Last checked at 10 Jun 2010 07:00
AIM:CMH
CHAMBERLIN plc
("Chamberlin", the "Company" or the "Group")
FINAL RESULTS
for the year ended 31 March 2010
KEY POINTS
·; Challenging year - but recovery firmly on track
- upturn in demand evident in Q4 2009 and continued in 2010
·; Revenues of £28.453m (2009: £39.940m)
- some 40% below pre-recession levels
·; Underlying* operating loss of £0.923m (2009: profit of £0.460m)- but significant turnaround in H2
- H2 loss of £0.288m versus H1 loss of £0.635m, a 55% improvement
Statutory operating loss of £1.05m (2009: loss of £0.297m)
·; Exceptional reorganisation costs of £0.556m (2009: £0.446m)
- cost base realigned but full technical and production capabilities maintained
·; Cash generated from operations of £0.502m (2009: £0.693m)
·; Underlying* pre-tax loss tax of £1.056m (2009: pre-tax profit of £0.298m profit)
Statutory pre-tax loss of £1.421m (2009: loss of £0.498m)
·; Underlying* loss per share of 13.1p (2009: earnings of 2.2p)
Statutory loss per share of 16.4p (2009: loss of 11.4p)
·; Net assets of £7.9m at 31 March 2010 (2009: £9.5m)
·; Significant new win for turbocharger castings now in production
- full benefits in new financial year and beyond
·; Board positive on prospects for return to profitability in new financial year
Chairman, Tom Brown, commented,
"The improvement in the Group's second half performance reflects the upturn in demand across all our businesses as the global economic backdrop has improved. More specifically, the Group has secured new business in the turbocharger market, requiring specialist technical manufacturing capability, and this should help to underpin Chamberlin's continuing recovery.
With recovery now widely established across Chamberlin businesses, production capacity fully intact and the cost base of the Group at a lower level, we anticipate a significantly better year than the last and are positive on prospects for the Group's return to profitability in the new financial year. The Board remains committed to a policy of progressive dividends and we look forward to returning to payments as market conditions improve."
* Non-underlying items represent business reorganisation costs, the movement in unrealised mark to market foreign currency gains and losses on monetary assets and liabilities and forward foreign currency contracts, net of realised losses on surplus foreign exchange contracts, and net financing costs on pension obligations.
Chamberlin plc
Tom Brown, Chairman T: 020 7448 1000 (today)
Tim Hair, Chief Executive T: 01922 707100 (thereafter)
Charles Stanley Securities T: 020 7149 6000
(Nominated Adviser)
Russell Cook
Biddicks T: 020 7448 1000
Katie Tzouliadis
Chairman's Statement
In my Statement at the half year stage I reported that the full impact of the economic downturn was evident in the Group's trading figures for the first half but that we expected to achieve an improvement in the second half of the financial year to 30 March 2010. I am therefore very pleased to announce that we have seen a marked upturn in business in this period and results for the second half show a significant turnaround on the first half, with underlying H2 pre-tax losses contracting to £288,000 from losses of £635,000 in H1. This outcome also represents an improvement on the same six month period last year, when underlying pre-tax losses were £445,000.
The turnaround has been driven by recovery in demand across many of our markets. However the Group also benefited from the fundamental improvements we made to the business prior to the downturn in 2008 and the operational and organisational changes we have implemented since then. The result is that, with demand returning, we have benefited from lower costs and also secured new customers. Looking ahead, we continue to be well-placed to benefit from recovering demand and we anticipate the positive trading trend to be maintained in the new financial year.
Results
Reflecting the severe downturn, the Group's revenues for the year ended 31 March 2010 showed a year on year decrease of 28% to £28.5m (2009: £39.9m). This principally reflected the contraction in revenues at our foundries which contributed £22.4m to the overall result, a year on year decline of 33%. By contrast, our engineering businesses saw only a 10% contraction in revenues and contributed £6.0m to the Group's total.
