Tyman Regulatory News (TYMN)

TYMAN PLC

("Tyman" or the "Group" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2017

Tyman plc, a leading international supplier of engineered components to the door and window industry, announces unaudited interim results for the six months ended 30 June 2017.

Financial highlights

(1) CC LFL = Constant Currency Like for Like (see Alternative Performance Measures on page 41)

(2) H1 2016 comparatives for Underlying Profit before Taxation and Underlying EPS have been restated (see Alternative Performance Measures on page 41)

(3) Pro forma Leverage comparator is the Leverage on 1 July 2016, the date of completion of the Bilco acquisition

Statutory financial highlights

Business highlights

· Solid underlying trading performance against a relatively strong comparator period and in line with expectations

· Synergy expectations for the Giesse acquisition increased by 50 per cent. to €6.0 million by March 2018

· Continued strong cash generation and year on year deleveraging

· Indications of input cost inflation moderating during the second quarter

· North American and International markets remain positive, UK more subdued

· Well positioned for further progress in the second half

Louis Eperjesi, Chief Executive, commented:

"In the first half, Tyman has delivered a solid trading performance against a relatively strong comparator period and made further progress in the integration of the businesses acquired in 2016 and 2017. As a consequence, we are now in a position to raise the cumulative synergy guidance for the Giesse acquisition by 50 per cent. to €6.0 million by March 2018.

"North American markets showed modest growth in the period with Canadian markets improving and, while UK markets remain relatively subdued, there continues to be consistent and sustained growth in Continental Europe.

"Trading across the Group continues to be in line with management expectations with good cash generation. Tyman is well positioned for further progress in the second half."

Tyman will host an analyst and investor presentation at 09h30 a.m. today, Tuesday 25 July 2017, at the offices of MHP Communications, 6 Agar Street, London, WC2N 4HN.

The presentation will be webcast at the Group's website - www.tymanplc.com - and the audio conference call details are set out below.

Conference Call Dial In Details

Forthcoming dates

Notes to editors

Tyman plc is a leading international supplier of engineered components to the door and window industry. The Group's three Divisions - AmesburyTruth, ERA and Schlegel International - are market leaders in their respective geographies.

The Group employs over 3,500 people and operates facilities in 19 countries worldwide. Tyman is listed on the London Stock Exchange under the ticker TYMN.

Further information on the Group and the Group's products are available at the Group's website - www.tymanplc.com.

results overview

Tyman delivered a solid trading performance in the first half against a relatively strong comparator period and made further progress in the integration of the businesses acquired in 2016 and 2017. Trading across the Group continues to be in line with management expectations with good cash generation.

North American markets showed modest growth in the period with Canadian markets improving and, while UK markets remain relatively subdued, there continues to be consistent and sustained growth in Continental Europe.

Revenue recorded in the period was £260.4 million (H1 2016: £201.0 million) an increase of 29.5 per cent. on a reported basis and 2.0 per cent. on a constant currency, like for like basis, with the difference due to the relative weakness of Sterling compared with H1 2016 and contributions from acquisitions.

Underlying Operating Profit increased to £35.5 million (H1 2016: £27.2 million), an increase of 30.6 per cent. on a reported basis and 3.9 per cent. on a constant currency, like for like basis. The Group's Underlying Operating Margin increased slightly to 13.6 per cent. (H1 2016: 13.5 per cent.), despite the dilutive impact of the lower margin Bilco business, with the constant currency like for like Underlying Operating Margin increasing by 20 bps.

During the period, ERA completed the acquisition of Howe Green and responsibility for Bilco UK was transferred to ERA as part of the development of a meaningful commercial offering for the UK market.

Synergy benefits were recorded from both the Bilco and Giesse acquisitions and the Group has increased the targeted cumulative synergies for the Giesse acquisition by 50 per cent. to €6.0 million over the two years to March 2018. These increased synergies will more than offset the reduced savings expected to be derived in 2017 from the North American footprint consolidation project. AmesburyTruth remains committed to the targeted savings from this project of US$10.0 million from 2020.

Input costs increased in most of the Group's markets in the first quarter; with some signs of input cost inflation moderating during the second quarter. The consequent impact on profitability continues to be managed proactively through a combination of effective purchasing, price management and cost reduction programmes.

Operational cash generation was strong in the period, in part due to the Group's 2017 capital investment programme being more weighted towards the second half of the year. Operating Cash Conversion in the twelve months to 30 June 2017 was 99.3 per cent. (LTM to H1 2016: 96.9 per cent.).

Leverage at the period end was 2.05x (H1 2016: 1.81x) which compares favourably with the pro forma Leverage of 2.35x at 1 July 2016, the date the Bilco acquisition completed; and demonstrates the cash generative nature of the Group's businesses. Leverage is projected to reduce over the second half of the year to within the Group's year end target range of 1.5x to 2.0x.

An interim dividend for the 2017 year of 3.50 pence per share (H1 2016: 3.00 pence per share) will be paid on 7 September 2017 to shareholders on the register at close of business on 4 August 2017.

Board Changes

A number of changes to the Board composition and roles took place in the first half of the year. Jamie Pike stepped down as Non-executive Chairman of the Group following the conclusion of the 2017 Annual General Meeting and Martin Towers succeeded him as Non-executive Chairman. Helen Clatworthy became Chair of the audit committee from the same date.

