Source - RNS
RNS Number : 0050I
Redhall Group PLC
14 June 2017
 




For immediate release 

                                    14 June 2017

 

 

Redhall Group plc

(''Redhall'' or the ''Group'')

 

Interim Results

Redhall Group plc (AIM: RHL), the high integrity manufacturing and services group, announces its interim results for the six months ended 31 March 2017.

Key highlights:

·     Continued progress in focusing Redhall on high integrity manufacturing and services delivering into complex, secure and hazardous environments

 

·     First major project wins for Hinkley Point C, worth c£8 million, contributing to a significant order book increase to £32 million (December 2016: £27 million) on a like for like basis including confirmed preferred bids and excluding the marine contract

 

·     Revenue of £19.0 million (2016: £21.4 million), in line with management expectations and reflecting completion of work on the marine contract

 

·     Operating profit of £1.2 million before central costs of £1.0 million

 

·     Return to  adjusted operating profit* of £0.2 million (H1 2016: loss of £0.1 million)

 

·     Reduced loss before tax on continuing operations of £0.62 million (H1 2016: loss of £0.75m)

 

·     Proposed placing to raise up to approximately £9.5 million and £3.75 million debt conversion announced today - see separate release

 

*Adjusted operating profit excludes interest, tax, amortisation, IFRS2 charge and exceptional items

 

Martyn Everett, Chairman of Redhall, commented:  "We have a strong order book and we are creating a platform for the Group to further its position as a leading player in its core nuclear defence, decommissioning and new build markets.  We continue to respond to a very high level and value of requests for tender particularly for nuclear new build and decommissioning and infrastructure projects and we continue to focus on converting these opportunities.

"We are delighted to have obtained a number of orders for work relating to Hinkley Point C and we are confident that our capabilities will allow us to win further work on our own account and in conjunction with others."

 

 

 

 

Contact details:

 

Redhall Group plc

Tel: +44 (0) 1924 385 386

Phil Brierley, Chief Executive

Chris Kelly, Group Finance Director

 

 

 

Buchanan

Tel: +44 (0) 20 7466 5000

Mark Court, Sophie Cowles

 

 

 

GCA Altium, NOMAD

 

Phil Adams, Simon Lord

Tel: +44 (0) 845 505 4343

 

 

WH Ireland, Broker

 

Adrian Hadden, Ed Allsopp

Tel: +44 (0) 20 7220 1666

 

 

 

Chairman's Statement

Introduction

The Board of Redhall has announced today that it is seeking to raise up to approximately £9.5 million of new equity by way of a placing of new ordinary shares and, in addition, the conversion into new ordinary shares of £3.75 million of the debt owed by the Company to funds managed by LOIM, all at 10p per share, which is a premium of 11.1% to the closing price on 13 June 2017.  This fundraising and debt conversion, which will be subject amongst other things, to shareholder approval at a General Meeting on 30 June 2017, seeks to provide the working capital and investment funds for the next stage of Redhall's strategy.

The fundraising has been launched in response to the growing momentum of the Group's recovery.  During the first half we experienced a considerable level of tender and bid activity for major projects.  This has resulted in an increase in the order book (on a like for like basis following the completion of the BAE contract) to £32 million from £27 million at the end of December 2016. Recent orders include £8 million of work related to the nuclear new build project at Hinkley Point C. 

I am also pleased to report an adjusted profit for the first half of the year of £0.2 million. This further demonstrates improvement in the performance of the Group, which is in line to achieve market expectations for the full year. 

Trading results

Revenue for the six month period amounted to £19.0 million (2016: £21.4 million).  Adjusted operating profit before interest, tax, amortisation, IFRS2 charge and exceptional items amounted to £0.2 million (2016: loss of £0.1 million).  The adjusted fully diluted loss per share from the continuing businesses amounted to £0.10p (2016: loss of 0.20p).

More detail of the trading performance is provided in the Chief Executive's review.   Our results for the period are now reported in a single segment.  Following completion of work for BAE on the Astute contract, our remaining businesses are all market leaders in the provision of high integrity manufacturing and services delivered into complex and hazardous environments.