Excluding business reorganisation costs of £556,000, the underlying operating loss for the year was £923,000 against an underlying operating profit of £460,000 last year. After finance costs of £133,000, the underlying pre-tax loss was £1,056,000 (2009: underlying pre-tax profit before tax of £298,000), with the first half pre-tax loss at £692,000 and the second half pre-tax loss at £364,000. The underlying loss per share was 13.1p (2009: underlying earnings per share of 2.2p)
The statutory pre-tax loss for the year was £1.421m (2009: loss of £0.498m) and the statutory loss per share was 16.4p (2009: loss per share of 11.4p)
The capital expenditure over the year totalled £0.610m (2009: £2.074m).
Our close focus on cash control and inventory reduction meant that the Group generated £502,000 in positive cash flow from operating activities (2009: £693,000). I am pleased to note that the Group has continued to generate cash from operations throughout the recession.
Our balance sheet remains robust. Gearing is at 44% and net assets are at £7.86m. The Group's borrowings at the year end stood at £3.45m (2009: £3.26m) and we have recently renewed our overdraft facility on existing terms and increased the limit to £5.0m (2009: £4.5m) to provide enhanced flexibility as demand recovers.
Chamberlin's defined benefit pension scheme was closed to further accrual in 2007 but movements in financial markets have increased the deficit to £2.4m (2009: £1.8m).
Growth Strategy
The management team appointed in 2006 to modernise and revitalise Chamberlin developed a strategy to expand the business by acquisition after the turnaround had been largely completed in 2008 but this had to be deferred due to the downturn. We are now refocusing on acquisitions and are actively considering those prospects which meet our acquisition criteria based on 'difficult things done well'.
Outlook
The improvement in the Group's second half performance reflects the upturn in demand across all our businesses as the global economic backdrop has improved. More specifically, the Group has secured new business in the turbocharger market, requiring our specialist technical manufacturing capability, and this should help to underpin Chamberlin's continuing recovery.
With recovery now widely established across Chamberlin businesses, production capacity fully intact and the cost base of the Group at a lower level, we anticipate a significantly better year than the last and are positive on prospects for the Group's return to profitability in the new financial year. The Board remains committed to a policy of progressive dividends and we look forward to returning to payments as market conditions improve.
Tom Brown
Chairman
10 June 2010
BUSINESS REVIEW
INTRODUCTION
After the extreme downturn in November 2008, trading conditions over the course of 2009 were challenging, with the impact of the economic and financial downturn varied, both in timing and severity, across the different markets we serve.
Management acted promptly to minimise the impact of recession, significantly reducing costs while maintaining Chamberlin's technical and production capability. These actions have stood us in good stead as demand has returned. A slow overall recovery in demand started during the latter part of 2009 and has continued into 2010. The Group's financial performance reflects this, with second half results showing a significant improvement on the first half.
We are especially pleased to report that, by the financial year end in March 2010, all areas of the Group's operations were demonstrating recovery and we also secured some important new orders. The Group therefore begins the current financial year in a much improved position and we expect to see the positive trading trend to be maintained over the new financial year.
FINANCIAL RESULTS
Revenues of £28.5m for the year to 31 March 2010 were some 40% below pre-recessionary levels and equated to a loss of added value of approximately £6m. The significant cost reductions we made have helped to offset some of the negative impact and the Group delivered an underlying operating loss of £923,000 against an underlying operating profit of £460,000 last year. Importantly, the results for the second half of the year show a significant improvement over the first half, with the second half operating loss reducing to £288,000 from £635,000 in the first half.
£502,000 of cash was generated from operations, despite the losses, as a consequence of strong working capital control. This action, combined with restrictions in capital expenditure, contained the increase in our borrowings which ended the year at £3,449,000 (2009: £3,258,000) giving significant headroom against the overdraft facility which is now £5,000,000.
Net assets were £7.9m at 31 March 2010 (2009: £9.5m), reduced as a consequence of the loss after tax for the year of £1.220m and an increase in the pension deficit of £412,000 (net of deferred tax). The latter is a combination of strong investment returns offset by a reduction in the discount rate as a consequence of a fall in bond yields during the year. The increase in gearing to 44% (2009: 34%) was predominantly related to a reduction in net assets rather than an increase in borrowings.