Following a review of the Executive Directors' roles, with effect from 1 August 2017, James Brotherton will take Board responsibility for Group strategy, corporate development and M&A in addition to his existing duties as Chief Financial Officer. In light of his additional responsibilities, his salary will be increased from this date. At the increased level his salary will be around the median salary of Chief Financial Officers for companies of similar size and complexity to Tyman. Full details of his revised remuneration package are set out at the Group's website, www.tymanplc.com.

Outlook

AmesburyTruth expects trading in US residential will remain consistent over the balance of the year with modest growth in both new build and repair and remodelling markets. Further growth is forecast in US commercial in the second half and AmesburyTruth will benefit from its broader commercial product offering. The improving market and business performance in Canada is expected to continue in the second half.

ERA expects the relatively weak residential UK RMI market conditions will persist over the balance of the year with the overall UK residential market remaining flat to down. While cost inflation pressures are not expected to be as severe as they were in the second half of 2016, ERA will not have the benefit of the currency hedges that were put in place prior to the EU Referendum last year and raw material costs are still much higher than they were at H1 2016. The Underlying Operating Margin for the full year for the ERA Division is therefore expected to remain lower than in 2016.

Schlegel International expects to see further growth in EMEAI across the balance of year with Continental Europe continuing to improve and Middle East Revenue being more weighted towards the second half. Asia Pacific markets, other than Australia, are expected to remain stable; however Latin American markets will stay challenging. Profitability in Schlegel International will benefit from the increased levels of synergies generated as the integration of Giesse concludes.

The Board continues to review opportunities to fill the gaps in Tyman's product portfolio and geographical coverage through cross selling of the product range, new product development and value adding acquisitions. The Group is well positioned to make further progress across the balance of the year, particularly in North American and International markets, and continues to trade in line with expectations with good cash generation.

OPERATIONAL REVIEW

AmesburyTruth

Markets

US residential new build permits for single family homes fell back slightly while starts grew in the first half of the year and completions remained strong. Multi family buildings, in which the Division has proportionally lower exposure, has continued to weaken with starts down approximately 13.0 per cent. year on year.

Residential repair and remodelling markets in the US were slightly improved in the first quarter with the NAHB RMI index averaging 58 compared with 54 in Q1 2016; however this index fell back in the second quarter to 55. The LIRA index improved by 2.8 per cent. from the year end.

US commercial markets remain positive with total construction put in place increasing by 1.0 per cent. in the period (H1 2016: 0.1 per cent.) and the Dodge Momentum Index at 30 June 2017 some 11.8 per cent. higher than a year ago.

The market in Canada is showing sustained improvement and single family housing starts at the half year were approximately 13.5 per cent. higher than at H1 2016. Multi family starts are broadly in line with this time last year.

Business Performance and Developments

AmesburyTruth's like for like US Dollar Revenue was broadly flat with the North American residential business trading in line with 2016 throughout the period. Reported US Dollar Revenue increased by 15.0 per cent. due to the six month contribution from Bilco. Reported Revenue benefitted from the relative strength of the US Dollar against Sterling compared with H1 2016. At the half year, like for like order books were 5.6 per cent. ahead of the prior year.

Like for like US Dollar Revenue generated in the US in the period was slightly behind the same period last year, reflecting general market conditions and the required ramp up of window balance production to target levels in the first quarter. Like for like Canadian Revenue increased by approximately 10.4 per cent., due to the recovering market and some customer and product wins. Bilco's US Dollar Revenue in the period was slightly ahead of 2016 with a good performance in commercial. In residential, Bilco saw the slower trading recorded in H2 2016 sustained into the first quarter, although trading picked up in the second quarter.

US Dollar Underlying Operating Profit increased by 10.4 per cent. to US$34.5 million with, as expected, the Division's Underlying Operating Margin in the period somewhat diluted by the lower margin of the Bilco business.

Tier three and four account coverage

In June, the Division transferred its tier three and four account coverage to a national sales representative network. Previously tier three and four coverage was managed through State or Regional representatives, which led to some inconsistencies in service depending on location. This is the first stage in the development of a differentiated approach to service and distribution of product for AmesburyTruth's smaller customers.

Footprint consolidation project

The North American footprint consolidation project is on schedule. During the first half, the Canton, South Dakota site closed with the freehold sold to a third party and the Sioux Falls, South Dakota site was returned to the landlord. Net cash proceeds received from these two site closures totalled US$2.1 million. Construction of the new facility in Statesville, North Carolina is well advanced and AmesburyTruth expects to start production there during the fourth quarter.

The Juarez, Mexico facility is operating at target production levels after a longer than predicted ramp up of window balance production through 2016 and through the first half of 2017. The new facility in Sioux Falls, South Dakota was completed in the first quarter and is operating as expected.

While AmesburyTruth remains committed to the US$10.0 million of cumulative P&L savings from the footprint consolidation project from 2020, the delay in meeting Mexican target production levels in H1 2017 means that 2017 savings are likely to be between US$0.5 and US$1.0 million; with the shortfall being made up in future years.