Financial position

We continued to invest in the business during the period.  At Booth Industries we commissioned a new press improving control over our supply chain and reducing lead times.  We also invested in improvements to our engineering and design capability to further reduce lead times.

Net debt (excluding finance leases of £0.4m) at the end of the period was £8.9 million (September 2016: £8.2 million).  This reflects the unwind of a favourable working capital position and expenditure on fixed assets during the period.  The Group's bank facilities are being renegotiated alongside the fundraising and debt conversion.  Agreement in principle has been reached with HSBC to increase the Company's facilities with HSBC from £5.525 million to £8.0 million, consisting of a £5.525 million revolving credit facility with a £2.475 million accordion facility at more favourable rates.  The LOIM borrowings of £5.7 million are expected to be reduced to £2.0 million by the debt conversion.

Our defined benefit pension deficit has fallen by over 50% in the period to £1.8 million (September 2016: £3.8 million).  This reflects an improvement in discount rates and changes in mortality data since the last valuation. 

Dividend

The Board has recommended that no interim dividend will be paid in 2017.

People

Our employees are at the core of everything we do.  The continued delivery of our strategic plans is reliant on their continued support, for which the Board is extremely grateful.  We have created a strong springboard for the future with the placing and debt conversion and look forward to working together to create a strong, growing Group with their further commitment.

Prospects

We have a strong order book and we are creating a platform for the Group to further its position as a leading player in its core nuclear defence, decommissioning and new build markets.  We continue to respond to a very high level and value of requests for tender particularly for nuclear new build and decommissioning and infrastructure projects at Booth Industries and Jordan Manufacturing and we continue to focus on converting these opportunities.

We are delighted to have obtained a number of orders for work relating to Hinkley Point C through Jordan Manufacturing, which is based locally in Yate.  We are confident that our capabilities will allow us to win further work on our own account and in conjunction with others.

 

Martyn Everett
Chairman
14 June 2017

 

 

 

 

Chief Executive's Strategic Review

Overview

The strategic focus of the past two years has seen Redhall transform from a labour intensive contracting business into a Group delivering high integrity manufactured products and services into complex, secure and hazardous environments. We have been particularly successful in positioning the Group to benefit from the substantial opportunities that exist in the nuclear market and by the end of this financial year we will be in full production on projects in all three areas of our target nuclear sectors of defence, decommissioning and new build - most significantly being the confirmation of our preferred bid status on an early marine works package at Hinkley Point C valued at c£8 million.

This progress is reflected in a like for like improvement in our order book which now stands at £32 million (£20 million June 2016; £27 million December 2016). This growth comes from customer orders to manufacture goods for the nuclear market. This is particularly pleasing as the growth in order volume is mirrored by an improvement in quality as products for nuclear tend to be highly engineered and typically attract the highest returns.

Behind this order book is a substantial pipeline of projects already bid and we are seeing an increasing number of opportunities in many of our core markets. In previous year reviews we said we were positioning ourselves for the considerable opportunity presented by nuclear new build. It is therefore pleasing to note that Hinkley Point C is now under construction and that we are receiving orders under our confirmed preferred bid status. Opportunities also continue to grow from the increased spend in decommissioning, particularly at Sellafield; the commencement of the Successor boat programme with its associated defence spending; the growing requirement for high integrity doors to combat the security threat to key infrastructure and the ongoing spend in large rail infrastructure for Crossrail.

The changing profile of our order book and how it is delivered also accounts for the anticipated second half weighting of this year's revenue and profit. Last year the order growth was driven by the award of high integrity doors in our Booth Industries ("Booth") subsidiary. These products are highly engineered and can remain in design for many months. This is a high value added stage but results in low revenues and returns as it is entirely people based. Once the project moves into manufacturing and we buy in materials and sub-contract items the revenues and returns increase significantly. This will occur in Booth in the second half. More recently the order book growth has been driven by Jordan Manufacturing Ltd ("Jordan"), particularly on Hinkley Point C projects. These schemes have high value specialist materials used in manufacturing but have a lower engineering content. As a result they move into production on a shorter lead time and will commence fabrication in the second half, simultaneously with the high levels of manufacturing in Booth. We expect that this will result in sustained higher revenues and margins for the Group generated by the manufacturing businesses but with higher capital needs to sustain this growth. We are therefore delighted to announce today that we are seeking to raise, subject to shareholders approval, up to £9.5 million through a placing of new shares and £3.75 million through a debt for equity conversion. This transaction will give the Group sufficient working capital to deliver our growing order book and pipeline. It will allow us to invest for future growth, increased margins, improved customer perception and give us an ability to further position the Group to realise opportunities in our rapidly increasing core markets.