OPERATIONS
In a difficult year, we continued to focus tightly on costs and efficiencies, taking steps to implement saving and business improvements in order to minimise the impact of the adverse trading environment while preserving the Group's commercial and financial strengths. An important aspect was to use short-time working extensively to avoid the loss of skilled staff who are now needed as volumes recover.
Following our actions, Chamberlin now has a lower cost base while technically and operationally remaining efficient and effective.
Foundries
The activities at our three foundries, at Walsall, Scunthorpe and Leicester, accounted for 79% of the Group's revenue and during the year we reviewed their operational organisation and undertook some reorganisation.
The result was to establish the Scunthorpe foundry, which manufactures very heavy, low volume castings, under its own dedicated management. This foundry is one of only three in the UK with the capability to cast to 6 tonnes in high-grade iron. At the same time, we brought the Leicester foundry under the control of our subsidiary, Chamberlin & Hill Castings, which also manages our Walsall foundry. The Leicester foundry specialises in medium weight, lower volume castings in specialist iron metallurgies while the Walsall foundry produces castings with complex internal passages. The benefits of this reorganisation, completed in October 2009, are now visible and the amalgamation of the Leicester and Walsall foundries has delivered synergies in a number of areas.
During the recession, we have seen a number of customers review and change their policy on sourcing from low-cost economies. Many have complained of inflexibility, which in some cases has resulted in extraordinary levels of inventory and returned to dual-sourcing or full UK supply, transferring work into our foundries and bolstering demand.
Chamberlin & Hill Castings
As explained, the management team at our Chamberlin & Hill Castings subsidiary took over control of our Leicester foundry (previously managed by Russell Ductile Castings, together with the Scunthorpe foundry) in the first half of the year. The subsidiary now runs this business together with our Walsall foundry. The two foundries have some common processes and following the implementation of a new Enterprise Resource Planning system in both plants, they now run efficiently under a single management and financial structure, allowing substantial overhead reductions.
Castings production at Walsall is driven by demand for automotive turbochargers, hydraulics and heavy diesel engines. The business has seen a gradual recovery in volume in the second half and is currently operating at approximately 70% of the pre-recession peak, with further recovery expected in the coming months. In 2008, the Walsall foundry became an approved supplier to a second major turbocharger manufacturer and, after an 18 month product development cycle, has recently begun supplying production volumes. These sophisticated castings, with complex internal passages, require a high degree of technical competence in their manufacture and we have further products in the development process. These will enter production during the next two years and should increase revenues significantly in addition to the recovery in the baseline business.
The Walsall foundry continues to make good progress in the hydraulics market and we expect to see new supply contracts as well as a recovery in volumes from existing customers in the coming year.
While the Leicester foundry's largest single market is construction equipment, we see scope to use the foundry's position as a specialist in low volume high-strength castings to expand into other sectors. The prolonged period of reduced output from UK construction manufacturers has kept volumes low but we are seeing some signs of demand improving from this and other sectors.
Russell Ductile Castings
Following reorganisation, our Scunthorpe foundry now operates on a stand-alone basis, manufacturing complex castings of between 100kg and 6000kg for a wide range of industries. The foundry saw a clear upturn in demand in the final quarter and as orders for its castings are generally placed on long lead-times, the upturn in the final quarter should support increased sales in the new financial year.
With reorganisation, we appointed a new Managing Director at Russell Ductile Castings, who brings sales and commercial experience across a broad range of engineering sectors. This will help to support our objective to expand the business into new industry sectors and initial indications are encouraging. The combination of new leadership and the move to become a stand-alone business has accelerated the cultural change in the operation, and increased employee involvement has delivered operational improvements. We believe that Russell Ductile can make a significant contribution to our results in coming years.
Engineering
Our two engineering businesses, Fred Duncombe and Petrel, accounted for 21% of the Group's revenues, with turnover down by only 10% year on year and by 16% on pre-recession levels.
Fred Duncombe
Fred Duncombe is the second largest provider in the UK of emergency exit hardware, which it supplies under the Exidor brand name and through own-branded products. Emergency exit hardware makes up 80% of its business, with the remainder being in related architectural hardware.
Market demand over the past year has, predictably, been weak but we have built a highly effective sales organisation and believe that we are taking market share. Duncombe is well respected in its industry, tightly managed and well placed to take advantage as the sector returns to growth.