Bilco Integration

The integration of Bilco has seen encouraging progress made in the areas of freight, procurement, HR and warehousing. In the first half US$0.8 million of cost and revenue synergies were recorded in respect of the Bilco integration. The Division is on course to deliver the targeted US$2.5 million run rate of cost and revenue synergies by the end of 2017.

Outlook

AmesburyTruth expects trading in US residential will remain consistent over the balance of the year with modest growth in both new build and repair and remodelling markets. Further growth is forecast in US commercial in the second half and the Division will benefit from its broader commercial product offering. The improving market and business performance in Canada is expected to continue in the second half.

ERA

Markets

As expected the UK market remained relatively subdued in the first half of the year. New build has continued to strengthen; however RMI investment, which comprises the substantial majority of the market, was lower than in the first half of 2016.

Business performance and developments

ERA's like for like Revenue improved by 4.6 per cent. with the increase principally due to pricing and surcharge actions more than offsetting slight volume decreases. On a reported basis, Revenue increased by 12.7 per cent.; due to the incremental contributions from Bilco UK and Howe Green. Like for like order books excluding Response across the Division were 8.1 per cent. higher at the half year compared with H1 2016, principally due to the impact of pricing.

As expected, like for like Underlying Operating margins in ERA were lower than in the first half of 2016 reflecting the impact of exchange on imported products and increases in underlying raw material costs; partially offset by the pricing and surcharge actions taken in the second half of 2016. On a reported basis, Underlying Operating Profit was slightly behind 2016.

Distribution and OEM

ERA made further progress in the distribution sector with further new listings secured in both the UK and Ireland. Despite the tougher market, volumes were only slightly down in OEM with sustained strong performance from bifold hardware and encouraging take up of new product introductions. An increasing number of sales are being made through the Division's web portal "ERA Everywhere" which was launched at the end of 2016.

Howe Green and Bilco UK

During the period, ERA assumed responsibility for both the Howe Green and Bilco UK businesses. Accordingly ERA's results for the period include the post acquisition contribution from Howe Green and a full six month contribution from Bilco UK. The two businesses performed encouragingly in the first half of the year and have a promising pipeline of opportunities for the second half. In aggregate, Bilco UK and Howe Green contributed £3.0 million to the Division's Revenue in the period.

Ventrolla

Ventrolla, the Division's sash window refurbishment business, completed its move to new premises in Harrogate during March 2017 which will allow the business to increase its output of new timber window frames. Revenue in the period was in line with the prior year with stronger demand for commercial projects offsetting lower demand for domestic renovations.

New Facility

Construction of the Division's new facility in the West Midlands is proceeding to plan. The Division will start to occupy the premises in the fourth quarter of the year with full occupancy scheduled for the start of 2018. Three existing facilities in the West Midlands will close once the move to the new site has completed.

Outlook

ERA expects the relatively weak residential RMI market conditions will persist over the balance of the year with the overall residential market remaining flat to down.

While cost inflation pressures are not expected to be as severe as they were in the second half of 2016, ERA will not have the benefit of the currency hedges that were put in place prior to the EU Referendum last year and raw material costs are still much higher than they were at H1 2016. The Underlying Operating Margin for the full year for the ERA Division is therefore expected to remain lower than in 2016.

SCHLEGEL INTERNATIONAL

Markets

In EMEAI, markets in Continental Europe have continued their gradual recovery with most countries showing sustained period on period growth. Markets in the Middle East remain positive.

Chinese construction markets are still to expanding, albeit at a slower pace than in recent years, and most other Asia Pacific markets showed some growth, with the exception of Australia. The challenging market environments encountered in Brazil and Argentina last year have persisted but not deteriorated further in 2017.

Business performance and developments

Schlegel International's constant currency like for like Revenue improved by 7.4 per cent. with the increase principally due to pricing actions supported by slightly higher volumes. On a reported basis, Revenue increased by 39.8 per cent.; due to exchange translation benefits and consolidation of Giesse's performance for the full six month period. Order books across the Division at the half year were in line with H1 2016 other than in China where the route to market was changed last year and the order book is lower as a consequence.

Underlying Operating Profit increased by 90.2 per cent. and Underlying Operating Margins in Schlegel International expanded to 11.6 per cent. (H1 2016: 8.6 per cent.), reflecting the benefits of the Giesse acquisition and swift progress made on integration, as the Division continues to make good progress towards its medium term Underlying Operating Margin target of 15 per cent..

EMEAI

Performance in Continental Europe was encouraging; particularly in Russia, Spain and Turkey and the business took further market share in India. Despite generally positive markets, Revenue in the Middle East was lower than in H1 2016 due to distribution customers running down existing inventories. The Division expects to see an improved second half in the Middle East.

China and Asia Pacific

There was good performance, particularly from hardware products, in most Asia Pacific markets. As expected, Revenue in China was in line with H1 2016, following the changes made to the route to market last year. Revenue in Australasia was ahead of H1 2016 principally due to a strong performance in New Zealand; with Australia, other than New South Wales, fairly subdued.

Latin America

Revenue in Latin America was lower than H1 2016 as a consequence of the poor market conditions; however the business is profitable, cash generative and makes operating margins in line with the rest of the Division.

