Chamberlin & Hill Regulatory News (CMH)

AIM:CMH 

CHAMBERLIN plc

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

FINAL RESULTS

for the year ended 31 March 2014

KEY POINTS

· Significant improvement in performance in H2 - reflecting new management team's business turnaround initiatives

· Revenues down 8.6% to £38.6m (2013: £42.3m)

· Underlying loss before tax* of £0.8m (2013: profit of £1.3m). Statutory loss before tax of £2.1m (2013: profit of £0.8m)

· Exceptional costs of £1.0m (2013: £0.2m) - mainly reflects turnaround measures

· Underlying diluted loss per share* of 7.6p (2013: earnings per share of 13.4p)

Statutory diluted loss per share of 20.2p (2013: earnings per share of 9.0p)

· Cash outflow from operations of £1.5m (2013: cash generation of £2.3m)

· Net debt at 31 March 2014 of £3.6m (2013: £1.0m) - with new debt facility of £7.3m

· Board expects Group to return to profitability in 2015

* All underlying figures are stated before ineffective hedge costs, exceptional items, administration costs of the pension scheme and net financing costs on pension obligations, share based payment costs and associated tax impact of these items.

Chairman, Keith Butler-Wheelhouse, commented,

"I am pleased to report a significant improvement in Chamberlin's performance which has led to a reduction in the level of losses in the second half.

The improvement principally reflects actions taken by the new management team to stem losses and address the reduction in revenues within the foundry operations. While foundry revenues are down by 14% year-on-year, they stabilised in the second half and were only 3% down on the first half.

We start the new financial year in a significantly better position than the last and while there are still challenges, we look forward to the Group returning to sustained profitable growth ahead of our original plans."

Enquiries

Chairman's Statement

Introduction

I am pleased to report a significant improvement in Chamberlin's performance which has led to a reduction in the level of losses in the second half.

The improvement principally reflects actions taken by the new management team to stem losses and address the reduction in revenues within the foundry operations. While foundry revenues are down by 14% year-on-year, they have stabilised with second half revenues only 3% down on the first half. As we previously reported, the light castings operations at Walsall showed most resilience with revenues down 3.5% while the medium and heavy castings business experienced reduced demand from key markets, including construction, quarrying and mineral processing, and power generation. By contrast the Group's engineering businesses, which accounted for 25% of Group sales, delivered revenue growth of 12% and a significant increase in operating profits.

Results

Revenues for the year ended 31 March 2014 were down 8.6% to £38.6m (2013: £42.3m). As a result, the Group generated an underlying loss before tax of £0.8m (2013: profit of £1.3m).

The diluted underlying loss per share was 7.6p with the second half loss at 0.8p versus the first half loss of 6.8p (2013: earnings per share of 13.4p).

On a statutory basis, the loss before tax was £2.1m (2013: profit of £0.8m), and diluted statutory loss per share was 20.2p (2013: earnings per share of 9.0p).

Reflecting the poor operational performance, Chamberlin incurred an operating cash outflow of £1.5m (2013: inflow of £2.3m). The Group's overdraft and net borrowings at 31 March 2014 increased to £3.6m (2013: £1.0m). The Group's borrowings were previously financed by a £5.0m overdraft facility. However, during the year, we agreed new asset backed debt facilities totalling £7.3m. This comprises a £6.0m invoice discounting facility, a £0.8m loan, and a £0.5m overdraft.

Dividend

At the half year, we reported that the Board had decided to suspend the payment of dividends until the Group's trading performance justified the restoration of payments and we are therefore not recommending the payment of a final dividend (2013: total of 3.25p).

The Board

In September 2013, we were delighted to welcome Kevin Nolan and David Roberts to the Board as Chief Executive and Finance Director respectively.

Kevin Nolan has 30 years' senior level experience in the engineering sector and joins Chamberlin from global materials engineering group, Wall Colmonoy Ltd, where he was Managing Director. He previously worked for Doncasters Group Ltd, the international engineering group which manufactures precision components and assemblies where he successfully led the expansion of a number of the group's business units and latterly was appointed Divisional Managing Director of Doncasters' largest division, Doncasters Turbine Airfoils and Structural Castings Division.