Petrel
Petrel, a niche supplier of lighting and electrical controls for hazardous environments, has been least affected by the recession, and the high level of regulation in the market it serves has helped to protect volumes in the industry as a whole.
Petrel has undergone a programme of change in the past two years, with many new initiatives to improve customer service levels and reduce our cost base. The most recent change, to the Sales & Marketing function, is aimed at expanding our customer base and driving both UK and export sales. All lighting applications are likely to see a move to LED technology over a period of years, including the markets Petrel serves; Petrel is actively developing LED-based technology and has recently launched its first products in this area.
Health, Safety & Environmental
We have carried out a comprehensive programme of risk assessment, process change, equipment upgrade and training over the year and Chamberlin's health, safety and environmental standards now equal the best in our industry. We made particular progress in reducing our environmental impact, through programmes covering waste reduction, recycling and emissions control. We are pleased to report that our Walsall site has recently achieved accreditation to ISO14001, the internationally recognised environmental management standard.
OUTLOOK
The upturn in demand in the second half of the year and into the start of the new financial year is encouraging and we are also seeing opportunities to win new business outside the existing customer base.
Over the past eighteen months, we have reduced the cost base without losing the characteristics which mark us out from our competitors. We have maintained our technical capabilities and production capacity. As demand improves, we are therefore well placed to see revenues grow and remain positive about an improved performance in the current financial year and beyond.
| Tim Hair Chief Executive |
| Mark Bache Finance Director |
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2010
|
|
| Year ended 31 March 2010 |
| Year ended 31 March 2009 | ||||
|
| Notes | Underlying | Non-Underlying | Total |
| Underlying | Non-Underlying | Total |
|
|
| £000 | £000 | £000 |
| £000 | £000 | £000 |
|
|
|
|
|
|
|
|
|
|
| Revenue | 3 | 28,453 | - | 28,453 |
| 39,940 | - | 39,940 |
| Cost of sales |
| (23,992) | - | (23,992) |
| (33,783) | - | (33,783) |
| Foreign currency gain/(loss) |
|
- |
430 |
430 |
|
- |
(311) |
(311) |
| Gross profit |
| 4,461 | 430 | 4,891 |
| 6,157 | (311) | 5,846 |
|
|
|
|
|
|
|
|
|
|
| Other operating expenses |
|
(5,384) |
- |
(5,384) |
|
(5,697) |
- |
(5,697) |
| Trading (loss)/profit |
| (923) | 430 | (493) |
| 460 | (311) | 149 |
| Business reorganisation costs | 7 |
- |
(556) |
(556) |
|
- |
(446) |
(446) |
|
|
|
|
|
|
|
|
|
|
| Operating (loss)/profit |
|
(923) |
(126) |
(1,049) |
|
460 |
(757) |
(297) |
|
|
|
|
|
|
|
|
|
|
| Finance costs |
| (133) | (239) | (372) |
| (162) | (39) | (201) |
|
|
|
|
|
|
|
|
|
|
| (Loss)/profit before tax |
|
(1,056) |
(365) |
(1,421) |
|
298 |
(796) |
(498) |
|
|
|
|
|
|
|
|
|
|
| Tax credit/(expense) |
|
85 |
116 |
201 |
|
(92) |
(259) |
(351) |
| (Loss)/profit for the year from continuing operations |
|
(971) |
(249) |
(1,220) |
|
206 |
(1,055) |
(849) |
|
|
|
|
|
|
|
|
|
|
| (Loss)/earnings per share |
|
|
|
|
|
|
|
|
| Basic | 6 |
|
| (16.4)p |
|
|
| (11.4)p |
| basic underlying | 6 | (13.1)p |
|
|
| 2.2p |
|
|
| Diluted | 6 |
|
| (16.4)p |
|
|
| (11.4)p |
| diluted underlying | 6 | (13.1)p |
|
|
| 2.2p |
|
|
Non -underlying items represent business reorganisation costs, the movement in unrealised mark to market foreign currency gains and losses on monetary assets and liabilities and forward foreign currency contracts, net of realised losses on surplus foreign exchange contracts and net financing costs on pension obligations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2010
|
|
| 2010 |
| 2009 |
|
|
| £000 |
| £000 |
| Loss for the year |
| (1,220) |
| (849) |
| Other comprehensive income |
|
|
|
|
| Actuarial losses on pension assets and liabilities |
| (572) |
| (982) |
| Deferred tax credit on actuarial losses |
| 160 |
| 275 |
| Other comprehensive income for the period net of tax |