Giesse Integration

Integration initiatives have continued within Schlegel International. The Division's integrated European salesforce started operating from the turn of the year and progress to date has been encouraging with early cross selling orders secured from both Schlegel and Giesse customers. Sales of Giesse product into the other two Divisions increased in the period and there is a good level of interest in the Giesse product range from other Group customers.

During the period there were a number of changes made to the Division's commercial structures with new general managers appointed for the Australasia, China, and Middle East businesses and a new Divisional CFO recruited.

In the second half the Division plans to consolidate the two Giesse facilities in Bologna, Italy onto the larger manufacturing site, retaining an offsite logistics warehouse for the storage and despatch of finished goods.

In 2017 to date €2.4 million of synergies have been realised, bringing the aggregate synergies delivered from the integration of Giesse since acquisition to approximately €4.8 million. Schlegel International expects that the total synergy benefits to be delivered from the Giesse acquisition by March 2018 will be not less than €6.0 million; an increase of 50 per cent. over the original target set out at the time of the acquisition.

Outlook

Schlegel International expects to see further growth in EMEAI across the balance of the year with Continental Europe continuing to improve and Middle East Revenue being more weighted towards the second half. Asia Pacific markets, other than Australia, are expected to remain stable; however Latin American markets will stay challenging. Profitability in Schlegel International will benefit from the increased levels of synergies generated as the integration of Giesse concludes.

FINANCIAL REVIEW

INCOME STATEMENT

Revenue and profit

Reported Group Revenue in the period increased by 29.5 per cent. to £260.4 million (H1 2016: £201.0 million). On a constant currency, like for like basis, Group Revenue increased by 2.0 per cent. period on period.

Underlying Administrative Expenses increased to £60.8 million (H1 2016: £44.9 million), reflecting the enlarged size and geographic reach of the Group. Corporate costs in the period were well controlled at £3.8 million (H1 2016: £3.7 million).

Underlying Operating Profit increased by 30.6 per cent. to £35.5 million (H1 2016: £27.2 million) and by 3.9 per cent. on a constant currency like for like basis. Pricing actions and favourable exchange rate movements increased Underlying Operating Profit by £4.1 million and £4.4 million respectively. These were partially offset by higher input costs and other inflationary increases of £5.4 million. The Group's Underlying Operating Margin increased by 10 bps to 13.6 per cent. (H1 2016: 13.5 per cent.).

Underlying Profit before Taxation increased by 31.6 per cent. to £31.4 million (H1 2016 restated: £23.8 million) and by 4.2 per cent. on a constant currency like for like basis. Reported Profit before Taxation increased by 129.5 per cent. to £17.8 million (H1 2016: £7.8 million).

Materials and input costs

(1) FY 2016 materials cost of sales for raw materials, components and hardware for overall category

(2) Average LTM 2017 tracker price compared with average LTM 2016 tracker price at 30 June

(3) Spot tracker price as at 30 June 2017 compared with spot tracker price at 31 December 2016

Raw material costs increased in H1 2017 with average prices across all commodity categories higher than H1 2016. At the period end, most commodities were more expensive on a spot basis compared with 31 December 2016 confirming the Group's view that commodity cycles have turned with input costs mainly trending upwards. There were some signs of input cost inflation moderating during the second quarter.

Exceptional items

As announced in March 2015 and reported in previous periods, footprint restructuring principally relates to directly attributable costs incurred in the ongoing North American footprint project. Gross costs attributable to footprint restructuring in the period amounted to £2.0 million. Against this has been credited £1.0 million of profit realised on disposal of the Canton, South Dakota facility and £0.8 million of proceeds received from the exit from the Sioux Falls, South Dakota facility. The North American footprint project is expected to conclude by 2020.

M&A and integration costs of £0.7 million relate to legal, financial, taxation and consultancy costs associated with the Howe Green acquisition and the integration of the businesses acquired in the 2016 and 2017 years.

Write-off of inventory fair value adjustments in H1 2016 is a non cash adjustment relating to the IFRS 3 requirement that finished goods held in inventory must be revalued to their market value on acquisition. The equivalent revaluation for Howe Green inventory acquired in March 2017 was immaterial.

Profit on disposal of business relates to the net deferred consideration for EWS received in H1 2016.

These items are regarded by the Group as exceptional as they are significant and non-recurring in nature.

Finance costs

Net finance costs increased to £4.9 million (H1 2016: £2.9 million) and Underlying net finance costs increased by £0.8 million to £4.1 million (H1 2016: £3.3 million).

Interest payable on bank loans, private placement notes and overdrafts increased to £4.0 million (H1 2016: £3.4 million) reflecting additional finance charges incurred on higher drawdowns.

Non-cash movements charged to net finance costs in the period include amortisation of capitalised borrowing costs of £0.2 million (H1 2016: £0.2 million), a loss on the revaluation of fair value currency hedges of £0.6 million (2016: gain of £0.7 million), and pension interest cost of £0.2 million (H1 2016: £0.2 million).

Income from short term bank deposits decreased to £0.1 million (H1 2016: £0.2 million).

Taxation

The Group reported an income tax charge of £6.1 million (H1 2016: £2.5 million), comprising a current tax charge of £7.7 million (H1 2016: £3.5 million) and a deferred tax credit of £1.6 million (H1 2016: £1.0 million).