David Roberts has substantial experience in senior financial roles within the manufacturing and engineering sectors. He was previously at Titanium Metals Corporation, a global producer of titanium melted and mill products, where he was European Finance Director. Before this, he worked for Britax International plc as Divisional Finance Director of Rear Vision Systems, a supplier of original equipment exterior mirrors for passenger cars and light trucks to automotive manufacturers worldwide.

Staff

On behalf of the Board, I would like to thank all our staff for their tremendous efforts over a very challenging year. Their hard work will help to underpin Chamberlin's continuing turnaround.

Strategy & Outlook

At the half year, we reported that the new management team was focused on evaluating the necessary actions to return the Leicester and Scunthorpe foundry operations to profitability and at the same time, reviewing both the cost base and the Group's growth plans.

The significant improvement in the Group's second half performance is encouraging and reflects some of the benefits of the actions already taken. We believe that there is further scope to reduce costs and improve productivity, which remains a key focus. The team is also working on business development and on improving processes. Management efforts remains focused on increasing sales in the existing businesses to improve capacity utilisation.

We start the new financial year in a significantly better position than the last and while there are still challenges, we look forward to the Group returning to sustained profitable growth ahead of our original plans.

Keith Butler-Wheelhouse

Chairman

20 May 2014

Chief Executive's Review

The financial year to 31 March 2014 saw mixed trading conditions. Group sales are down 8.6% compared to 2013, with sales from Foundry activities down 14% and offsetting good growth in the Engineering businesses of 12%. The slowdown in the Foundry Division was especially apparent in the power generation, quarrying and mineral processing sectors, but there was also a reduction in order levels in turbocharger casings and housings. Although underlying demand remains subdued our focus during the second half of the financial year under review was to significantly reduce cost and improve productivity. At the same time we have implemented a more strategic approach to business development and the identification of new opportunities.

While it has been a difficult year, good progress has been made and we are encouraged by the improvement in performance in the second half of the year. We believe that Chamberlin's prospects for the medium term remain attractive.

Foundries

Foundry revenues show a 14% reduction year-on-year to £29.1m (2013: £33.7m), with revenues at the Leicester and Scunthorpe foundries especially impacted by lower demand while the Walsall foundry showed only a 3.5% year-on-year reduction. Encouragingly foundry revenues in the second half have stabilised, with at 3% reduction between the second and first half. The total operating loss was £0.2m (2013: profit of £2.2m) but there was a significant improvement in the second half performance with a marginal operating profit of £0.04m against a loss of £0.28m in the first half. During the second half we brought the operations of the three foundries under a single management structure to create a Foundry Division. This has eliminated duplicate roles and reduced costs.

Our foundry at Walsall specialises in producing small castings which have complex internal geometry, in mid-to-high volumes. It uses multiple grades of grey cast iron and the castings are typically below 3kg in weight. Its expertise in the development and production of castings with complex internal passages is well established and the complex geometry is achieved through the use of innovative core assembly techniques. A major market for the Walsall foundry is automotive turbochargers, where modern designs require careful alignment of cooling and lubrication passages to meet the increased performance demanded by modern engines. Turbochargers accounted for 35.0% of the Foundry Division sales (2013: 31.3%). Legislation to reduce CO2 emissions is promoting the introduction of smaller, turbocharged petrol engines and this technology shift is continuing.

During 2013/14 the Walsall foundry commissioned a chemical cleaning plant, enabling castings to be despatched clear of any sand or potential blockages. It also alleviates stresses that could be induced into the castings from alternative cleaning methods. This additional process has reduced lead time and improved quality.

Our foundry in Leicester produces mid-size castings typically around 20kg, with moderately complex internal shapes although typically with demanding metallurgy requirements around temperature, strength and wear resistance. A major market for the Leicester foundry is the construction equipment industry, and demand from this sector weakened significantly in the financial year. In addition, as previously reported, the Leicester foundry experienced severe operational problems during the year which increased scrap rates and created inefficiencies due to machine downtime. We took remedial action, which has rectified the issues. However the additional one-off cost incurred during the financial year was £0.5m. While demand remains subdued at Leicester, work is underway to broaden the customer base.