 

In repositioning the business we now provide manufactured products and services into the largest and most complex infrastructure projects in the UK. Our ultimate clients are, quite rightly, demanding in their requirements for quality and delivery. We recognise the importance of being a customer-focused business and have substantially increased our investment into training and development of our people, investment into product development and investment in modernising equipment. We expect that this investment will increase further as the Group develops and grows.

The Group made an adjusted operating profit for the first half of £0.2m (H1 2016: £0.1 million loss) on revenue of £19.0 million. Before deducting Group and central services costs, the adjusted profit amounted to £1.2 million. It is important to note the contribution from the businesses as it underlines the importance of growth to gain efficiencies in our central and Group costs. The result is in line with our expectations and represents a step forward on H1 2016 with the businesses contributing an operating profit before central costs of 6.5% (H1 2016: 5.2%). We would expect this to be substantially higher in the second half of the year and into 2018. During our restructuring stage we had many exceptional costs impacting our results and consuming cash. It is therefore worthy of note that the first half accounts have no exceptional costs.

Health and Safety

The health and safety of our employees and those who may be affected by our business remains our highest priority. All of our five subsidiaries have accredited management systems to control health and safety risks to OHSAS 18001 and environmental management systems certified to BS EN ISO 14001.

 

During the year, many of our subsidiaries once again applied for health and safety awards from The Royal Society for the Prevention of Accidents (RoSPA), which recognises high or very high levels of performance. All of our businesses that applied obtained a minimum of the Gold Award.

 

Operational review

Booth Industries Ltd

Booth has moved increasingly into its high integrity door manufacturing in the last two years. This has been part planned as it is typically the most highly engineered product that we manufacture but it has also been in response to a rapidly declining oil and gas market into which Booth supply blast and fire products. The revenue from oil and gas has been more than replaced by the nuclear defence and decommissioning markets and large infrastructure projects, particularly Crossrail. The order book in Booth has grown significantly and the feature of the first half has been engineering these orders ready to pass through to manufacturing on the shop floor. This occurs in the second half resulting in much higher revenues and returns. Engineering works continue on incoming orders and we expect that, moving forward into 2018 there will be a regular release of work into manufacturing.

Jordan Manufacturing

Jordan has repositioned its market in the past two years from general industrial and architectural metalwork to be focused on high integrity bespoke manufactured products for complex environments. Over 80% of the work done in this subsidiary now serves the nuclear market. Due to the gestation period of many nuclear projects it can take time to achieve this transformation but as the revenue has been steadily increasing so has the proportion of nuclear orders. Until recently the vast majority of growth came from nuclear decommissioning projects on Sellafield and Dounreay. However we are now benefiting from substantial packages on Hinkley Point C relating to the early marine works. As these projects are largely "build to print", with low engineering input but a high specialist material content, they will positively impact our revenues and returns in the second half.

R. Blackett Charlton (RBC)

As previously reported, RBC principally supplied large bore pipe to the offshore oil and gas market. This market collapsed in 2015 and we took rapid action to mothball this part of the business. The remaining small manufacturing facility operates as Chieftain Fabrications and it supports the manufacturing activities of the Group. It currently procures sufficient contracts to contribute to the overheads of the Group.

Redhall Jex

Redhall Jex provides design, manufacture, installation, relocation and refurbishment of process equipment principally into the food sectors. We anticipated that the first half of the current year would continue at the levels experienced in the second half of the 2016 year with lower demand from our principal clients. This has proved to be the case. We also anticipated however, that volumes from our major clients of Kellogg's, Mondelez, Mars and Nestle would improve as their pipeline projects move to order placement.  This has been borne out by the award of a number of recent contracts valued at £2.8 million. These and other near term pipeline opportunities should underpin trading expectations for the year.

