TIDMNARS
RNS Number : 8660O
Nationwide Accident Repair Srvs PLC
26 September 2011
NARS
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide", "the Company" or "the Group")
Unaudited Half Year Results
for the six months ended 30 June 2011
Nationwide provides automotive crash repair and accident
administration services principally to the UK insurance industry.
With a national network of accident repair centres and a fleet of
mobile vans located across England, Scotland and Wales, it is the
largest dedicated provider of accident repair services in the
UK.
Key Points
-- Strong profit* growth - reflects continuing progress with
expansion strategy, now in second year
- presence in fleet and retail markets developing alongside core
insurance market
-- Revenue up 6% to GBP92.3m (2010: GBP87.2m)
-- Gross profit margin maintained at 46% (2010: 46%)
-- Underlying* profit before tax up by 16% to GBP3.5m (2010:
GBP3.0m)
Statutory profit before tax of GBP3.0m (2010: GBP3.0m)
-- Non-recurring items of GBP514,000 (2010: credit of
GBP23,000)
-- Underlying* earnings per share up 22% to 6.1p (2010:
5.0p)
Statutory earnings per share maintained at 5.1p (2010: 5.1p)
-- Strong operating cash flows of GBP3.0m (2010: GBP3.3m)
-- Net cash at 30 June 2011 of GBP7.29m (2010: GBP8.15m)
-- Interim dividend of 1.9p (2010: 1.8p)
*before non-recurring items
Michael Marx, Chairman, commented,
"We are now in the second year of our three year growth plan
and, as the Group's results for the first half of the year
indicate, progress towards its objectives has been good. Underlying
profit before tax has risen by 16% to GBP3.5m for the six months to
30 June 2011, with revenues increasing by 6% to GBP92.3 million
over the same period.
The results show the continuing steady progress we are making to
develop our core insurance market and, while sensibly leveraging
our infrastructure and systems to build sales in non-insurance
funded markets, especially fleet and retail, where our presence is
relatively low currently.
While we expect current economic conditions to create some
challenges, we believe that the Group is well positioned for the
remainder of the year and remain very positive about the Group's
long term prospects."
Enquiries:
Nationwide Accident Michael Wilmshurst, Chief T: 01993 701
Repair Services Executive 720
plc David Loftus, Finance Director
Biddicks Katie Tzouliadis/ Sophie T: 020 3178
McNulty 6378
Arbuthnot Securities James Steel/ Adam Lloyd T: 020 7012
2000
CHAIRMAN'S & CHIEF EXECUTIVE'S STATEMENT
Introduction
We are now in the second year of our three year growth plan and,
as the Group's results for the first half of the year indicate,
progress towards its objectives has been good. Underlying profit
before tax has risen by 16% to GBP3.5m for the six months to 30
June 2011, with revenues increasing by 6% to GBP92.3 million over
the same period.
The results show the continuing steady progress we are making to
develop our core insurance market, while sensibly leveraging our
infrastructure and systems to build sales in non-insurance funded
markets, where our market penetration is relatively low currently.
We are especially focused on developing our presence in the fleet
and retail markets, which together generate GBP1.4 billion of
vehicle repairs in the UK, accounting for a third of the value of
all repair jobs every year.
The Group's revenues from the fleet sector increased by 28% over
the six months, with retail sales rising by 72%, and there remains
strong potential for further growth in both these markets as we
continue to implement our growth plan. In our core insurance-funded
market, despite difficult market conditions as overall insurance
claims volumes declined, we have still seen some growth. This
sector, worth approximately GBP3.7 billion per annum and accounting
for two thirds of the value of the crash repair market, remains our
principal target market. We see considerable growth opportunities
here over time as insurers continue to consolidate their supply
chains to secure both operational and cost benefits.
The efficient management of workflows remains a key area for us.
It helps us both to maintain our market-leading service levels and
proposition of Quality, Value, Speed and Service, and to enhance
profitability. The launch of our upgraded mobile repair capability
last year has been instrumental in helping us to strengthen
Nationwide's offering in all our marketplaces and to complete light
vehicle repairs more efficiently.
The Group's balance sheet remains strong, with net cash of
GBP7.29 million. This leaves us well placed to continue to invest
in the Group's operations for further expansion and we expect to
make further progress against our growth plan.
