Goodwin Regulatory News (GDWN)

27 Jan 2006 15:00

Goodwin PLC27 January 2006 GOODWIN PLC UNAUDITED INTERIM RESULTS CHAIRMAN'S STATEMENT The pre-tax profit of £2,107,000 is a 22.4% increase over the same period lastyear and turnover has increased by 31.8%. Higher energy costs have affectedmargins and yet are stimulating greater demand for engineering within the energyindustries. Our heavy engineering order book remains very healthy. In accordance with European Union regulations, the Group is required to adoptInternational Financial Reporting Standards (IFRS) in its consolidated accountsfor the first time and notes explaining these changes are included. J. W. GOODWIN, Chairman The Interim Report is to be sent to shareholders today and will be madeavailable to the public at the company's registered office. Goodwin PLC Unaudited Interim Results Group Income Statement for the half year ended 31st October 2005 Half Year Ended Half Year Ended Year Ended 31st October 2005 31st October 2004 30th April 2005 £'000 £'000 £'000 Turnover - continuing 26,977 20,462 44,945 Operating Profit before Finance Costs 2,278 1,931 4,088 Finance Costs (171) (210) (553) Profit Before Tax 2,107 1,721 3,535 Tax Expense (638) (562) (1,016) Profit for the Period 1,469 1,159 2,519 Attributable to: Equity Holders of the Parent 1,434 1,141 2,477Minority Interest 35 18 42 1,469 1,159 2,519 Earnings per Ordinary Share 19.91p 15.85p 34.40pBasic and diluted Goodwin PLC Unaudited Interim Results Group Balance Sheet at 31st October 2005 Half year ended Half year ended Year Ended 31st October 2005 31st October 2004 30th April 2005 £'000 £'000 £'000 AssetsIntangible Assets 227 140 130Property, Plant and Equipment 10,948 10,670 10,920Total Non Current Assets 11,175 10,810 11,050 Inventories 11,716 9,436 10,004Trade and Other Receivables 11,367 11,516 9,743Cash 462 242 275Total Current Assets 23,545 21,194 20,022 Total Assets 34,720 32,004 31,072 LiabilitiesTrade and Other Current Payables 13,038 9,343 14,459Corporation Tax Liabilities 590 519 635Obligations under Finance Leases 260 340 315Bank Overdrafts 4,486 7,662 945Total Current Liabilities 18,374 17,864 16,354 Net Current Assets 5,171 3,330 3,668 Deferred tax 1,060 975 951Obligations under Finance Leases 456 464 576Non Current Liabilities 1,516 1,439 1,527 Total Liabilities 19,890 19,303 17,881 Net Assets 14,830 12,701 13,191 EquityShare Capital 720 720 720Retained Earnings 13,696 11,777 12,262Foreign Exchange Hedge Reserve 158 0 0Overseas Subsidiaries Translation Reserve (8) 0 (20)Equity Attributable to Equity Holders of 14,566 12,497 12,962ParentMinority Interests 264 204 229 Total Equity 14,830 12,701 13,191 Goodwin PLC Unaudited Interim Results Group Cash Flow Statement For the half year ended 31st October 2005 Half Year Half Year Year Ended Ended Ended 31st October 2005 31st October 2004 30th April 2005 £'000 £'000 £'000 Cash Flows From Operating ActivitiesProfit for the period 1,469 1,159 2,519Adjustments for:Depreciation 732 720 1,506Amortisation 20 20 40Interest Expense 171 210 553Loss on Sale of Fixed Assets 4 2 43Corporation Tax Expense 638 562 1,016Operating Profit Before changes in Working Capital and Provisions 3,034 2,673 5,677Increase in Trade and other Receivables (1,379) (1,914) (156)Increase in Inventories (1,681) (2,097) (2,665)(Decrease) / Increase in Payments on Account (180) 464 3,301(Decrease) / Increase in Trade and Other Payables (1,322) 403 2,808Cash Generated From Operations (1,528) (471) 8,965Interest Paid (171) (210) (553)Corporation Tax Paid (642) (392) (753)Net Cash From Operating Activities (2,341) (1,073) 7,659 Cash Flows From Investing ActivitiesProceeds from Sale of Plant and Equipment 5 1 25Acquisition of Plant and Equipment (739) (1,265) (2,177)Acquisition of Subsidiary Interest (116) 0 (11)Net Cash From Investing Activities (850) (1,264) (2,163) Cash Flows from Financing ActivitiesPayment of Capital Element of Finance (175) (213) (435)Lease ObligationsDividends Paid - - (850)Net Cash from Financing Activities (175) (213) (1,285) Net (Decrease) /Increase in Cash and (3,366) (2,550) 4,211Cash EquivalentsOpening Cash and Cash Equivalents (670) (4,871) (4,871)Effect of Exchange Rate Fluctuations on Cash Held 12 0 (10)Closing Cash and Cash Equivalents (4,024) (7,421) (670) Goodwin PLC Unaudited Interim Results Group Statement of Changes in Equity for the half year ended 31st October 2005 Half year ended Half year ended Year ended 31st October 2005 31st