MOGP.L Regulatory News (MOGP)

Mountfield Group Plc

(the "Company" or the "Group")

Half-yearly report to 30 June 2016

Mountfield Group Plc , the AIM listed construction company specialising in supplying and installing raised access flooring and the construction, fitting out and refurbishing of data centres and commercial and residential buildings, announces its half-yearly report to 30 June 2016.

· Gross profit of £1m (H1 2015: £1.1m) on revenue of £4.9m (H1 2015: £7.3m).

· Group margins increased from 14.8% (in the first half of 2015) to 20.8%.

· Net profit before tax increased from £246k (in the first half of 2015) to £316k.

· Directors expect the performance to continue in the second half of the year.

· The business of Connaught Access Flooring Limited ("CAF" or "Connaught") continues to cement its position as a market leader.

· Mountfield Building Group Limited ("MBG") is now able to achieve sustainable profitability.

· Neither Company has seen a post-Brexit decline in business activity.

Andy Collins - Group CEO said:

"The results are particularly satisfying because they show that the Board's key objectives of establishing Connaught as a market leader in the raised access flooring market and positioning MBG on a path of sustainable profitability, have been met.

It is very encouraging that demand for the services of the Group Companies have not been reduced since the Brexit vote and the state of activity that we saw ahead of the vote has continued undiminished."

Chairman and CEO's Statement

The first half of the year saw an increase in the unaudited pre-tax profits of the Group from £245k to £316k and the Directors expect the improvement in net profits to continue in the second half of the year.

The Directors are satisfied that the market remains strong and they do not see any reduction in demand for the services of the Group companies following the Brexit vote.

CAF achieved a profit of £397k during the first half of 2016 (H1 2015: £321k). The key feature of the period was the completion of its £5m + contract for flooring at a new City HQ building. The successful completion of this contract has cemented its position as one of the very few companies able to undertake access flooring contracts of this nature. This is evidenced by the record volume of tenders for the supply and installation of raised access flooring for prestigious new developments in and around London. Conversion of even a small proportion of these tenders will provide a significant contribution to turnover over the next 2-3 years.

The smaller contract business of CAF also continues to perform well.

CAF has already begun to expand its management team to enable it to handle a larger and more varied workload and has appointed a marketing development director whose role will be to increase awareness of CAF and its businesses amongst main contractors, developers and architects.

MBG's net profits increased for the half-year from £46k in 2015 to £71k and the Directors now believe it is able to achieve sustainable profitability because of its reduced operating costs and altered business strategy. The Directors anticipate that the second half of the year will see an improvement to its net profit over that achieved in the first half of 2016.

MBG now primarily undertakes contracts of a low risk nature, direct for its clients in various areas of specialist construction including the construction of data centres, commercial and residential properties. This strategy together with the reduced overheads has enabled it to operate profitably.

Its remains the intention of the Group to extend its business activities and continue to explore acquisition opportunities in the market.

Condensed consolidated statement of comprehensive income

For the six months ended 30 June 2016

There are no recognized gains and losses other than those passing

through the Statement of Comprehensive Income

 Condensed consolidated statement of financial position

As at 30 June 2016

Condensed consolidated statement of changes in equity

For the six months ended 30 June 2016

Condensed consolidated cash flow statement

For the six months ended 30 June 2016

For the purposes of the cash flow statement, cash and cash equivalents comprise the following:

1.  Notes to the Interim Report

Basis of preparation

The Group's interim financial statements for the six months ended 30 June 2016 were authorised for issue by the directors on 19 September 2016.

The consolidated interim financial statements, which are unaudited, do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2015 have been filed with the registrar of companies at Companies House. The audit report on the statutory accounts for the year ended 31 December 2015 was unqualified and did not contain any statements under Section 498 (2) or (3) of the Companies Act 2006.

The annual financial statements of Mountfield Group Plc for the year ended 31 December 2016 will be prepared in accordance with International Financial Reporting Standards as adopted for use in the EU ("IFRS"). Accordingly, these interim financial statements have been prepared using accounting policies consistent with those which will be adopted by the Group in the financial statements and in compliance with IAS 34 "Interim financial reporting".

The consolidated interim financial statements have been prepared in accordance with the accounting policies set out in the annual financial statements for the year ended 31 December 2015.

Basis of consolidation

The Group financial information consolidates that of the company and its subsidiaries.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

2.  Segmental reporting

Segment information is presented in respect of the Group's business segments, which are based on the Group's management and internal reporting structure.

The chief operating decision-maker has been identified as the Board of Directors (the Board). The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Management have determined the operating segments based on these reports and on the internal report's structure.

Segment performance is evaluated by the Board based on revenue and profit before tax ("PBT"). Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis, such as centrally managed costs relating to individual segments and costs relating to land used in more than one individual segment.

Given that income taxes and certain corporate costs are managed on a centralised basis, these items are not allocated between operating segments for the purposes of the information presented to the Board and are accordingly omitted from the analysis below.

The Group comprises the following segments:

Mountfield

Direct contracting and trade contracting services to both main contractors and corporate end users.

Connaught

Providing raised flooring systems to both main contractors and corporate end users.

Land sourcing

Sourcing land and enhancing value.

Segmental operating performance

Business segments assets and liabilities

Unallocated assets consist of deferred tax, trade and other receivables and cash held by the Parent Company. Unallocated liabilities consist of trade and other payables and interest bearing loans owed by the Parent Company.

Revenue by geographical destination

Revenue is attributable to the United Kingdom and other EU markets.

Total assets including property, plant and equipment and intangible assets are all held in the UK.

3. Income tax (expense)/credit (continuing operations)

4.  Earnings per share

The basic earnings per share is calculated by dividing the earnings attributable to equity shareholders by the weighted average number of shares in issue. In calculating the diluted earnings per share, share options outstanding have been taken into account where the impact of these is dilutive.

The weighted average number of shares in the period was:

In the six months to 30 June 2016, the exercise price of the options and warrants exceeded the average market price of ordinary shares in the period, thus there is no dilutive effect on the weighted average number of ordinary shares or the diluted earnings per share.  

Earning attributable to equity shareholders of the parent