Financial Results
For the six months to 30 June 2011, revenues increased by 6% to
GBP92.33 million (2010: GBP87.25 million). Operating profit before
non-recurring items rose by 5% to GBP3.4m (2010: GBP3.2m), with
gross profit margin maintained at 46% (2010: 46%). Underlying
profit before tax improved by 16% to GBP3.5 million (2010: GBP3.0
million). After accounting for non-recurring items, the statutory
profit before tax was GBP3.0 million (2010: GBP3.0 million).
Non-recurring items totalled GBP514,000 (2010: credit of GBP23,000)
and relate principally to the centralisation of Group finance and
administration functions to one site in Bristol and the closure of
a non-core site in Bournemouth. Underlying earnings per share were
6.1p, an increase of 22% on the same period last year (2010: 5.0p).
Statutory earnings per share were maintained at 5.1p (2010:
5.1p).
Dividend
The Board is pleased to declare an interim dividend of 1.9p
(2010: 1.8p) which will be paid on 4 November 2011 to shareholders
on the register at the close of business on 7 October 2011.
Trading Overview
As indicated above, we continue to achieve good progress with
our three year growth plan.
During the first half, volumes from our core insurance-funded
market were up marginally. This is particularly pleasing in the
light of an insurance marketplace that is currently experiencing a
reduction in vehicle claims. We expect this trend to persist in the
current economic climate. We have close relationships across the
motor insurance industry and work hard to ensure we are aligned
with our insurance customers' needs, based upon our core
proposition of Quality, Value, Speed and Service.
Our fleet sales grew by 28% in the first half of the year to
GBP10.1 million, with new business from a number of fleet
operators, including West Mercia Police, Burnt Tree, the UK's
largest independent rental and contract hire company, and Norfolk
County Council. Retail sales increased significantly, albeit from a
smaller base, rising by 72% to GBP5.0m compared to the first half
of last year. We have invested in marketing and strengthened our
teams in order to enhance our prospects in these markets and it is
pleasing to see the benefits coming through.
Sales growth across our markets has also been supported by the
expansion of our mobile offering. In late summer 2010, we launched
our enhanced mobile repair proposition, which offers light repairs
faster and more conveniently for customers at almost any location
of their choice and expanded our mobile fleet. Revenues from our
mobile offering increased by 58% to GBP3.8 million compared to the
first half of 2010. This service is attractive to our core
insurance market as well as the fleet and retail markets, as
demonstrated by the contract wins with Hastings Insurance Services
and Avis, which are now delivering work for Nationwide's Motorglass
service in line with our expectations.
We took the decision to centralise our finance and central
administration function into one office in Bristol in the first
half of 2011. While this has incurred one-off non-recurring
expenditure, we anticipate that it will reduce costs in 2012 as
well as improve administrative efficiency for both our customers
and suppliers.
Nationwide's integrated offering creates both operational and
competitive advantage for the Group. From a market perspective, we
have extended the range and scope of our services to offer a
one-stop shop. This means that as well as undertaking repairs (both
at our bodyshops and 'off-site' via our mobile fleet), our call
centres can manage the 'first notification of loss' process, claims
handling, the identification of repair work required (i.e.
triaging), the deployment of work and the provision of courtesy
cars. We anchor efficiency across our operations through a common
IT platform. This 'integrated' model enables us to handle repairs
as effectively as possible and our recent investment in the
development of our mobile repair capability improves efficiency
further.
We intend to make additional investment in our mobile repair
capacity during the second half, which will help to support further
growth.
Outlook
Nationwide has made progress with its growth plans in the first
half and we are well placed to build on this success. We see
opportunities to grow our market share in both our core insurance
market, where we currently account for approximately a 5% market
share, and in our newer non-insurance funded markets of fleet and
retail. Our integrated offering positions us to take advantage of
this potential. In addition, our cash generative model and strong
balance sheet, with net cash of GBP7.29 million, underpins both our
ongoing investment in our business and dividend policy.
Following the UK Ministry of Justice's recent announcement that
it will ban the payment of personal injury referral fees, it is
relevant to note that Nationwide's business model is not reliant on
this form of income. In fact, we believe that the ruling may create
further opportunities for us to secure work based on our overall
capability.
While we expect current economic conditions to create some
challenges, we believe that the Group is well positioned for the
remainder of the year and remain very positive about the Group's
long term prospects.