October 2004 30th April 2005 £,000 £'000 £'000 Balance at start of period 13,191 11,542 11,542Adjustment for IAS 39 2,856Revised Balance at Start of Period 16,047 Profit for the Period 1,469 1,159 2,519Prior Year Dividend Paid (850)Effective Changes in Fair Value of Cash Flow Hedges (3,854)Tax on Items Taken Directly to Equity 1,156Exchange Movements 12 (20) Balance at End of Period 14,830 12,701 13,191 Goodwin PLC Unaudited Interim Results for the half year ended 31st October 2005 NOTES 1. Key changes in accounting policies From 2005, the Group will produce its consolidated report and accounts inaccordance with International Financial Reporting Standards as adopted for usein the European Union (IFRS). Previously the Group reported under UK GenerallyAccepted Accounting Practice (UK GAAP). The key changes that have arisen due tothe transition from reporting under UK GAAP to reporting under IFRS are set outin Appendix 1. The Group's date of transition to IFRS is 1st May 2004, which isthe beginning of the comparative period for the 2005 financial year. Thereforethe opening balance sheet for IFRS purposes is that reported at 30th April 2004as amended for changes due to IFRS. This interim financial report is the first to be prepared under IFRS, whichresults in the comparative figures being prepared on the same basis and aretherefore restated from those previously reported under UK GAAP. To helpunderstand the impact of the transition, reconciliations have been produced toshow the changes made to statements previously reported under UK GAAP inarriving at the equivalent statements under IFRS and are also included inAppendix 1. The income statement for the six months to 31st October 2005 and the balancesheet at that date are reported under IFRS. As they have not previously beenreported under UK GAAP no reconciliation to IFRS is provided. The interim report has been prepared using accounting policies consistent withInternational Financial Reporting Standards (IFRS) anticipated to be in effectat the first reporting date which is 30th April 2006. They have been preparedon the assumption that all IFRS statements issued as effective from 2005reporting will be endorsed by the European Commission. As permitted by IFRS 1 "First Time Adoption of International Financial ReportingStandards", the Group has elected not to restate comparative information for theFinancial Instrument standards IAS 32 and IAS 39. In this respect the prioryear information has been prepared under UK GAAP. A full set of UK GAAP accounting policies was published in the Group's reportand accounts for the year to 30th April 2005. The accounting policies that havechanged under IFRS are detailed below. Basis of accounting The financial statements and reconciliations shown in this report have beenprepared on an historic cost basis except for certain financial instrumentswhich are measured at fair value. The statements are also prepared on the basisof IFRS expected to be in issue at 30th April 2006. The financial statementspresented are unaudited. Intangible assets All business combinations are accounted for by applying the purchase method. Foracquisitions that have occurred since 1st May 2004, goodwill is recorded as thedifference between the fair value of consideration given on acquisition and theaggregate fair value of its identifiable net assets. In respect of acquisitionsprior to this date, goodwill is recorded at deemed cost under UK GAAP. Inaccordance with IFRS3 'Business Combinations', goodwill is no longer amortisedbut stated at cost less any provision for impairment in value. In accordancewith IFRS 1 business combinations made prior to 1st May 2004 have not beenrestated. Goodwill is reviewed annually for any impairment in its value or atsuch time there is an indication that its value has reduced. Expenditure on development activities is capitalised according to IAS 38 if theproduct or process is technically and commercially feasible and the Group hassufficient resources to complete development. The expenditure capitalisedincludes the cost of materials, direct labour and an appropriate proportion ofoverheads. Other development expenditure is recognised in the income statementas an expense as incurred. Capitalised development expenditure is stated at costless accumulated amortisation and impairment losses and amortised over itsuseful economic life. Foreign currency Transactions in foreign currencies are translated at the foreign exchange