The Underlying tax charge was £9.9 million (H1 2016 restated: £7.5 million) representing an effective Underlying tax rate of 31.7 per cent. (H1 2016 restated: 31.3 per cent.). This is the Group's current best estimate of the Underlying tax rate for the 2017 full year.

During the period, the Group paid corporation tax of £11.2 million (H1 2016: £4.4 million) with the increased level of US taxation payments on account.

Earnings per share

Basic Earnings Per Share increased by 112.6 per cent. to 6.65 pence (H1 2016: 3.13 pence). Underlying Earnings Per Share increased by 24.8 per cent. to 12.09 pence (H1 2016 restated: 9.69 pence). There is no material difference between these calculations and the fully Diluted Earnings Per Share calculations.

CASH GENERATION, FUNDING AND LIQUIDITY

Cash and cash conversion

Operational Cash Flow in the period increased by 23.6 per cent. to £19.2 million (H1 2016: £15.5 million). This is after adding back £2.5 million (H1 2016: £4.3 million) of exceptional costs cash settled in the period, £0.2 million of which were accrued in prior periods. Free cash flow in the period was £1.2 million (H1 2016: £3.8 million) and was impacted by the increased level of US taxation payments on account.

Operating Cash Conversion in the twelve months to 30 June 2017 remained strong at 99.3 per cent. (LTM to H1 2016: 96.9 per cent.) in part due to the Group's 2017 capital investment programme being weighted towards the second half of the year.

Liquidity

At 30 June 2017 the Group had gross outstanding borrowings of £224.7 million (H1 2016: £250.5 million), cash balances of £34.3 million (H1 2016: £105.6 million) and committed but undrawn facilities of £34.9 million (H1 2016: £14.5 million) as well as potential access to the uncommitted £60.0 million accordion facility.

Underlying Net Debt at the period end was £190.4 million (H1 2016: £144.9 million). Under IFRS, which reduces gross debt by the unamortised portion of finance arrangement fees, net debt at 30 June 2017 was £189.5 million (H1 2016: £143.5 million).

Covenant performance

Calculated covenant performance consistent with the Group's banking covenant test

At the half year, the Group retained significant headroom on its banking covenants. Leverage at the period end was 2.05x which compares favourably with the pro forma Leverage of 2.35x at 1 July 2016, the date the Bilco acquisition completed, and the Group's Interest Cover was 0.61x higher than H1 2016.

BALANCE SHEET - ASSETS AND LIABILITIES

Working capital

(1) The fair value of working capital items assumed at the acquisition date less IFRS 3 exceptional inventory fair value adjustments

At the half year trade working capital, net of provisions, was £106.1 million (H1 2016: £94.2 million; FY 2016 restated: £88.6 million). The trade working capital build to the half year at average exchange rates was £19.8 million (H1 2016 restated: £14.1 million) which is towards the top end of the Group's target build range coming into 2017. A significant proportion of the trade working capital is expected to unwind over the balance of the year. The inventory build to the half year at average exchange rates was £11.9 million (H1 2016 restated: £9.7 million).

Trade working capital at the half year was £106.1 million (H1 2016: £94.2 million). Of the year on year increase, £11.0 million related to acquisitions and £1.1 million related to exchange.

Capital expenditure

Gross capital expenditure decreased to £6.2 million (H1 2016: £9.0 million) or 0.91x depreciation (H1 2016: 1.73x), owing to the Group's 2017 capital investment programme being more weighted towards the second half of the year. Intangible asset capital expenditure decreased to £0.4 million (H1 2016: £1.4 million), principally due to the conclusion of the AmesburyTruth ERP project in Q4 2016.

BALANCE SHEET - EQUITY

Employee Benefit Trust purchases

At 30 June 2017, the EB Trust held 779,746 shares (H1 2016: 989,780). On 9 March 2017, the EB Trust purchased 267,752 shares in Tyman plc at a total cost of £0.8 million to satisfy certain share awards vested in March 2017 as well as future obligations under the Group's various share plans.

Dividend

The interim dividend for the 2017 year of 3.50 pence per share (H1 2016: 3.00 pence per share) will be paid on 7 September 2017 to shareholders on the register at close of business on 4 August 2017.

OTHER FINANCIAL MATTERS

Returns on Acquisition Investment

See Alternative Performance Measures on page 41

Giesse has made a significant contribution to the Group since its acquisition in March 2016 and is already exceeding the target return threshold.

At 30 June 2017, Bilco has been owned by the Group for twelve months. Synergy benefits from the Bilco acquisition are starting to come through with US$0.8 million recorded in H1 2017 and the ROAI is expected to increase further over the next twelve months towards the target return threshold.

Howe Green has been owned by the Group for four months at the interim reporting date and has performed encouragingly in the period under ownership.

Currency

Currency in the consolidated income statement

The principal foreign currencies that impact the Group's results are the US Dollar, the Euro, the Australian Dollar and the Canadian Dollar. In 2017 to date each of these currencies was materially stronger against Sterling when compared with the prevailing average exchange rates in H1 2016.