Unaudited Consolidated Statement
of Comprehensive Income For the
six months ended 30 June 2011 Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ------ ---------- ---------- ----------
Revenue 2 92,330 87,245 172,251
Cost of sales (49,760) (46,733) (90,901)
---------------------------------- ------ ---------- ---------- ----------
Gross profit 42,570 40,512 81,350
Distribution costs (24,838) (22,840) (46,492)
Administrative expenses (14,330) (14,407) (28,335)
Share option charge (24) (48) (98)
---------------------------------- ------ ---------- ---------- ----------
Operating profit before
non-recurring items 3,378 3,217 6,425
Non-recurring items -
administrative costs 6 (514) 23 (5)
---------------------------------- ------ ---------- ---------- ----------
Operating profit 2,864 3,240 6,420
Finance income 7 114 2 5
Finance costs 7 - (214) (391)
---------------------------------- ------ ---------- ---------- ----------
Profit before tax 2,978 3,028 6,034
Income tax expense 8 (772) (831) (1,550)
---------------------------------- ------ ---------- ---------- ----------
Profit for the period 2,206 2,197 4,484
---------------------------------- ------ ---------- ---------- ----------
Other comprehensive income - - -
Total comprehensive income for
the period 2,206 2,197 4,484
---------------------------------- ------ ---------- ---------- ----------
Attributable to:
Equity holders of the parent 2,206 2,197 4,484
---------------------------------- ------ ---------- ---------- ----------
Earnings per share
Basic 9 5.1p 5.1p 10.4p
Diluted 9 5.1p 5.1p 10.4p
---------------------------------- ------ ---------- ---------- ----------
All activities of the Group are classed as continuing.
The accompanying notes form an integral part of these financial
statements.
Unaudited Consolidated Statement of
Financial Position
As at 30 June 2011 Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2011 2010 2010
Notes GBP'000 GBP'000 GBP'000
------------------------------------ ------ ---------- ---------- --------
Assets
Non--current assets
Goodwill 7,768 7,768 7,768
Property, plant and equipment 3 12,368 10,491 12,066
Pension and other employee assets 4 10,458 9,101 9,589
------------------------------------ ------ ---------- ---------- --------
30,594 27,360 29,423
------------------------------------ ------ ---------- ---------- --------
Current assets
Inventories 2,468 2,428 3,148
Trade and other receivables 28,422 23,031 27,322
Cash and cash equivalents 7,293 8,151 7,459
------------------------------------ ------ ---------- ---------- --------
38,183 33,610 37,929
------------------------------------ ------ ---------- ---------- --------
Total assets 68,777 60,970 67,352
------------------------------------ ------ ---------- ---------- --------
Liabilities
Non--current liabilities
Long-term provisions - 45 40
Deferred tax liabilities 2,791 2,200 2,621
------------------------------------ ------ ---------- ---------- --------
2,791 2,245 2,661
------------------------------------ ------ ---------- ---------- --------
Current Liabilities
Short-term provisions - 16 31
Trade and other payables 34,041 28,928 33,800
Current tax payable 531 644 164
------------------------------------ ------ ---------- ---------- --------
34,572 29,588 33,995
------------------------------------ ------ ---------- ---------- --------
Total liabilities 37,363 31,833 36,656
------------------------------------ ------ ---------- ---------- --------
Net assets 31,414 29,137 30,696
------------------------------------ ------ ---------- ---------- --------
Equity
Equity attributable to the
shareholders of the parent
Share capital 5 5,400 5,400 5,400
Capital redemption reserve 1,209 1,209 1,209
Share premium account 11,104 11,104 11,104
Revaluation reserve 8 8 8
Retained earnings 13,693 11,416 12,975
------------------------------------ ------ ---------- ---------- --------
Total equity 31,414 29,137 30,696
------------------------------------ ------ ---------- ---------- --------
The accompanying notes form an integral part of these financial
statements.