Redhall Networks

Redhall Networks provides cellular rigging installations to the mobile telecommunications network across England and Scotland. During the first half the business continued to benefit from high levels of infrastructure work. Mobile communications is an ever increasing part of our national infrastructure and the maintenance, upgrading and consolidation of the network by the operators provides us with confidence that the volumes and returns experienced in Redhall Networks will continue.  

Outlook

When we outlined our strategic plan nearly three years ago we detailed three main stages. The first was to restructure the Group, to reduce debt, reduce risk and to focus on our high integrity, higher margin activities. Stage two concentrated on the investment, improvement and the positioning of the retained businesses ready for what we believed would be considerable growth in our core markets. We are now moving into stage three, which is one of growth in our high integrity manufacturing businesses.

We have already demonstrated our ability to secure good quality orders and believe that we have created substantial opportunity to continue to grow these. We have now received orders and confirmed preferred bid status on significant projects on Hinkley Point C and both orders and tenders are increasing in decommissioning. Other core markets of defence, mobile communications and food all continue to have strong underlying order books and pipeline.

In the second half of the year and into 2018 the secured projects in our manufacturing businesses move through engineering and into manufacturing, which will significantly increase the revenue and margin. This shift from stage two to stage three has culminated in the announcement today that we are seeking to raise, subject to shareholders' approval, up to £9.5 million through a placing of new shares and £3.75 million through a debt for equity conversion.

Our trading remains in line with full year market expectations and we are confident that the investment and improvements already made in the business, coupled with the increasing order book and substantial improvement in capital base, will deliver profitable growth and return long term benefits for our stakeholders. 

 

Phil Brierley
Chief Executive
14 June 2017

 

 

 

Condensed Consolidated Interim Income Statement

 

 

 

 

Six months

Six months

 Year to

 

 

 

Note

to 31 March

to 31 March

30 September

 

 

 

2017

2016

2016

 

 

 

 

 

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

 

Revenue

3

18,964

21,352

43,823

 

 

 

Cost of sales

 

(14,546)

(16,897)

(33,903)

 

 

 

Gross profit

 

4,418

4,455

9,920

 

 

 

Administrative expenses

 

(4,598)

(4,809)

(10,157)

 

 

 

Loss before interest and tax

3

(180)

(354)

(237)

 

 

 

Continuing businesses

 

1,228

1,105

3,295

 

 

 

Central costs

 

(1,045)

(1,196)

(2,439)

 

 

 

Adjusted operating profit/(loss)*

 

183

(91)

856

 

 

 

Exceptional items

 

-

  -

(397)

 

 

 

Amortisation of acquired intangible assets

 

(153)

(162)

(323)

 

 

 

IFRS 2 charge

 

(210)

(101)

(373)

 

 

 

Operating loss

 

(180)

(354)

(237)

 

 

 

Net financial expense

 

(439)

(398)

(857)

 

 

 

Loss before tax on continuing operations

 

(619)

(752)

(1,094)

 

 

 

 

 

 

 

 

 

 

 

Tax (charge)/credit on loss on ordinary activities

5

(93)

157

407

 

 

 

Loss on continuing operations

 

(712)

(595)

(687)

 

 

 

Loss on discontinued operations net of tax

10

(72)

(159)

(983)

 

 

 

Loss attributable to equity holders of the

 

(784)

(754)

(1,670)

 

 

 

Parent Company

 

 

 

 

Loss per share

6

 

 

 

 

 

 

Basic

 

(0.39)p

(0.38)p

(0.83)p

 

Diluted

 

(0.39)p

(0.38)p

(0.83)p

 

 

 

 

 

 

 

 

 

 

*Before exceptional items, amortisation of intangible assets acquired with business combinations and IFRS 2 charge.