| (412) |
| (707) |
|
|
|
|
|
|
| Total comprehensive income for the period attributable to equity holders of the parent company |
|
(1,632) |
|
(1,556) |
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEET
at 31 March 2010
|
|
| 2010 |
| 2009 |
|
|
|
|
|
|
|
|
| £000 |
| £000 |
| Non-current assets |
|
|
|
|
| Property, plant and equipment |
| 8,319 |
| 8,968 |
| Intangible assets |
| 650 |
| 690 |
| Deferred tax assets |
| 923 |
| 809 |
|
|
| 9,892 |
| 10,467 |
| Current assets |
|
|
|
|
| Inventories |
| 3,294 |
| 5,078 |
| Trade and other receivables |
| 6,358 |
| 6,004 |
|
|
| 9,652 |
| 11,082 |
|
|
|
|
|
|
| Total assets |
| 19,544 |
| 21,549 |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
| Financial liabilities |
| 3,449 |
| 3,258 |
| Trade and other payables |
| 5,731 |
| 6,614 |
| Provisions |
| 48 |
| 48 |
|
|
| 9,228 |
| 9,920 |
| Non current liabilities |
|
|
|
|
| Deferred tax |
| 92 |
| 340 |
| Defined benefit pension scheme deficit |
| 2,366 |
| 1,828 |
|
|
| 2,458 |
| 2,168 |
|
|
|
|
|
|
| Total Liabilities |
| 11,686 |
| 12,088 |
|
|
|
|
|
|
| Capital and reserves |
|
|
|
|
| Called up share capital |
| 1,859 |
| 1,859 |
| Share premium account |
| 862 |
| 862 |
| Capital redemption reserve |
| 109 |
| 109 |
| Retained earnings |
| 5,028 |
| 6,631 |
| Total equity |
| 7,858 |
| 9,461 |
|
|
|
|
|
|
| Total equity and liabilities |
| 19,544 |
| 21,549 |
|
|
|
|
|
|
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2010
|
|
| 2010 |
| 2009 |
| Operating activities |
| £000 |
| £000 |
|
|
|
|
|
|
| Loss for the year |
| (1,220) |
| (849) |
| Adjustments to reconcile loss for the year to net cash inflow from operating activities: |
|
|
|
|
| Taxation |
| (201) |
| 351 |
| Net finance costs |
| 372 |
| 201 |
| Depreciation of property, plant and equipment |
| 1,129 |
| 1,058 |
| Amortisation of software |
| 44 |
| 45 |
| Amortisation of development costs |
| 83 |
| 52 |
| Profit on disposal of property, plant and equipment |
| (7) |
| (11) |
| Share based payments |
| 28 |
| 12 |
| Pension element of finance costs |
| (239) |
| (39) |
| Difference between pension contributions paid and amounts recognised in the Income Statement |
|
(34) |
|
(231) |
| Decrease/(increase) in inventories |
| 1,784 |
| (462) |
| (Increase)/decrease in receivables |
| (354) |
| 2,715 |
| Decrease in payables |
| (883) |
| (1,537) |
| Movement in provisions |
| - |
| (612) |
| Cash generated from operations |
| 502 |
| 693 |
|
|
|
|
|
|
| Investing activities |
|
|
|
|
| Purchase of property, plant and equipment |
| (523) |
| (1,725) |
| Purchase of software |
| (87) |
| (224) |
| Development costs |
| - |
| (184) |
| Disposal of plant and equipment |
| 50 |
| 59 |
| Net cash flow from investing activities |
| (560) |
| (2,074) |
| Financing activities |
|
|
|
|
| Interest paid |
| (133) |
| (162) |
|
|
|
|
|
|
| Equity dividends paid |
| - |
| (684) |
| Net cash flow from financing activities |
| (133) |
| (846) |
|
|
|
|
|
|
| Net decrease in cash and cash equivalents |
| (191) |
| (2,227) |
|
|
|
|
|
|
| Cash and cash equivalents at the start of the year |
| (3,258) |
| (1,031) |
|
|
|
|
|
|
| Cash and cash equivalents at the end of the year |
| (3,449) |
| (3,258) |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
|
|
|
|
| Financial liabilities |
| (3,449) |
| (3,258) |
|
|
| (3,449) |
| (3,258) |
STATEMENT OF CHANGES IN EQUITY
|
|
Share capital |
Capital redemption reserve |
Share premium |
Retained earnings | Attributable to equity holders of the parent |
|
|
|
|
|
|
|
|
| £000 | £000 | £000 | £000 | £000 |
| Group |
|
|
|
|
|
| Balance at 1 April 2008 | 1,859 | 109 | 862 | 8,859 | 11,689 |
| Total comprehensive income and expense for the year to 31 March 2009 |
- |
- |
- |
(1,556) |
(1,556) |
| Dividends paid | - | - | - | (684) | (684) |
| Share based payments | - | - | - | 12 | 12 |
| Balance at 31 March 2009 | 1,859 | 109 | 862 | 6,631 | 9,461 |
| Total comprehensive income and expense for the year to 31 March 2010 |
- |
- |
- |
(1,632) |
(1,632) |
| Share based payments | - | - | - | 28 | 28 |
| Balance at 31 March 2010 | 1,859 | 109 | 862 | 5,028 | 7,858 |
|
|
|
|
|
|
|
Share Premium Account
The share premium account balance included 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.