Translational exposure

(1) Impact of other currencies is immaterial

(2) Underlying Operating Profit impact

(3) Defined as the approximate favourable translation impact of a 1c decrease in the Sterling exchange rate of the respective currency on the Group's Underlying Operating Profit

The net effect of currency translation caused Revenue and Underlying Operating Profit from ongoing operations to increase by £23.9 million and £3.9 million respectively compared with H1 2016. This result is driven by the enlarged size of the Group as well as the depreciation of Sterling compared with a number of major currencies since June 2016.

Transactional exposure

In the LTM to June 2017, the negative transactional impact of the weakness in Sterling against the US Dollar and Renminbi on the reported profits of the ERA Division was approximately £1.8 million, offset only slightly by hedging.

The Group's other transactional exposures generally benefit from the existence of natural hedges and are immaterial.

Alternative Performance Measures

A detailed description of the APMs used by the Group is included on page 128 of the 2016 Report and Accounts. The H1 2017 APMs have been consistently applied and calculated with the equivalent calculations made at H1 2016 other than the calculation of Underlying Interest which, as disclosed in the 2016 Report and Accounts, now excludes gains and losses on fair value of derivative financial instruments. The H1 2016 comparatives have been restated to reflect this amendment to the Underlying Interest APM. Summary definitions of APMs used in this document are on page 41.

Reconciliation of reported Profit before taxation to the Underlying Profit after taxation APM:

(1) H1 2016 comparatives restated

(2) Tax effect of exceptional items, amortisation of borrowing costs, amortisation of acquired intangible assets, impairment of acquired intangible assets, gain or loss on revaluation of fair value hedge and unwinding of discount on provisions

Underlying profit and earnings per share measures provide additional useful information to shareholders on the underlying performance of the business. These measures are consistent with how business performance is measured internally by the Group. Underlying profit is not recognised under IFRS and may not be comparable with underlying profit measures used by other companies. APMs are not intended to be superior to or a substitute for GAAP measures.

2017 Summary guidance

Summary guidance for the year remains unchanged from that given at the time of the 2016 full year results other than the following areas:

The Underlying tax rate for Tyman in 2017 is expected to be c. 31.0 - 32.0 per cent. reflecting an Underlying tax rate of 31.7 per cent. used in the interim financial statements. The Underlying tax rate for the year will principally depend on the Group's final geographical mix of taxable profits. 2017 cash taxation rates are still expected to be slightly lower than the Group's 2017 Underlying tax rate.

Trade working capital peak to trough to the year end is expected to be between £12.5 million and £17.5 million.

Incremental synergy benefits are estimated at c. US$2.0 million (US$2.5 million run rate) by the year end from the integration of Bilco and c. €3.4 million delivered during the year from the integration of Giesse. The North American footprint project is now expected to deliver c. US$0.5 - US$1.0 million of incremental benefit during the year.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group's principal risks and uncertainties are identified on page 31 of the Group's Report and Accounts for the year ended 31 December 2016, which is available at the Group's website. In the opinion of the Directors, the principal risks and uncertainties remain as set out in the 2016 Report and Accounts.

25 July 2017

Tyman plc

Condensed consolidated income statement

1 Before amortisation of acquired intangible assets, deferred taxation on amortisation of acquired intangible assets, impairment of goodwill, exceptional items, unwinding of discount on provisions, gains and losses on the fair value of derivative financial instruments, amortisation of borrowing costs and the associated tax effect. See definitions on page 41 for non-GAAP alternative performance measures.

The notes on pages 25 to 37 are an integral part of these condensed consolidated financial statements.

Tyman plc

Condensed consolidated statement of comprehensive income

1 Restated for fair value adjustments made in respect of business combinations completed in the 2016 financial year. See note 13.2.

Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in note 6.

The notes on pages 25 to 37 are an integral part of these condensed consolidated financial statements.

Tyman plc

Condensed consolidated statement of changes in equity

1 Other reserves are non-distributable capital reserves which arose on previous acquisitions.

2 Share-based payments include a deferred tax debit of £Nil (six months ended 30 June 2016: £Nil; year ended 31 December 2016: £0.3 million) and a release of the deferred share-based payment bonus accrual of £0.4 million (six months ended 30 June 2016: £0.2 million; year ended 31 December 2016: £0.2 million).

3 On 21 June 2016, the Group issued 8,478,128 shares by way of a placing with institutional investors.

4 Restated for fair value adjustments made in respect of business combinations completed in the 2016 financial year. See note 13.2.

The notes on pages 25 to 37 are an integral part of these condensed consolidated financial statements.

Tyman plc

Condensed consolidated balance sheet

1 Restated for fair value adjustments made in respect of business combinations completed in the 2016 financial year. See note 13.2.

The notes on pages 25 to 37 are an integral part of these condensed consolidated financial statements.

Tyman plc

Condensed consolidated cash flow statement

The notes on pages 25 to 37 are an integral part of these condensed consolidated financial statements.

Tyman plc

Notes to the condensed consolidated financial statements

1. General information

Tyman and its subsidiaries is a leading international manufacturer and supplier of engineered components to the door and window industry.

Tyman is a public limited company listed on the London Stock Exchange, incorporated and domiciled in England and Wales. The address of the Company's registered office is 29 Queen Anne's Gate, London, SW1H 9BU.

These Interim Financial Statements were approved for issue on 25 July 2017.

These Interim Financial Statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016 were approved by the Board of Directors on 8 March 2017 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

These Interim Financial Statements have been reviewed, not audited.