 

 

 

Condensed Consolidated Interim Statement of Comprehensive Income

 

 

 

Six months

Six months

Year to

 

 

to 31 March

to 31 March

30 September

Note

2017

2016

2016

 

 

£000

£000

£000

Loss for the period

 

(784)

(754)

(1,670)

Other comprehensive income:

 

 

 

 

Items that will not be reclassified to profit or loss:

 

 

 

 

Remeasurement of defined benefit liability

 

1,982

-

(1,963)

Tax on actuarial adjustment

 

(332)

-

318

Revaluation of gains on fixed assets

 

-

-

46

Other comprehensive income for the

 

1,650

-

(1,599)

period net of tax

 

Total comprehensive income attributable to

 

866

(754)

(3,269)

equity holders of the Parent Company

 

 

 

 

 

 

Condensed Consolidated Interim Balance Sheet

 

 

 

As at

As at

As at

 

 

 

31 March

31 March

30 September

 

 

Note

2017

2016

2016

 

 

£000

£000

£000

 

Assets

 

 

 

 

 

Non-current assets

 

3,000

 

 

 

Property, plant and equipment

 

2,601

2,648

 

Intangible assets

 

2,704

2,770

2,732

 

Purchased goodwill

 

18,305

18,305

18,305

 

Deferred tax asset

 

607

311

1,032

 

Current assets

 

24,616

23,987

24,717

 

 

582

 

 

 

Inventories

 

578

636

 

Trade and other receivables (of which £322,000 are

 

 

 

 

 

due after one year (31 March 2016: £240,000;

 

12,371

 

 

 

30 September 2016: £78,000))

 

13,215

11,452

 

Cash and cash equivalents

8

350

1,436

1,021

 

 

 

13,303

15,229

13,109

 

Liabilities

 

 

 

 

 

Current liabilities

 

(9,930)

 

 

 

Trade and other payables

 

(9,687)

(9,217)

 

Finance leases

 

(92)

-

-

 

Current tax payable

 

(19)

(19)

(19)

 

 

 

(10,041)

(9,706)

(9,236)

 

Non-current liabilities

 

(9,269)

 

 

 

Borrowings

8

         (9,745)         

(9,269)

 

Finance leases

 

(293)

-

-

-

Retirement benefit obligations

        9

(1,815)

(1,836)

(3,796)

 

 

 

(11,377)

(11,581)

(13,065)

 

Net assets

 

16,501

17,929

15,525

 

Equity attributable to owners of

 

 

 

 

 

the Parent Company

 

12,284

 

 

 

Share capital

 

12,284

12,284

 

Share premium account

 

28,326

28,326

28,326

 

Merger reserve

 

12,679

12,679

12,679

 

Revaluation reserve

 

102

102

102

 

Other reserve

 

1,499

1,278

1,389

 

Retained earnings

 

(38,389)

(36,740)

(39,255)

 

Total equity

 

16,501

17,929

15,525

 

 

 

 

 

Condensed Consolidated Interim Statement of Changes in Equity

 

 

Share

Share

Merger

Revaluation

Other

Retained

Total

 

 

capital

premium

reserve

reserve

reserve

earnings

 

 

 

£000

£000

£000

£000

£000

£000

£000

 

At 1 October 2015

12,284

28,326

12,679

102

1,177

(35,986)

18,582

 

Employee share-based

 

-

-

-

-

212

-

212

 

compensation

 

 

Transactions with owners

-

-

-

-

212

-

212

 

Loss for the year

 

-

-

-

-

-

(1,670)

(1,670)

 

Other comprehensive income

-

-

-

-

(1,599)

(1,599)

 

for the year

 

-

 

Total comprehensive income

-

-

-

-

-

(3,269)

(3,269)

 

for the year

 

 

At 30 September 2016

12,284

28,326

12,679

102

1,389

(39,255)

15,525

 

At 1 October 2016

 

 

 

 

 

 

 

 

 

12,284

28,326

12,679

102

1,389

(39,255)

15,525

 

Employee share-based

 

-

-

-

-

110

-

110

 

compensation

 

 

Transactions with owners

-

-

-

-

110

-

110

 

Loss for the period

 

-

-

-

-

-

(784)

(784)

 

Total comprehensive

 

-

-

-

-

-

1,650

1,650

 

income for the period

 

 

At 31 March 2017

12,284

28,326

12,679

102

1,499

(38,389)

16,501

 

 

 

 

 

Condensed Consolidated Interim Cash Flow Statement

 

 

 

Six months

Six months

Year to

 

 

Note

to 31 March

to 31 March

30 September

 

 

2017

2016

2016

 

 

 

£000

£000

£000

 

Cash generated from/(absorbed by) operations

7

87

(2,419)