Company Number 966807
Unaudited Consolidated
Statement of Changes in
Equity For the six
months ended 30 June
2011 Capital Share
Share redemption premium Reval Retained
Capital reserve account reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- ----------- -------- -------- --------- --------
Balance at 1
January 2010 5,400 1,209 11,104 8 10,596 28,317
Share option
charge - - - - 48 48
Dividend paid - - - - (1,425) (1,425)
--------------- -------- ----------- -------- -------- --------- --------
Transactions
with owners - - - - (1,377) (1,377)
--------------- -------- ----------- -------- -------- --------- --------
Profit for the
six month
period - - - - 2,197 2,197
Other
comprehensive
income - - - - - -
Total
comprehensive
income for
the period - - - - 2,197 2,197
--------------- -------- ----------- -------- -------- --------- --------
Balance at 30
June 2010 5,400 1,209 11,104 8 11,416 29,137
Share option
charge - - - - 50 50
Dividend paid - - - - (778) (778)
--------------- -------- ----------- -------- -------- --------- --------
Transactions
with owners - - - - (728) (728)
--------------- -------- ----------- -------- -------- --------- --------
Profit for the
six month
period - - - - 2,287 2,287
Other
comprehensive
income - - - - - -
Total
comprehensive
income for
the period - - - - 2,287 2,287
--------------- -------- ----------- -------- -------- --------- --------
Balance at 31
December
2010 5,400 1,209 11,104 8 12,975 30,696
Share option
charge - - - - 24 24
Dividend paid
(note 10) - - - - (1,512) (1,512)
--------------- -------- ----------- -------- -------- --------- --------
Transactions
with owners - - - - (1,488) (1,488)
--------------- -------- ----------- -------- -------- --------- --------
Profit for the
six month
period - - - - 2,206 2,206
Other
comprehensive
income - - - - - -
Total
comprehensive
income for
the period - - - - 2,206 2,206
--------------- -------- ----------- -------- -------- --------- --------
Balance at 30
June 2011 5,400 1,209 11,104 8 13,693 31,414
--------------- -------- ----------- -------- -------- --------- --------
The accompanying notes form an integral part of these financial
statements.
Unaudited Consolidated Cash Flow
Statement For the six months ended 30
June 2011 Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
------------------------------------------ ---------- ---------- ----------
Operating activities
Profit for the period 2,206 2,197 4,484
Adjustments to arrive at operating cash
flow
Net finance costs (1) (2) (5)
Depreciation 1,162 1,027 2,144
Profit on sale of property, plant and
equipment - - (820)
Taxation recognised in profit or loss 772 831 1,550
Changes in inventories 680 (111) (831)
Changes in trade and other receivables (1,100) 429 (3,862)
Changes in provisions - - 37
Changes in trade and other payables 241 (641) 4,230
Movement in pension fund asset 431 848 1,661
Share option scheme charge 24 48 98
Outflow from pension obligations (1,300) (1,300) (2,600)
Outflow from provisions (71) (56) (83)
------------------------------------------ ---------- ---------- ----------
Net cash flow from operating activities 3,044 3,270 6,003
Tax paid (235) (409) (1,187)
------------------------------------------ ---------- ---------- ----------
2,809 2,861 4,816
Investing activities
Additions to property, plant and
equipment (2,514) (1,556) (4,325)
Proceeds from the disposal of property,
plant and equipment 1,050 - 897
Interest received 1 2 5
(1,463) (1,554) (3,423)
------------------------------------------ ---------- ---------- ----------
Financing activities
Dividend paid (1,512) (1,425) (2,203)
(1,512) (1,425) (2,203)
------------------------------------------ ---------- ---------- ----------
Net decrease in cash and cash equivalents (166) (118) (810)
Cash and cash equivalents at beginning
of period 7,459 8,269 8,269
------------------------------------------ ---------- ---------- ----------
Cash and cash equivalents at end of
period 7,293 8,151 7,459
------------------------------------------ ---------- ---------- ----------
The accompanying notes form an integral part of these financial
statements.
Notes to the Unaudited Interim Statement
For the six months ended 30 June 2011
1. Basis of preparation
The unaudited interim accounts have been prepared on the same
basis and using the same accounting policies as used in the audited
financial statements for the year ended 31 December 2010, except as
noted below.
These unaudited interim statements for the period ended 30 June
2011 have been prepared in accordance with IAS 34, Interim
Financial Reporting. They do not include all of the information
required for full annual financial statements, and should be read
in conjunction with the consolidated financial statements of the
Group for the year ended 31 December 2010, which have been prepared
in accordance with IFRS.
The financial information set out in these interim accounts does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The figures for the year ended 31 December 2010
have been extracted from the statutory financial statements which
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unmodified.
There are a number of other accounting standards that have
become effective in the current period. However, there is no
material impact on the financial statements for the interim
period.
2. Segment analysis
The Group operates three main business segments, Nationwide
Crash Repair Centres ("NCRC"), Network Services and Mobile Division
(which incorporates Motorglass and Mobile Repairs). The segments
are identified by their distinct functions within the Group, being
site based vehicle repairs, accident administration and mobile
vehicle repairs respectively. NCRC is the core business and
comprises a dedicated network of repair centres across England,
Scotland and Wales. Network Services provides accident
administration services to insurance companies and fleet operators,
in the main deploying work to Nationwide Crash Repair Centres
Limited, while the Mobile Division provides mobile repairs, glass
and air-conditioning to the automotive industry. The income and
costs of the holding company are shown within NCRC, which acts as
the support function for the Nationwide Crash Repair Centres
bodyshops.