Our foundry in Scunthorpe specialises in the production of heavy castings weighting up to 6,000kg which have complex geometry and challenging metallurgy. Applications typically require high strength or high temperature performance and include castings for large process compressors, industrial gas turbines and mining, quarrying and construction equipment. The foundry also takes responsibility for machining the castings, via a range of sub-contractors, and so a large proportion of its output is supplied as a finished part. Demand from its key markets during the financial year remained subdued and we took action to reduce the foundry's cost base to ensure a lower breakeven point. This has created a stronger platform which will help to ensure increased margin when volumes return. We are currently working closely with customer design engineers on high impact resistance irons to develop existing grades to a better performance level.

All foundries in the Group benefit from advanced thermal analysis testing equipment which allows a greater level of understanding and control of the base irons before the metal is committed to pouring into moulds. By associating this with the current casting simulation software we are able to advise on all aspects of production from the initial design stages.

Engineering

Revenues from the engineering operations rose by 12% year-on-year to £9.5m (2013: £8.5m) and operating profits rose 76% to £0.7m (£2013: £0.4m). This Division now accounts for approximately 25% of Group revenues.

Exidor

Exidor is the UK market leader in panic and emergency exit door hardware, and in 2011 it expanded into the market for door closers through the acquisition of Jebron, thereby broadening its offering to its existing panic hardware customers. Exidor has continued to consolidate its UK market leading position in panic hardware and to improve its share of the door closer market, and to service the emerging need for physical security to protect high value retail infrastructure and critical national infrastructure. Exidor has been targeting increased export sales and I am pleased to report significant success, driven by a more strategic approach to new export market selection and development. We expect to see continuing growth in exports over the current year and beyond. Exidor operates in a highly regulated market as its products are for life-critical applications and its customers place great value upon the assurance of genuinely British designed, manufactured and certified product.

Petrel

Petrel Limited manufactures lighting and control equipment for use in hazardous areas. The company was established over 30 years ago and provides high quality products, designed for use in the rigorous and demanding environments classified as hazardous areas. It has established a reputation for high quality design, development and production and supplies customers in the UK, European and International markets.

To complement their existing hazardous area lighting portfolio, Petrel Limited recently entered the LED market and now provides its customers with solutions that carry the additional benefits of longer life, lower maintenance and reduced energy consumption. Being solid state components LEDs are also less prone to damage and external shock making them ideal for use in harsh environments. This technology continues to develop at a considerable pace and the Petrel LED offer utilises the very latest technology to ensure that customers can achieve the optimum benefits in terms of light output and reduced maintenance.

The very latest product launched is a portable light fitting. The PLX range is designed for use in a wide variety of Zone 1/21 hazardous area applications. Manufactured solely in the UK, it will provide users with a robust, reliable lighting solution whilst remaining light enough to be carried around on site with ease. Available in both fluorescent and LED version, this product utilises the very latest in lighting technology to deliver high levels of lighting in a truly portable fitting. During 2014 1.7% of sales (2013: 0.0%) were from portable lighting and LED. Further growth opportunities are expected to come from both product offerings.

Outlook

The significant improvement in the underlying loss position of the Group in the second half of the year is very encouraging and we believe that Chamberlin should return to profitability during the new financial year. This will largely reflect the stabilisation in revenues and the realigned cost base. We believe that there is continuing scope to improve efficiencies and this remains a strong focus in the new financial year. At the same time, we are concentrating on driving new opportunities across the Foundry Division. Given the gestation period, we would expect to see the material results of these efforts to become more apparent in the financial year ending 31 March 2016. We expect to see continuing good progress within the two engineering operations.

I remain very encouraged by prospects for enhanced performance.

Kevin Nolan

Chief Executive

20 May 2014

Finance Review

Overview

Sales decreased by 8.6% during the year to £38.6m (2013: £42.2m) and gross profit margin decreased significantly from 19.2% in 2013 to 15.9% in 2014. During 2014, the Leicester foundry experienced severe operational problems which increased scrap rates and created inefficiencies due to machine downtime. Remediation action has been completed and the additional cost incurred during 2014 was £0.5m (1.3% of sales). The balance of the gross margin decrease (2.0% of sales, or £0.8m) is attributable to the negative operational gearing impact of lower revenue.