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 2010 were authorised for issue by the board of directors on 10 June 2010 and the balance sheets were signed on the board's behalf by Tim Hair and Mark Bache. 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 2010 or 31 March 2009 but is derived from the 2010 Annual Report and Accounts. The Annual Report and Accounts for 2009 have been delivered to the Registrar of Companies and the Group Annual Report and Accounts for 2010 will be delivered to the Registrar of Companies in due course. The auditors, Ernst & Young LLP, have reported on the accounts for the year to 31 March 2010 and have given an unqualified report which does not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006. The accounts for the year ended 31 March 2009 also received an unqualified audit report from Ernst & Young LLP.
The preliminary announcement has been prepared on the same basis as the financial statements for the year ended 31 March 2009.
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.
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.
There are no transactions between operating segments.
The Group's geographical segments are determined by the location of the Group's customers.
(i) By operating segment
|
|
| Segmental revenue | Segmental operating (loss)/profit | |||||||||
| Year ended |
|
| 2010 | 2009 | 2010 | 2009 | ||||||
|
|
|
| £000 | £000 | £000 | £000 | ||||||
| Foundries |
|
| 22,423 | 33,217 | (488) | 723 | ||||||
| Engineering |
|
| 6,030 | 6,723 | 178 | 260 | ||||||
|
|
|
|
|
|
|
| ||||||
| Segmental Results |
|
| 28,453 | 39,940 | (310) | 983 | ||||||
|
|
|
|
|
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| Reconciliation of reported segmental operating loss |
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| Segment Results |
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| (310) | 983 | ||||||
| Shared costs |
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| (613) | (523) | ||||||
| Reorganisation costs |
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| (556) | (446) | ||||||
| Net finance costs |
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| (372) | (201) | ||||||
| Foreign currency gain/(loss) |
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| 430 | (311) | ||||||
| Loss before tax |
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|
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| (1,421) | (498) | ||||||
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| Segmental assets |
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| Foundries |
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| 12,188 | 14,968 | ||||||
| Engineering |
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| 5,561 | 5,717 | ||||||
| Segmental net assets |
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| 17,749 | 20,685 | ||||||
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| Segmental liabilities |
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| Foundries |
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| (2,246) | (4,150) | ||||||
| Engineering |
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| (2,702) | (2,537) | ||||||
| Segmental net assets |
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| (4,948) | (6,687) | ||||||
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| Unallocated net liabilities |
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| (4,943) | (4,537) | ||||||
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| Total net assets |
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| 7,858 | 9,461 | ||||||
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| Capital expenditure, depreciation and amortisation
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| Capital additions | Foundries | Engineering | Total |
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| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
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| £000 | £000 | £000 | £000 | £000 | £000 |
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| Property, plant and equipment | 401 | 1,495 | 122 | 230 | 523 | 1,725 |