rateruling at the date of the transaction. Monetary assets and liabilitiesdenominated in foreign currencies at the balance sheet date are translated atthe foreign exchange rate ruling at that date. Foreign exchange differencesarising on translation are recognised in the income statement. For consolidation purposes the assets and liabilities of overseas subsidiaryundertakings are translated at foreign exchange rates ruling at the balancesheet date. The revenues and expenses of overseas subsidiary undertakings aretranslated at an average rate for the period where this rate approximates to theforeign exchange rates ruling at the dates of the transactions. This is a changefrom UK GAAP where the revenues were translated at closing rate. Exchange differences arising from this translation of foreign operations aretaken directly to the translation reserve. They are released into the incomestatement upon disposal. The Group has taken advantage of relief available in IFRS 1 to deem thecumulative translation differences for all foreign operations to be zero at thedate of transition to IFRS (1st May 2004). Deferred taxation Deferred tax is provided using the balance sheet liability method, providing fortemporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for taxation purposes. Theamount of deferred tax provided is based on the expected manner of realisationof the settlement of the carrying value of the assets and liabilities, using thetax rates enacted or substantively enacted at the balance sheet date. Deferredtax assets are recognised to the extent that it is regarded as more likely thannot that they will be recovered. Deferred tax assets and liabilities are notdiscounted. Financial instruments Derivative financial instruments are used by the Group to hedge foreign currencyexchange rate risks. Under IAS 39 'Financial Instruments', forward foreignexchange contracts are stated in the balance sheet at fair value. The gain orloss on remeasurement to fair value is recognised immediately in profit or loss.However, where forward exchange contracts qualify for hedge accounting, theeffective part of any gain or loss is recognised directly in the hedgingreserve. Any ineffective portion of the hedge is recognised immediately in theincome statement. The associated cumulative gain or loss is removed from equityand recognised in the income statement in the same period or periods duringwhich the hedged forecast transaction affects profit or loss. When a hedging instrument expires or is sold, terminated or exercised, or theentity revokes designation of the hedge relationship but the hedged forecasttransaction is still expected to occur, the cumulative gain or loss at thatpoint remains in equity and is recognised in accordance with the above policywhen the transaction occurs. If the hedged transaction is no longer expected totake place, the cumulative unrealised gain or loss recognised in equity isrecognised in the income statement immediately. IAS 39 will be applied from 1st May 2005 as permitted under the transitionalarrangements of IFRS 1. Comparatives are presented under UK GAAP where gains andlosses on forward foreign exchange contracts treated as hedging instruments werenot recognised in the income statement. On realisation of the hedgedtransaction the unrecognised gains and losses arising on the instrument wererecognised in the income statement. 2. Dividends The directors do not propose the payment of an interim dividend. Half Year Ended Half Year Ended Year Ended 31st October 31st October 30th April 2005 2004 2005 £'000 £'000 £'000Equity dividends:Paid dividend (Year to April 2004: 11.806p per 0 0 (850)share)Proposed dividend (Year to April 2005: 13.889p 0 0 (1,000)per share) 3. Earnings per share The calculation of the earnings per ordinary share is calculated on the numberof ordinary shares in issue during both years of 7,200,000 and on the profitfor the period attributable to ordinary shareholders of £1,434,000 (31stOctober 2004 £1,141,000). The company has no share options or diluting earningsper share. 