Underlying loss before tax is £0.8m (2013: profit of £1.3m). Diluted underlying loss per share was 7.6p (2013: earnings per share of 13.4p).

The statutory results show statutory operating loss of £1.9m (2013: profit of £1.0m), statutory loss before tax of £2.1m (2013: profit of £0.8m) and statutory loss per share of 20.2p (2013: earnings per share 9.0p).

Exceptional items

The current year includes exceptional items of £1.0m (2013: £0.2m). During 2014 the Group rationalised its Foundry operations into one division, enabling the elimination of duplication roles and implementation of best practice. As a result the headcount of the Foundry division has been reduced by 14.0% from 329 to 283. 

Tax

The Group's underlying tax credit for the year was £0.2m (2013: charge of £0.2m) with an underlying effective rate of 26% (2013: 13%). The statutory total tax credit for the year was £0.5m (2013: charge of £0.1m), an effective tax rate of 24% (2013: 7%). The effective rate of tax is higher than the standard rate during the year due to completion of prior year research and development tax claims resulting in a tax repayment.

Cash generation and financing

Chamberlin incurred cash outflows in the year due to operating losses. Operating cash outflow was £1.5m (2013: inflow of £2.3m).

Capital expenditure for the year decreased to £1.0m (2013: £1.5m). This was below depreciation and amortisation of £1.4m (2013: £1.3m).

Our overdraft and net borrowings at 31 March 2014 increased to £3.6m (2013: £1.0m). The Group was previously funded through a £5.0m overdraft facility renewable annually. During March 2014, the Group restructured its borrowing facility. Bank debt now has three elements: £6.0m invoice discounting facility, £0.5m overdraft, and a £0.8m loan repayable over four years. The Company is now trading with a comfortable level of headroom within these facilities and with covenants set at levels appropriate for the Group and this revised debt structure.

Foreign exchange

It is the Group's policy to minimise risk to exchange rate movements affecting sales and purchases by economically hedging or netting currency exposures at the time of commitment, or when there is a high probability of future commitment, using currency instruments (primarily forward exchange contracts). A proportion of forecast exposures are hedged depending on the level of confidence and hedging is topped up following regular reviews. On this basis up to 50% of the Group's annual exposures are likely to be hedged at any point in time and the Group's net transactional exposure to different currencies varies from time to time.

Pension

The Group's defined benefit pension scheme was closed to future accrual in 2007. Following the last triennial valuation, as at 1 April 2010, contributions were set at £0.3m per year for the period under review increasing by 3% per year thereafter based on a deficit recovery period of 10 years. A triennial valuation as at 1 April 2013 is currently underway. The Group does not expect a significant increase in the annual deficit funding requirement.

The pension expense for the defined benefit scheme was £0.3m in 2014 (2013: £0.3m), and is shown in non-underlying. The Group cash contribution during the year was £0.4m (2013: £0.4m).

The Group operates a defined contribution pension scheme for its current employees. The cost of £0.3m (2013: £0.3m) is included within underlying operating performance.

The IAS 19 deficit at 31 March 2014 was £3.5m (2013: £3.9m). The decrease principally reflects the increase in the discount rate used to calculate scheme liabilities, as a consequence of a rise in bond yields over the last year and an out performance of assets against expected levels.

Restatement for adoption of IAS19

The consolidated financial statements as at 31 December 2013 have been restated to take account of the adoption of IAS 19: Employee Benefits (revised 2011). The principal impact on the Group has been that the return on plan assets included in the income statement is now based on the discount rate applied to the liabilities. Prior to this revision, the plan assets' expected return was included in the income statement.

The effect of this restatement on 2013 diluted earnings per share was a reduction of 0.6p from 9.6p to 9.0p.

David Roberts

20 May 2014

Consolidated Income Statement

for the year ended 31 March 2014

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2014

Consolidated Balance Sheet

at 31 March 2014

Consolidated Cash Flow Statement

for the year ended 31 March 2014

Consolidated statement of changes in equity

Share premium account

The share premium account balance includes the proceeds that were above the nominal value from issuance of the Company's equity share capital comprising 25p shares.

Capital redemption reserve

The capital redemption reserve has arisen on the cancellation of previously issued shares and represents the nominal value of those shares cancelled.