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| Software | 86 | 135 | 1 | 89 | 87 | 224 |
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| Development costs | - | 153 | - | 31 | - | 184 |
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| Depreciation and Amortisation |
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| Property, plant and equipment | (940) | (870) | (189) | (188) | (1,129) | (1,058) |
| |||||
| Software | (28) | (29) | (16) | (16) | (44) | (45) |
| |||||
| Development costs | (57) | (29) | (26) | (23) | (83) | (52) |
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(ii) By geographical segment
|
| 2010 | 2009 |
| Revenue by location of customer | £000 | £000 |
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| United Kingdom | 19,961 | 30,666 |
| Rest of Europe | 6,781 | 7,428 |
| Other countries | 1,711 | 1,846 |
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| 28,453 | 39,940 |
4. FINANCE COSTS AND FINANCE REVENUE
|
| 2010 | 2009 |
|
| £000 | £000 |
| Finance costs |
|
|
| Bank overdraft interest payable | (133) | (162) |
| Finance cost of pensions | (239) | (39) |
|
| (372) | (201) |
5. DIVIDENDS PAID AND PROPOSED
|
| 2010 | 2009 |
|
| £000 | £000 |
| Paid equity dividends on ordinary shares |
|
|
| 2009 final dividend of 0.00p (2008: 8.00p) per share | - | 595 |
| 2010 interim dividend of 0.00p (2009: 1.2p) per share | - | 89 |
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| - | 684 |
| Proposed final dividend subject to shareholder approval |
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| 2010 final dividend of 0.00p (2009: 0.00p)per share | - | - |
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6. EARNINGS PER SHARE
The calculation of 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 earnings per share adjustment has been made for the dilutive effect of outstanding share options. Underlying earnings per share, which excludes business reorganisation costs, mark to market foreign currency movements and net financing costs of pension obligation less related tax thereon, as analysed below, has also been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group. Reorganisation and exceptionals are detailed in note 7.
|
| 2010 | 2009 |
|
| £000 | £000 |
| Loss for basic earnings per share | (1,220) | (849) |
| Reorganisation and exceptionals | 556 | 446 |
| Taxation effect of operating exceptionals | (156) | (125) |
| Mark to market foreign currency (gain)/loss | (430) | 311 |
| Taxation effect of mark to market foreign currency (gain)/ loss | 107 | (87) |
| Net Financing Costs on pension obligations | 239 | 39 |
| Taxation effect of pension obligation | (67) | (11) |
| Deferred tax effect of the abolition of IBAs included in exceptional items | - | 471 |
| (Loss)/earnings for underlying earnings per share | (971) | 195 |
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| 2010 | 2009 |
|
| £000 | £000 |
| Weighted average number of ordinary shares | 7,438 | 7,438 |
| Adjustment to reflect shares under options | 327 | 508 |
| Weighed average number of ordinary shares - fully diluted | 7,765 | 7,946 |
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7. REORGANISATION AND EXCEPTIONAL COSTS
|
| 2010 | 2009 |
|
| £000 | £000 |
|
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| Restructuring and severance costs | (397) | (253) |
| Legal costs | - | (193) |
| Inventory write down | (159) | - |
|
| (556) | (446) |
| Taxation |
|
|
| -tax effect of operating exceptionals | 156 | 125 |
| -abolition of IBAs | - | (471) |
|
| 156 | (346) |
Restructuring and severance costs relate to redundancies and other costs incurred in reorganising the business in response to the recession.
Inventory write down relates to the stock disposal, at a significant discount, on exit from a business stream within the Engineering Division.
Legal costs relate to the final costs of settling the claim for alleged nuisance which has been noted in the last two years accounts. This together with an amount provided at 31 March 2008, comprises the Group's own legal expenses plus the cost of settlement with the claimants and their lawyers.
8. 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 headquarters at Chuckery Road, Walsall, West Midlands, WS1 2DU.