4. Financial Information The financial information for the six months ended 31st October 2005 and thecomparative figures for the six months ended 31st October 2004 have not beenaudited or reviewed. The summarised financial information in respect of theyear ended 30th April 2005 is not the Group's statutory accounts for thatfinancial year. Those accounts, which were prepared under UK GAAP, have beendelivered to the Registrar of Companies. The audit report was unqualified anddid not contain a statement under section 237(2) or section 237(3) of theCompanies Act 1985. APPENDIX 1 Reporting under International Financial Reporting Standards (IFRS) From 2005, Goodwin PLC will produce its consolidated report and accounts inaccordance with IFRS as adopted by the European Union. Previously the Groupreported under UK Generally Accepted Accounting Practice (UK GAAP). Thiscommentary highlights the key changes that have arisen due to the transitionfrom reporting under UK GAAP to reporting under IFRS. The Group's date oftransition to IFRS is 1st May 2004, which is the beginning of the comparativeperiod for the year ending 30th April 2006. Therefore the opening balance sheetfor IFRS purposes is that reported at 30th April 2004 as amended for changes dueto IFRS. This interim financial report is the first to be prepared under IFRS, whichresults in the comparative figures being prepared on the same basis and aretherefore restated from those previously reported under UK GAAP. To helpunderstand the impact of the transition, reconciliations have been produced toshow the changes made to statements previously reported under UK GAAP inarriving at the equivalent statements under IFRS. The following five unauditedreconciliations are included below. 1. Balance sheet at 1st May 2004 2. Income statement for the 6 months to 31st October 2004 3. Balance sheet at 31st October 2004 4. Income statement for the year to 30th April 2005 5. Balance sheet at 30th April 2005 The income statement for the six months to 31st October 2005 and the balancesheet at that date are reported under IFRS. As they have not previously beenreported under UK GAAP no reconciliation to IFRS is provided. Key accounting policy changes are included within the interim report. A fullset of IFRS accounting policies will be published in the Group's report andaccounts for the year to 30th April 2006. First time adoption IFRS1 'First Time Adoption of International Financial Reporting Standards' setsout the approach to be followed when IFRS are applied for the first time. IFRSaccounting policies are, in general, to be applied retrospectively althoughIFRS1 provides a number of exceptions to this general principle. The policychoices made under IFRS1 are mentioned under the relevant headings below: Goodwill Under UK GAAP, goodwill was amortised over its useful economic life. UnderIFRS3 'Business Combinations' goodwill is not amortised but is carried at costwith impairment reviews being undertaken annually or when there is an indicationthat the carrying value has been reduced. Under IFRS1 the Group has applied thechange from the date of transition as opposed to full application to allbusiness combinations prior to that date. Dividends Under UK GAAP proposed dividends were accrued at the balance sheet date althoughthere was no obligation to pay until formal approval by shareholders was grantedat the Annual General Meeting. Under IAS10 'Events after the Balance SheetDate', a liability should only be recognised once there is an obligation to pay.As a result the dividend will only be recognised once shareholders approve it. Treasury instruments The Group makes use of forward foreign exchange contracts to reduce the riskexposure to changes in foreign exchange rates. These contracts are designatedas part of a hedging relationship and hence where the hedge is shown to beeffective changes in fair value are accounted for in equity. The impact on the30th April 2005 balance sheet is to increase other debtors and net assets by£2,856,000 by creating a hedge reserve within equity. Foreign exchange In accordance with IAS21 'The effects of changes in foreign exchange rates',translation differences that arise in respect of foreign entities have beenreclassified as a separate component of equity from the date of transition, 1stMay 2004. The financial statements presented are unaudited and there is a possibility thatadjustments may be required before they are incorporated as part of the firstaudited annual report and accounts prepared under IFRS, which are due to bepublished in September 2006. The balance sheet reconciliations at 1st May 2004 (date of transition to IFRS)and at 30th April 2005 (date of last UK GAAP financial statements) and thereconciliation of profit for the period, as required by IFRS1 are shown below.The balance sheet reconciliation at 31st October 2004 and the reconciliation ofprofit