Retained earnings

Retained earnings include the accumulated profits and losses arising from the Consolidated Income Statement and certain items from the Statement of Comprehensive Income attributable to equity shareholders, less distributions to shareholders.

Hedging reserve

The hedging reserve records the effective portion of the net change in the fair value of the cash flow hedging instruments related to hedged transactions that have not yet occurred.

NOTES TO THE PRELIMINARY ANNOUNCEMENT

1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRS

The Group's and Company's financial statements of Chamberlin for the year ended 31 March 2014 were authorised for issue by the board of directors on 20 May 2014 and the balance sheets were signed on the board's behalf by Kevin Nolan and David Roberts. The Company is a public limited Company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Company's financial statements have been prepared in accordance with IFRS as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006.

The financial information set out in this announcement does not constitute the statutory accounts of the Group for the years to 31 March 2014 or 31 March 2013 but is derived from the 2014 Annual Report and Accounts. The Annual Report and Accounts for 2013 have been delivered to the Registrar of Companies and the Group Annual Report and Accounts for 2014 will be delivered to the Registrar of Companies in due course. The auditors, Ernst & Young LLP, have reported on the accounts for the years to 31 March 2013 and 31 March 2014 and have given an unqualified report which does not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006 nor an emphasis of matter paragraph.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated. The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006 not to publish its individual income statement and related notes.

Basis of consolidation

The consolidated financial statements comprise the financial statements of Chamberlin plc and its subsidiaries as at 31 March each year. The financial statements of subsidiaries are prepared for the same reporting year as the parent Company, using consistent accounting policies. All inter-Company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

Accounting policies

The preliminary announcement has been prepared on the same basis as the financial statements for the year ended 31 March 2013 except for the following items:

 The Group has applied IAS 1 Presentation of Items of Other Comprehensive Income which has introduced a grouping of items presented in other comprehensive income (OCI). The amendment affected presentation only and had no impact on the Group's financial position or performance. 

The Group has applied IAS 19 Employee Benefits (revised) with effect from 1 April 2013. This has resulted in prior period restatements of the finance cost of the pension scheme and a reclassification of defined benefit scheme administration costs into non-underlying other operating expenses from non-underlying finance costs. As administrative costs of the pension scheme were included in the net finance income/expense of the pension scheme under the former IAS 19 they were previously excluded from underlying items. Management considers that users of the financial statements will continue to focus on the performance of the Group excluding these costs. Therefore the definition of underlying profit which previously referred to the finance income/expense on the defined benefit pension scheme has been amended to exclude these administrative costs.

In the year ended 31 March 2013 £125,000 of pension scheme administration costs have been reclassified from net interest to other operating expenses. The interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a net-interest amount under IAS 19 (Revised 2011), which is calculated by applying the discount rate to the net defined benefit liability or asset at the start of each annual reporting period. In view of this change, an additional £60,000 pension scheme finance cost has been charged to the Group's profit and loss for the year. The adoption of IAS 19 Employee Benefits (revised) has not had an impact on the balance sheet reported at 31 March 2013.

The Group has applied IFRS 13 Fair Value Measurement. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair valueunder IFRS when fair value is required or permitted. The application of IFRS 13 has not impacted thefair value measurements carried out by the Group. All hedge contracts are shown at fair value, having an asset fair value of £186,000.

Share based payments are now shown within other operating expenses rather than shown separately within the Consolidated Income Statement, resulting in the elimination of the trading profit sub-total, as the directors believe this is more appropriate. £9,000 of share based payment charges (2013: credit of £69,000) have been reclassified.

No other amended IFRS that have become effective in the period have had a material impact on the financial statements.

Presentation of the Consolidated Income Statement

The Income Statement is allocated between Underlying items which relate to the trading activities of the business and Non-underlying items which are either non-recurring or are valued using market derived data which is outside of management's control.

3. SEGMENTAL ANALYSIS

For management purposes, the Group is organised into two operating divisions: Foundries and Engineering.

The Foundries segment is a supplier of iron castings, in raw or machined form, to a variety of industrial customers who incorporate the castings into their own products or carry out further machining or assembly operations on the castings before selling them on to their customers.