(1,575)

Interest paid

 

(379)

(412)

(792)

 

Net cash absorbed by operating activities

 

(292)

(2,831)

(2,367)

 

Cash flows from investing activities

 

(104)

 

 

Purchase of property, plant and equipment

 

(242)

(478)

 

Purchase of intangible assets

 

(206)

(188)

(355)

 

Proceeds from sale of plant and equipment

 

-

440

440

 

Net cash (used in)/received from investing activities

 

(310)

10

(393)

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from borrowings

 

-

9,745

9,744

 

Repayment of facility

 

-

(5,745)

(5,745)

 

Repayment of long term borrowing

 

-

(430)

(905)

 

Repayment of finance leases

 

(69)

-

-

 

Net cash generated by financing activities

(69)

3,570

3,094

 

Net (decrease)/increase in cash and cash equivalents

(671)

749

334

 

Cash and cash equivalents at beginning of period

1,021

687

687

 

Cash and cash equivalents at end of period

8

350

1,436

1,021

 


 

 

 

Notes to the condensed Consolidated Interim Financial Statements

 

1. Basis of preparation

These condensed consolidated interim financial statements ("interim financial statements") are for the six months ended 31 March 2017 and do not constitute statutory accounts under sections 434 and 435 of the Companies Act 2006. They do not include all of the information required for full annual financial statements. The comparative figures for the financial year ended 30 September 2016 are not the Group's consolidated statutory accounts for that financial year. Those accounts have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. These interim financial statements should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2016.

These interim financial statements have been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU but not in compliance with IAS34 as adopted by the EU, and under the historical cost convention, except for the revaluation of certain non-current assets and to include fair values for share-based payments and the initial recognition of financial instruments.

These interim financial statements have been prepared in accordance with the accounting policies adopted in the latest consolidated financial statements for the year to 30 September 2016. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.

As noted in note 8, the Group entered into new banking arrangements in December 2015. The Group's forecasts and projections, taking account of expected trading performance, show that the Group should be able to operate within the level of the revised facilities. After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly they have continued to adopt the going concern basis in the preparation of these interim financial statements.

These interim financial statements have been reviewed, but not audited, by the Group's auditors and their report is set out on after note 12.

 

2. Principal operating risks and uncertainties

The principal operating risks and uncertainties faced by the Group were reported in the latest consolidated financial statements of the Group for the year to 30 September 2016 and remain unchanged.

 

3. Segment analysis

The Board of Directors, which is the Chief Operating Decision Maker as described by IFRS 8 has concluded, given the cessation of work by Redhall Marine, that the Group now comprises one segment and this is how the CODM reviews performance and allocates resources. The remaining businesses are all market leaders in the provision of high integrity manufacturing and services delivered into complex and hazardous environments and have similar characteristics. The segment performance is measured in accordance with IFRS and segment result is adjusted operating profit/loss on the face of the income statement.

 

Site Services

During the second half of the year ended 30 September 2015 the activities of Site Services were discontinued. The Group sold its Engineering business on 13 May 2015 and on 14 May 2015 announced the closure of its site based Nuclear contracting business. The results of the discontinued activities are shown in note 10.

 

 

3. Segment analysis (continued)

 

Geographical segments

The following table shows the distribution of the Group's continuing consolidated revenue by geographical market, regardless of the origin of the goods or services.

 

 

Six months

Six months

Year to

 

to 31 March

to 31 March

30 September

 

2017

2016

2016

 

£000

£000

£000

United Kingdom

16,782

20,590

41,833

Other European Union countries

904

332

9,536

Other overseas locations

1,278

430

1,037

 

18,964

21,352

43,823

 

 

 

 

 

 

 

 

 

 

4. Financial income and expenses

 

 

Six months

Six months

Year to

 

 

to 31 March

to 31 March

30 September

 

 

2017

2016

2016

 

 

£000

£000

£000

 

Financial expenses

(324)

 

 

 

Interest on bank loans and overdrafts

(323)

(703)

 

Interest on finance leases

               (10)

-

-

 

Net finance expense on pension scheme*

(105)

(75)

(154)

 

 

(439)

(398)

(857)

 

 

 

 

 

 

 

 

 

 

 

 

*Includes £60,000 of pension administration expenses paid for by the Group (31 March 2016: £44,000; 30 September 2016: £85,000).