for the six months to 31st October 2004 have also been included to enablea comparison of the 2005 interim figures with those published in thecorresponding period of the previous financial year. Appendix 1 Unaudited Balance Sheet Reconciliation as at 1st May 2004 UK GAAP* IAS 10 IFRS IFRS format Dividends £'000 £'000 £'000 Non Current AssetsIntangible Assets 160 160Property, Plant and Equipment 10,391 10,391Non Current Assets 10,551 0 10,551 Current AssetsInventories 7,339 7,339Trade and Other Receivables 9,602 9,602Cash 229 229Current Assets 17,170 0 17,170 Total Assets 27,721 0 27,721 Current LiabilitiesTrade and Other Current Payables 9,587 (850) 8,737Corporation Tax Liabilities 385 385Obligations under Finance Leases 414 414Bank Overdrafts 5,100 5,100Current Liabilities 15,486 (850) 14,636 Net Current Assets 1,684 850 2,534 Non Current LiabilitiesDeferred tax 940 940Obligations under Finance Leases 603 603Non Current Liabilities 1,543 0 1,543 Total Liabilities 17,029 (850) 16,179 Net Assets 10,692 850 11,542 EquityShare Capital 720 720Retained Earnings 9,785 850 10,635Equity Attributable to Equity Holders of Parent 10,505 850 11,355Minority Interests 187 187 Total Equity 10,692 850 11,542 * As published under UK GAAP reformatted for IFRS presentation Unaudited Income Statement Reconciliation - 6 Months to 31st October 2004 UK GAAP* IFRS3 IFRS IFRS format Goodwill £'000 £'000 £'000 Turnover - Continuing 20,462 20,462 Operating Profit before Finance Costs 1,930 1 1,931 Finance Costs (210) (210) Profit Before Tax 1,720 1 1,721 Tax Expense (562) (562) Profit for the Period 1,158 1 1,159 Attributable to: Equity Holders of the Parent 1140 1 1,141Minority Interest 18 18 1158 1 1,159 Unaudited Balance Sheet Reconciliation as at 31st October 2004 UK GAAP* IAS 10 IFRS3 IFRS IFRS format Dividends Goodwill £'000 £'000 £'000 £'000Non Current AssetsIntangible Assets 139 1 140Property, Plant and Equipment 10,670 10,670Non Current Assets 10,809 0 1 10,810 Current AssetsInventories 9,436 9,436Trade and Other Receivables 11,516 11,516Cash 242 242Current Assets 21,194 0 0 21,194 Total Assets 32,003 0 1 32,004 Current LiabilitiesTrade and Other Current Payables 10,193 (850) 9,343Income Tax Liabilities 519 519Obligations under Finance Leases 340 340Bank Overdrafts 7,662 7,662Current Liabilities 18,714 (850) 0 17,864 Net Current Assets 2,480 850 0 3,330 Non Current LiabilitiesDeferred tax 975 975Obligations under Finance Leases 464 464Non Current Liabilities 1,439 0 0 1,439 Total Liabilities 20,153 (850) 0 19,303 Net Assets 11,850 850 1 12,701 EquityShare Capital 720 720Retained Earnings 10,926 850 1 11,777Equity Attributable to Equity 11,646 850 1 12,497Holders of ParentMinority Interests 204 204 Total Equity 11,850 850 1 12,701 Unaudited Income Statement Reconciliation - 12 Months to 30th April 2005 UK GAAP* IFRS3 IFRS IFRS format Goodwill £'000 £'000 £'000 Turnover - Continuing 44,945 44,945 Operating Profit before Finance Costs 4,085 3 4,088 Finance Costs (553) (553) Profit Before Tax 3,532 3 3,535 Tax Expense (1,016) (1,016) Profit for the Period 2,516 3 2,519 Attributable to: Equity Holders of the Parent 2,474 3 2,477Minority Interest 42 42 2,516 3 2,519 Unaudited Balance Sheet Reconciliation as at 30th April 2005 UK GAAP* IAS 10 IFRS3 Reclassification IFRS IFRS format Dividends Goodwill £'000 £'000 £'000 £'000 £'000Non Current AssetsIntangible Assets 127 3 130Property, Plant and 10,920 10,920EquipmentNon Current Assets 11,047 0 3 0 11,050 Current AssetsInventories 10,004 10,004Trade and Other Receivables 9,743 9,743Cash 275 275Current Assets 20,022 0 0 0 20,022 Total Assets 31,069 0 3 0 31,072 Current LiabilitiesTrade and Other Current 15,459 (1,000) 14,459PayablesCorporation Tax Liabilities 635 635Obligations under Finance 315 315LeasesBank Overdrafts 945 945Current Liabilities 17,354 (1,000) 0 0 16,354 Net Current Assets 2,668 1,000 0 0 3,668 Non Current LiabilitiesProvisions for Liabilities 951 951and ChargesObligations under Finance 576 576LeasesNon Current Liabilities 1,527 0 0 0 1,527 Total Liabilities 18,881 (1,000) 0 0 17,881 Net Assets 12,188 1,000 3 0 13,191 EquityShare Capital 720 720Retained Earnings 11,239 1,000 3 20 12,262Overseas Subsidiaries 0 (20) (20)Translation ReserveEquity Attributable to 11,959 1,000 3 0 12,962Equity Holders of ParentMinority Interests 229 229 Total Equity 12,188 1,000 3 0 13,191 This information is provided by RNS The company news service from the London Stock Exchange