The Engineering segment provides manufactured and imported products to distributors and end-users operating in the safety and security markets. The products fall into the categories of door hardware, hazardous area lighting and control gear.

The Group's geographical segments are determined by the location of the Group's customers.

(i) By operating segment

(ii) By geographical segment

4. FINANCE COSTS AND FINANCE REVENUE

5. DIVIDENDS PAID AND PROPOSED

6. (LOSS)/ EARNINGS PER SHARE

The calculation of (loss)/ earnings per share is based on the profit attributable to shareholders and the weighted average number of ordinary shares in issue. In calculating the diluted (loss)/ earnings per share, adjustment has been made for the dilutive effect of outstanding share options. Underlying (loss)/ earnings per share, which excludes non-underlying items, as analysed below, has also been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group. Exceptional costs are detailed in note 7.

As at 31 March 2014 there is no adjustment for the 211,005 shares under option as they are required to be excluded from the weighted average number of shares for diluted (loss)/ earnings per share as they are anti-dilutive for the period then ended.

7. EXCEPTIONAL COSTS AND NON-UNDERLYING

Prior CEO leaving costs relate to contractual payments made to the former CEO, Tim Hair, and costs associated with the recruitment of the current CEO, Kevin Nolan

During 2014 the Group rationalised its Foundry operations into one division, enabling the elimination of duplication roles and implementation of best practice. Group reorganisation costs, including redundancy and recruitment, relate to this rationalisation.

8. FINANCIAL LIABILITIES

The overdraft is held with HSBC Bank plc as part of the Group facility of £500,000, is secured on all assets of the business, is repayable on demand and is renewable in February 2015. Interest is payable at 2.0% (2013: 2.0%) over base rate.

Asset finance loans are secured against various items of plant and machinery across the Group. These loans are repayable by monthly instalments for a period of four years to March 2018. Interest is payable at 3.25% over base rate. £200,000 is repayable within year 1-2 and a further £400,000 repayable in years 2-5.

Invoice finance balances are secured against the trade receivables of the Group, is repayable on demand and is renewable in March 2016. Interest is payable at 2.3% over base rate. The maximum facility is £6.0m. Management have assessed the treatment of the financing arrangements and have determined it is appropriate to recognise trade receivables and invoice finance liabilities separately.

9. PENSIONS ARRANGEMENTS

During the year, the Group operated funded defined benefit and defined contribution pension schemes for the majority of its employees, these being established under trusts with the assets held separately from those of the Group. The pension operating cost for all of the Group schemes for 2014 was £259,000 (2013: £276,000) plus £156,000 of financing cost (2013: £135,000).

The other schemes within the Group are defined contribution schemes and the pension cost represents contributions payable. The total cost of defined contributions schemes was £259,000 (2013: £276,000). The notes below relate to the defined benefit scheme.

The actuarial liabilities have been calculated using the Projected Unit method. The major assumptions used by the actuary were (in nominal terms):-

The post retirement mortality assumptions allow for expected increases in longevity. The current disclosures relate to assumptions based on longevity in years following retirement as of the balance sheet date, with future pensioners relating to an employee retiring in 2032.

The scheme was closed to future accrual with effect from 30th November 2007, after which the Company's regular contribution rate reduced to zero (previously the rate had been 9.1% of members' pensionable salaries). In addition the past service "catch up" contribution has been renegotiated with the Trustees and with effect from 1 April 2014 will increase to £27,365 per month (previously £26,782 per month), with a 3% annual increase thereafter, designed to return the scheme to a fully funded position by April 2020.

The contributions expected to be paid during the year to 31 March 2015 are £328,000.

Currently the triennial valuation as at 1 April 2013 is in progress.

The scheme assets are stated at the market values at the respective balance sheet dates. The assets and liabilities of the scheme were:

The weighted average duration of the pension scheme liabilities are 14.5 years (2013: 16.0 years).

A quantitative sensitivity analysis for significant assumptions as at 31 March 2014 is as shown below:

The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the year.

10. REPORT AND ACCOUNTS

Copies of the Annual Report will be available on the Group's website, www.chamberlin.co.uk and from the Group's head office at Chuckery Road, Walsall, West Midlands, WS1 2DU.