 

 

 

5. Taxation

The charge for taxation reflects an estimated current tax charge on the projected results for the year and estimated movements in the deferred tax balance.

 

6. Earnings per share

Basic earnings/(loss) per share

The calculation of basic loss per share of 0.39p (31 March 2016: loss per share of 0.38p; 30 September 2016: loss per share of 0.83p) is based on 200,250,684 shares (31 March 2016: 200,250,684; 30 September 2016: 200,250,684), being the weighted average number of shares in issue throughout the period and the loss of £784,000 (31 March 2016: loss of £754,000; 30 September 2016: loss of £1,670,000).

Diluted loss per share

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted loss per share for the period ended 31 March 2017, 31 March 2016 and for the year ended 30 September 2016 are identical to those used for the basic loss per share.

This is because the exercise of share options would have the effect of reducing the loss per share and is, therefore, not a dilution under the terms of IAS 33.

Adjusted earnings per share

The Directors believe that helpful additional earnings per share calculations are earnings per share on adjusted bases. The basic and adjusted weighted average numbers of shares and the adjusted earnings have been calculated as follows:

 

 

 

 

Six months

Six months

Year to

 

 

to 31 March

to 31 March

30 September

 

 

2017

2016

2016

 

 

Number

Number

Number

 

Basic weighted average number of shares

200,050,684

200,050,684

200,050,684

 

Dilutive potential ordinary shares arising

-

 

 

 

from share options

-

-

 

Adjusted weighted average number of shares

200,050,684

200,050,684

200,050,684

 

 

£000

£000

£000

 

Earnings:

(691)

 

 

 

Loss on ordinary activities before tax

(911)

(2,077)

 

Exceptional items

72

159

1,380

 

Amortisation of acquired intangible assets

153

162

323

 

IFRS 2 charge

210

101

373

 

Adjusted loss before tax

(256)

(489)

(1)

 

Tax at 19.5% (31 March 2016: 20.0%;

50

 

 

 

30 September 2016: 20.0%)

98

-

 

Adjusted profit after tax

(206)

(391)

(1)

 

Adjusted fully taxed basic earnings per share

(0.10)p

(0.20)p

0.00p

 

Adjusted fully taxed diluted earnings per share

(0.10)p

(0.20)p

0.00p

 


 

 

 

 

6. Earnings per share (continued)

 

Continuing operations

Six months

Six months

Year to

 

 

to 31 March

to 31 March

30 September

 

 

2017

2016

2016

 

Loss before tax

(619)

(752)

(1,094)

 

Exceptional items

-

-

397

 

Amortisation of acquired intangible assets

153

162

323

 

IFRS 2 charge

210

101

373

 

Adjusted loss before tax

(256)

(489)

(1)

 

Tax at 19.5% (31 March 2016: 20.0%;

50

 

 

 

30 September 2016: 20.0%)

98

-

 

Adjusted loss after tax

(206)

(489)

(1)

 

Adjusted fully taxed diluted loss per share

(0.10)p

(0.20)p

0.00p

 

Discontinued operations

 

 

 

 

 

£000

£000

£000

 

Loss before tax

(72)

(159)

(983)

 

Exceptional items

72

159

983

 

Amortisation of acquired intangible assets

-

-

-

 

Adjusted loss before tax

-

-

-

 

Tax at 19.5% (31 March 2016: 20.0%;

-

 

 

 

30 September 2016: 20.0%)

-

-

 

Adjusted loss after tax

-

-

-

 

Adjusted fully taxed diluted loss per share

0.00p

0.00p

0.00p

 

 

 

 

7. Cash flow from operating activities

 

 

Six months

Six months

Year to

 

 

to 31 March

to 31 March

30 September

 

 

2017

2016

2016

 

 

£000

£000

£000

 

Loss after taxation

(784)

(754)

(1,670)

 

Adjustments for:

206

 

 

 

Depreciation

142

331

 

Amortisation of intangible assets

233

210

415

 

Difference between pension charge and

1

 

 

 

cash contributions

(124)

(196)

 

