expense

 

 

 

 

(296)

Taxation

 

 

 

 

(54)

Profit for the period

 

 

 

 

616

 

 

Six months ended 30 June 2016

 

Technology

£000's

Electronic Assembly

£000's

Unallocated

and

adjustments

£000's

Total

£000's

Segment assets

 

11,963

13,774

 

21,087

46,824

Segment liabilities

 

(4,970)

(6,810)

 

(15,644)

(27,424)

Segment net assets

 

6,993

6,964

 

5,443

19,400

Expenditure on property, plant and equipment

 

286

217

 

 

-

503

Depreciation and amortisation

 

621

316

 

-

937

 

 

 

Six months ended 30 June 2015

 

Technology

£000's

Electronic Assembly

£000's

Unallocated

and

adjustments

£000's

Total

£000's

Segment assets

 

10,452

14,333

 

18,409

43,194

Segment liabilities

 

(4,669)

(7,819)

 

(20,184)

(32,672)

Segment net assets

 

5,783

6,514

 

(1,775)

10,522

Expenditure on property, plant and equipment

 

114

69

 

 

-

183

Depreciation and amortisation

 

552

234

 

-

786

 

 

By geographic location

Six months ended 30 June 2016

Revenue -

external

customers

by location

of customer

£000's

Net assets

by location

of assets

£000's

Capital

expenditure

by location

of assets

£000's

UK

15,485

15,603

342

Europe

4,741

45

95

Asia Pacific

1,091

3,752

66

Americas

3,018

-

-

 

24,335

19,400

503

 

 

Six months ended 30 June 2015

Revenue -

external

customers

by location

of customer

£000's

Net assets

by location

of assets

£000's

Capital

expenditure

by location

of assets

£000's

UK

13,389

7,240

175

Europe

4,273

-

-

Asia Pacific

2,474

3,282

8

Americas

4,990

-

-

 

25,126

10,522

183

 

 

3. Operating expenses

Operating expenses include one-off items as follows:

 

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Included within operating expenses are the following one-off items, which are considered material due to their size and nature, or a combination of both:

Electronic Assembly division reorganisation costs

-

-

(156)

Technology Products division reorganisation

(383)

-

(178)

Asia factory relocation

-

(68)

(615)

Acquisition costs of subsidiaries

-

-

(201)

 

4. Finance costs comprises:

Finance cost (net) comprises:

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Interest payable on bank loans, overdrafts and invoice discounting

(105)

(105)

(231)

Other finance costs

(281)

(274)

(552)

 

(386)

(379)

(783)

 

 

 

 

Other finance costs comprise:

 

 

 

Net interest on the net defined benefits pension scheme liabilities

(192)

(198)

(395)

Interest on finance leases

(7)

(13)

(23)

Interest charge on the fair value of deferred consideration

(82)

(63)

(134)

 

(281)

(274)

(552)

 

Finance income comprises:

 

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Non-operating loan interest income

(24)

(31)

(54)

Net foreign exchange gain on financing

(22)

(52)

(31)

 

(46)

(83)

(85)

 

 

 

5. Dividends

 

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

 £000's

Year

ended

31 December

2015

£000's

Ordinary dividends:

 

 

 

Final dividend 2015 of 1.80p (2014: 1.40p)

671

435

435

Interim dividend 2015 of 0.90p

-

-

329

 

671

435

764

 

An interim dividend of 0.95p per share, an increase of 5.5% on the 2015 interim dividend (2015: 0.9 pence) amounting to £354,237 will be paid on 21 October 2016 to shareholders registered at the close of business on 23 September 2016. The ex-dividend date is 22 September.

 

6. Earnings per share

 

Six months ended 30 June

 

Year ended 31 December

 

2016

Earnings

£000's

2016

EPS

Pence

 2015

Earnings

£000's

2015

EPS

 Pence

2015

 Earnings

 £000's

2015

EPS

Pence

Basic earnings per ordinary share

632

1.7

616

2.0

1,383

4.2

Fully diluted earnings per ordinary share

632

1.6

616

1.8

1,383

3.8

               

 

All earnings arise from continuing operations.

 

The calculation of basic earnings per share is based on the profit for the financial period and the weighted average number of ordinary shares in issue (June 2016: 36,944,583 shares; June 2015: 31,072,550 shares; December 2015: 33,149,761 shares).

 

As Stadium United Wireless Limited is expected to meet the earn-out criteria for contingent consideration to be payable, fully diluted earnings per share reflects both dilutive options granted and shares to be issued as part of contingent consideration resulting in a weighted average number of shares of 40,592,449 (June 2015: 34,856,449 shares; December 2015: 36,826,317 shares).

 

Adjusted earnings per share from continuing operations is stated before amortisation of acquired intangibles and excluding non-recurring items as follows:

 

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Profit attributable to equity holders of the parent

632

616

1,383

Adjustments:

 

 

 

Amortisation of acquired intangibles

449

607

1,026

Interest charge on the fair value of consideration

82

62

134

EMS division reorganisation and severance costs

-

-

156

Technology division reorganisation and severance costs

383

-

178

Asia factory relocation works

-

68

615

Abortive relocation works

-

-

-

Acquisition costs of subsidiaries

-

-

201

Tax effects of above adjustments

(183)

(51)

(395)

Adjusted profit from continuing operations

1,363

1,302

3,298

 

 

Pence

Pence

Pence

Adjusted basic earnings per share before amortisation of acquired intangibles and from continuing operations

3.7

4.2

9.9

Adjusted fully diluted earnings per share before amortisation of acquired intangibles and from continuing operations