The financial information for the year ended 31 December 2016 is extracted from the Group's consolidated financial statements for that year apart from any restatements made for fair value adjustments in respect of business combinations completed in the 2016 financial year (see note 13.2).

2. Accounting policies and basis of preparation

2.1 Basis of preparation

The Interim Financial Statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. The Interim Financial Statements should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

2.2 Changes in accounting policies and disclosures

2.2.1 New, revised and amended EU endorsed accounting standards

There were no new or amended accounting standards relevant to the Group's results that are effective for the first time in 2017 that have a material impact on the Group's consolidated financial statements.

2. Accounting policies and basis of preparation (continued)

2.2.2 New, revised and amended accountings standards not yet effective

The following standards issued by the IASB have not yet been adopted by the Group:

· IFRS 9 - Financial instruments (effective in the year beginning 1 January 2018);

· IFRS 15 - Revenue from contracts with customers (effective in the year beginning 1 January 2018); and

· IFRS 16 - Leases (effective in the year beginning 1 January 2019), subject to EU endorsement.

The Group has commenced an initial assessment of the impact of these standards on the consolidated financial statements.

The adoption of IFRS 9 and IFRS 15 are not expected to have a material impact on the financial statements of the Group in future periods.

The adoption of IFRS 16 is expected to have a relatively significant impact on the Group's reported results and balance sheet. The Group is conducting an assessment of the likely impact of IFRS 16 on the Group's reported results and expects to report on this at the time of the full year results in March 2018.

Until the assessments of the above standards are completed, no reliable estimate of the impact on the financial statements will be disclosed.

2.3 Going concern

The Directors are confident, based on current financial projections and the banking facilities available to the Group, and after considering sensitivities, that the Company and the Group have sufficient resources for their operational needs that will enable the Group to remain in compliance with its financial covenants in its bank facilities for at least the next twelve months. Accordingly, the Directors continue to adopt the going concern basis in preparing the Interim Financial Statements.

2.4 Accounting policies

The accounting policies adopted are consistent with those of the previous financial year. Taxes on income in the interim periods are accrued using tax rates that would be applicable to expected total annual profit or loss.

2.5 Accounting judgements and estimates

The preparation of financial statements requires management to exercise judgement in applying the Group's accounting policies. It also requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Actual amounts may differ from these estimates.

In preparing these Interim Financial Statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 December 2016. There have been no changes in significant estimates.

3. Segment reporting

The reporting segments reflect the manner in which performance is evaluated and resources are allocated. The Group operates through three clearly defined divisions: AmesburyTruth, ERA and Schlegel International.

AmesburyTruth comprises all the Group's operations within the US, Canada and Mexico. ERA comprises the Group's UK and Ireland hardware business, together with Ventrolla and Tyman Sourcing Asia. During the period, ERA assumed responsibility for the Howe Green and Bilco UK businesses and these businesses are now included in the ERA reporting segment with the 2016 full year comparatives restated for the AmesburyTruth and ERA segments. Schlegel International comprises all the Group's other businesses outside of the US, Canada and Mexico as well as two UK seal manufacturing plants.

Centrally incurred functional costs that are directly attributable to a division are allocated or recharged to that division. All other centrally incurred costs and eliminations are disclosed as a separate line item in the segment analysis.

Each reporting segment broadly represents the Group's geographical focus, being the North American, UK and international operations respectively. In the opinion of the Board, there are no material differences between the Group's operating segments and segments based on geographical splits. Accordingly, the Board does not consider geographically defined segments to be reportable. For completeness, the Group discloses certain operating data for business carried on in the UK that is not accounted for in the ERA Division in note 3.1.

The following tables present Group revenue and profit information for the Group's reporting segments, which have been generated using the Group accounting policies, with no differences in measurement applied, other than those noted above.

3.1 Revenue

Included within the Schlegel International segment is revenue attributable to the UK of £9.7 million (six months ended 30 June 2016: £8.4 million; year ended 31 December 2016 restated: £18.2 million).

3. Segment reporting (continued)

3.2 Profit before taxation

4. Exceptional items

Footprint restructuring

As announced in March 2015 and reported in previous periods, footprint restructuring principally relates to directly attributable costs incurred in the ongoing North American footprint project. Gross costs attributable to footprint restructuring in the period amounted to £2.0 million. Against this has been credited £1.0 million of profit realised on disposal of the Canton, South Dakota facility and £0.8 million of proceeds received from the exit from the Sioux Falls, South Dakota facility. The North American footprint project is expected to conclude by 2020.

M&A and integration

M&A and integration costs of £0.7 million relate to legal, financial, taxation and consultancy costs associated with the Howe Green acquisition and the integration of businesses acquired in the 2016 and 2017 years.

Write-off of inventory fair value adjustments

Write-off of inventory fair value adjustments in H1 2016 is a non cash adjustment relating to the IFRS 3 requirement that finished goods held in inventory must be revalued to their market value on acquisition. The equivalent revaluation for Howe Green inventory acquired in March 2017 was immaterial.

4. Exceptional items (continued)

Profit on disposal of business

The profit on disposal of business relates to the net deferred consideration for EWS received in H1 2016.