Share based payments charge

110

101

212

 

Financial expenses

439

398

857

 

Taxation charge/(credit) recognised in income statement

93

(157)

(514)

 

(Increase)/decrease in trade and other receivables

(918)

1,753

3,516

 

Decrease/(increase) in inventories

54

(61)

(119)

 

Increase/(decrease) in trade and other payables

653

(3,927)

(4,407)

 

Cash generated from/(absorbed by) operations

87

(2,419)

(1,575)

 


 

8. Reconciliation of net debt

A reconciliation of the cash and cash equivalents reported in the condensed consolidated interim cash flow statement with the total borrowings reported in the condensed consolidated interim balance sheet as at 31 March 2017 is set out as follows:

 

 

At start

Cash flow

Non-cash

At end

 

 

of period

movement

of period

 

 

£000

£000

£000

£000

 

Cash at bank and in hand

1,021

(671)

-

350

 

Bank overdraft

-

-

-

-

 

Bank loan due within one year

-

-

-

-

 

Finance leases

-

-

(92)

(92)

 

 

 

 

 

 

 

Net cash and cash equivalents

 

 

 

 

 

(Borrowings due within one year)

-

-

-

-

 

Bank loan due after more than one year

(3,525)

-

-

(3,525)

 

Other loan due after more than one year

(5,744)

-

-

(5,744)

 

Finance leases

-

-

(293)

(293)

 

 

 

 

 

 

 

 

(8,248)

(671)

(385)

(9,304)

 

 

 

 

 

 

 

 

The Group entered into new banking arrangements in December 2015. These facilities expire in December 2018. They comprise total facilities of £11,269,000, being an overdraft of £2,000,000 and a revolving credit facility of £3,525,000 with HSBC and a term loan of £5,744,000 with funds managed by LOIM.

 

9. Retirement benefit obligations

The liability for retirement benefit obligations relates to the Booth Industries Group PLC Staff Pensions and Life Assurance Scheme.

The result of the most recent formal actuarial valuation which was carried out as at 6 April 2015 has been updated to 31 March 2017 by an independent qualified actuary. The reduction in the deficit arises principally from changes in the discount rate and mortality assumptions (CMI 2016).

 

10. Discontinued operations

Income and expenditure incurred on discontinued operations comprises the ongoing exit from Nuclear Site Services business.


10. Discontinued operations (continued)

 

 

Six months

Six months

Year to

 

 

to 31 March

to 31 March

30 September

 

 

2017

2016

2016

 

 

£000

£000

£000

 

Revenue

273

234

487

 

Cost of sales

(261)

(222)

(487)

 

Gross profit

12

12

-

 

Administrative expenses

(12)

(12)

-

 

Adjusted operating loss before exceptionals

-

-

-

 

Exceptional items

(72)

(159)

(983)

 

Operating loss and loss before taxation

(72)

(159)

(983)

 

Taxation credit

-

-

-

 

Loss after taxation from discontinued operations

(72)

(159)

(983)

 

 

During the period, discontinued operations contributed a net cash inflow of £83,000 (31 March 2016: £200,000 outflow; 30 September 2016: £110,000 inflow) to the Group's operating cash flows and there were no cash flows from investing activities or from financing activities. 


 

11. Dividends on equity shares

There were no dividends paid during the six month period to 31 March 2017 or the year ended 30 September 2016.

The Directors do not propose the payment of an interim dividend for the six months ended 31 March 2017.

 

12. Distribution of interim report

Copies of this interim report are available from the Company Secretary, Redhall Group plc, Unit 3, Calder Close, Wakefield, WF4 3BA and www.redhallgroup.co.uk.


Independent Review report to Redhall Group PLC

 

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 March 2017 which comprises the condensed consolidated interim income statement, the condensed consolidated interim statement of comprehensive income, the condensed consolidated interim statement of changes in equity, the condensed consolidated interim balance sheet, the condensed consolidated interim cash flow statement and the related explanatory notes.

We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 31 March 2017 is not prepared, in all material respects, in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU and the AIM Rules.

 

Johnathan Pass for and on behalf of

KPMG LLP

Chartered Accountants

1 Sovereign Square, Sovereign Street, Leeds

14 June 2017


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