3.4

3.8

9.0

 

 

 

 

7. Non-current payables

 

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Long term portion of secured bank borrowings - between one and five years

7,050

7,625

7,350

Finance leases - between one and five years

440

493

455

Deferred consideration - between one and five years

2,232

1,815

2,150

 

9,722

9,933

9,955

 

 

8. Net cash inflow from operating activities

 

Six months

ended

30 June

2016

£000's

Six months

ended

30 June

2015

£000's

Year

ended

31 December

2015

£000's

Profit for the period

632

616

1,383

Income tax expense

77

54

321

Finance expense

340

379

698

Finance income

-

(83)

-

Operating profit

1,049

966

2,402

Share option costs

168

177

364

Depreciation - continuing operations

363

300

627

Amortisation of development costs and acquired intangibles

573

672

1,214

Loss on sale of fixed assets

6

11

58

Effect of exchange rate fluctuations

166

(77)

380

Decrease/(increase) in inventories

180

(959)

183

(Increase)/decrease in trade and other receivables

2,122

(2,641)

(3,239)

Increase/(decrease) in trade and other payables

(2,109)

1,735

1,580

Net cash inflow from trading activities

2,518

184

3,569

Difference between pension charge and cash contributions

(60)

(117)

(323)

Tax paid

(373)

(34)

(378)

Net cash inflow/(outflow) from operating activities

2,085

33

2,868

 

9. Analysis of changes in net debt

 
 
30 June
2016
£000’s
Cash flow
£000’s
Foreign
exchange
£000’s
31 December
2015
£000’s
Cash
 
4,679
(3,972)
162
8,489
Overdrafts
 
2,289
(2,289)
Total cash & cash equivalents
 
4,679
(1,683)
162
6,200
Loans
 
(7,625)
250
(7,875)
Invoice discounting
 
(26)
2,373
(2,399)
Finance leases
 
(596)
78
(66)
(608)
Net (debt)/funds
 
(3,568)
1,018
96
(4,682)

 

  

10. Risk management

 

The main financial risks faced by the Group are credit risk, foreign currency risk, interest rate risk and liquidity risk. The directors regularly review and agree policies for managing these risks. Further details of the risk management policies are set out in Note 1.

 

 

Credit risk

 

The Group has paid particular attention to managing the credit risk inherent in new customers during a period of revenue growth. Awareness is maintained of any changes in customers' credit requirements, payment habits and the conditions in their own market sectors.

 

The Group has not incurred any significant bad debts during the period.

 

Foreign currency risk

 

There has been no significant change during the period in the nature of the Group's exposure to currency risk. The Group's exposure to currency risk arises from transactions which are not in the functional currency of the operating unit and from the retranslation of the operating unit's results into Sterling, being the Group's presentational currency.

 

The Group manages its exposure to currency risk by matching the currency of payments and receipts in order to minimise exposure and buys currency when the liability falls due. The directors do not believe that the Group has significant foreign currency exposure on transactions.

 

The Groups foreign currency risk exposure from recognised assets and liabilities arises primarily from its investment in Stadium Asia Limited denominated in Hong Kong Dollars.

 

There is no significant impact on the income statement from foreign currency movements associated with these assets and liabilities as the effective portion of foreign currency gains and losses arising are recorded through the translation reserve.

 

A net gain of £440,000 (2015: loss £73,000; 2015 full year: gain £471,000) on the translation of the net assets of Stadium Asia, denominated in Hong Kong dollars was recorded through the translation reserve.

 

At 30 June 2016 the Group had borrowings denominated in US dollars of £Nil (2015: £Nil), in Hong Kong Dollars of £61,000 (2015: £104,000) and in Euros of £535,000 (2015: £526,000).

 

Interest rate risk

 

The Group finances its operations through a mixture of equity, retained earnings and bank borrowings. The Group holds cash and borrows in Sterling, US Dollars and Hong Kong Dollars at floating rates of interest. (Fixed rate finance leases are also used, denominated in Hong Kong Dollars and Euros).

 

The exposure to interest rate risk all relates to the floating rates at which the Group borrows and lends. The risk is monitored continually to ensure that the Group remains able to meet its financing commitments from operational cash flows.

 

The Group's financial liabilities are denominated in Sterling, US Dollars, Hong Kong Dollars and Euros and have fixed and floating interest rates. The financial liabilities with floating interest rates comprise:

 

·  loans in Sterling that bear interest at rates based on a floating rate of LIBOR plus 2.0 to 2.3%; and

·  an overdraft availability in Sterling and Hong Kong dollars that bears interest on a floating rate of LIBOR plus 2.0% to 2.3% after offset of Sterling deposits; and

·   invoice securitisation that bears interest on a floating rate of LIBOR plus 1.65%.

 

Liquidity risk

 

The Group's policy of managing liquidity risk by maintaining sufficient headroom in its undrawn overdraft facilities has been applied throughout the period.

 

At the end of the period the Group had overall net available cash of £4,679,000 (H1 2015: £2,795,000).  In addition, it had overdraft facilities under a cash pooling arrangement across all Group companies of £537,000 (H1 2015: £487,000) of which £Nil was being utilised (H1 2015: £Nil), invoice discounting and factoring facilities offered £3,238,000 (H1 2015: £1,128,000) of which £26,000 was being utilised.

 

11. Going concern and liquidity

 

The directors confirm that, after having made the appropriate enquiries, they have a reasonable expectation that the Group and the Company have adequate resources and sufficient liquidity to continue operations for the foreseeable future. Accordingly, the directors have adopted the going concern basis in the preparation of this report.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR SSDFMIFMSEDU