Property provision releases and disposals

The property provision releases and disposals comprises surplus onerous lease provisions released during the 2016 year.

These items are regarded by the Group as exceptional as they are significant and non-recurring in nature.

5. Finance income and costs

6. Taxation - income statement and other comprehensive income

7. Earnings per share

7.1 Basic and diluted earnings per share

Basic earnings amounts are calculated by dividing net profit for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the diluted potential ordinary shares into ordinary shares.

7. Earnings per share (continued)

7.2 Weighted average number of shares

7.3 Non-GAAP alternative performance measure: underlying earnings per share

The Group presents an underlying earnings per share measure which excludes the impact of exceptional items, certain non-cash finance costs, amortisation of acquired intangible assets and certain non-recurring items. Underlying earnings per share has been calculated using the underlying profit before taxation and using the same weighted average number of shares in issue as the earnings per share calculation. See Alternative Performance Measures on page 41.

Underlying profit after taxation is derived as follows:

7. Earnings per share (continued)

Underlying earnings per share is summarised as follows:

8. Goodwill

A review of the carrying amount of goodwill and intangible assets across the Group will be carried out at year end. Taking into account current trading conditions and future projections, the Board believes that the carrying amounts of goodwill and intangible assets in each of the Group's CGUs remains sustainable.

9. Intangible assets

The amortisation charge for the period includes £11.9 million relating to amortisation of acquired intangible assets (six months ended 30 June 2016: £10.2 million; year ended 31 December 2016: £21.7 million) and £0.6 million relating to amortisation of other intangible assets (six months ended 30 June 2016: £0.4 million; year ended 31 December 2016: £1.0 million). The amortisation charge for the period is included in administrative expenses in the income statement.

10. Property, plant and equipment

The depreciation charge for the period is included in administrative expenses in the income statement.

11. Interest-bearing loans and borrowings

Movements in interest-bearing loans and borrowings are analysed as follows:

There were no defaults in interest payments in the period under the terms of existing loan agreements.

The Group has the following undrawn committed multi-currency revolving credit facility:

The Group also has access to the uncommitted £60.0 million accordion facility and at 30 June 2017 held aggregate cash balances of £34.3 million (30 June 2016: £105.6 million; 31 December 2016: £40.9 million).

12. Financial risk management and financial instruments

12.1 Financial risk factors and fair value estimation

The Group is exposed to risks arising from the international nature of its operations and the financial instruments which fund them, in particular to foreign currency, interest rate and liquidity risks. Full details of the Group's policies for managing these risks are disclosed in the Group's annual financial statements for the year ended 31 December 2016.

Since the date of that report there have been no significant changes in:

· the nature of the financial risks to which the Group is exposed;

· the nature of the financial instruments which the Group uses;

· the Group's contractual cash outflows and the committed facilities available to fund them; or

· difference between book value and fair value of any financial instruments.

During the period the Group held no level 1 financial instruments, there were no transfers between levels and no changes were made to valuation techniques.

Derivatives shown at fair value in the Group's balance sheet comprise level 2 interest rate swaps fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for level 2 derivatives.

The Group's other financial instruments are measured on bases other than fair value.

12.2 Level 2 and level 3 fair values

At 30 June 2017 derivative financial liabilities of £0.2 million were categorised at level 2 (30 June 2016: net asset of £0.1 million; 31 December 2016: net asset of £0.2 million).

At 30 June 2017 other investments of £1.2 million were categorised at level 3 (30 June 2016: £Nil; 31 December 2016: £Nil).

12.3 Fair value of financial assets and liabilities measured at amortised cost

The fair values of borrowings are as follows:

The fair values of trade and other receivables, cash and cash equivalents, and trade and other payables approximate their carrying amounts.

13. Business combinations

13.1 Acquisition of Howe Green

On 3 March 2017, the Group's ERA division acquired Howe Green, a UK manufacturer of engineered floor and ceiling access hatches sold into the commercial and infrastructure markets. ERA paid a cash consideration of £5.8 million with deferred consideration of £0.4 million payable within twelve months of the date of acquisition.

The consideration paid and the fair value of net assets assumed are as follows:

Acquisition related costs of £0.2 million have been included in exceptional costs in the Group's consolidated income statement (note 4).

The fair value of trade and other receivables is £0.7 million and includes trade receivables with a fair value of £0.7 million. The gross contractual amount for trade receivables due is £0.7 million, of which £Nil are expected to be uncollectible.

Revenue in the consolidated income statement since 3 March 2017 contributed by Howe Green was £1.0 million. Howe Green also contributed £0.3 million of profit before taxation over the same period.

Had the acquisition of Howe Green been completed on the first day of the financial period, an additional £0.7 million of revenue and £0.1 million of profit before taxation would have been contributed to the Group.

13. Business combinations (continued)

Goodwill arising on acquisition is attributable to the expected profitability of the acquired business arising through savings and benefits from:

· the development and extension of ERA's product portfolio into the commercial sector;

· access to the commercial and infrastructure customer base.

The estimated value of intangibles, including goodwill, deductible for tax purposes is £Nil.

13.2 Fair value adjustments made in respect of 2016 acquisitions

The following table summarises the fair value adjustments made in the period in respect of business combinations completed in the 2016 financial year, restated as at 31 December 2016.