The revenues and net result generated by the three business
segments are summarised as follows:
NCRC Network Services Mobile Division Total
6 months to 30 June
2011 GBP'000 GBP'000 GBP'000 GBP'000
Revenue from
external customers 81,048 8,125 3,157 92,330
--------------------- -------- ----------------- ---------------- --------
Inter-segment
revenues - 9,632 739 10,371
--------------------- -------- ----------------- ---------------- --------
Total revenue 81,048 17,757 3,896 102,701
--------------------- -------- ----------------- ---------------- --------
Profit before tax 2,498 143 337 2,978
--------------------- -------- ----------------- ---------------- --------
Total Assets 60,825 6,347 1,605 68,777
--------------------- -------- ----------------- ---------------- --------
6 months to 30 June
2010
Revenue from
external customers 78,369 7,224 1,652 87,245
--------------------- -------- ----------------- ---------------- --------
Inter-segment
revenues - 7,932 722 8,654
--------------------- -------- ----------------- ---------------- --------
Total revenue 78,369 15,156 2,374 95,899
--------------------- -------- ----------------- ---------------- --------
Profit/(Loss) before
tax 3,306 (91) (187) 3,028
--------------------- -------- ----------------- ---------------- --------
Total Assets 54,527 5,127 1,316 60,970
--------------------- -------- ----------------- ---------------- --------
12 months to 31
December 2010
Revenue from
external customers 155,217 13,519 3,515 172,251
--------------------- -------- ----------------- ---------------- --------
Inter-segment
revenues - 16,563 1,286 17,849
--------------------- -------- ----------------- ---------------- --------
Total revenue 155,217 30,082 4,801 190,100
--------------------- -------- ----------------- ---------------- --------
Profit/(Loss) before
tax 6,693 311 (970) 6,034
--------------------- -------- ----------------- ---------------- --------
Total Assets 59,815 5,776 1,761 67,352
--------------------- -------- ----------------- ---------------- --------
3. Additions and disposals of property, plant and equipment
Plant, Equipment
6 months to 30 June 2011 Land Buildings and Computers Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- ---------- ----------------- --------
Carrying amount at 1
January 2011 643 4,318 7,105 12,066
Additions 245 1,686 583 2,514
Disposals (245) (805) - (1,050)
Depreciation - (229) (933) (1,162)
Carrying amount at 30 June
2011 643 4,970 6,755 12,368
--------------------------- -------- ---------- ----------------- --------
6 months to 30 June 2010
Carrying amount at 1
January 2010 248 3,949 5,765 9,962
Additions - 482 1,074 1,556
Depreciation - (204) (823) (1,027)
--------------------------- -------- ---------- ----------------- --------
Carrying amount at 30 June
2010 248 4,227 6,016 10,491
--------------------------- -------- ---------- ----------------- --------
Year to 31 December 2010
Carrying amount at 1
January 2010 248 3,949 5,765 9,962
Additions 395 801 3,129 4,325
Disposals - (15) (62) (77)
Depreciation - (417) (1,727) (2,144)
--------------------------- -------- ---------- ----------------- --------
Carrying amount at 31
December 2010 643 4,318 7,105 12,066
--------------------------- -------- ---------- ----------------- --------
4. Pension and other employee assets/obligations
The Company operates a funded pension scheme in the UK. The Fund
has both defined benefit and defined contribution sections. Since 1
January 2002 the Fund has been closed to new members. Active
members of the Fund ceased to accrue further benefits in the
defined benefit section on 31 July 2006. Under the current Schedule
of Contributions, contributions to the Fund for the year beginning
1 January 2011 will be GBP2.6m. This disclosure is in respect of
the defined benefit section of the Fund only. The Company made
contributions of GBP1,300,000 (2010: GBP1,300,000) to the defined
benefit scheme during the six month period to 30 June 2011 and
GBP2,600,000 in the year to 31 December 2010. The defined benefit
scheme was closed for future accruals on 31 July 2006 with active
members transferred to a new defined contribution section of the
scheme.
The Company has opted to amortise all actuarial gains and losses
above the corridor (10% of the greater of assets and liabilities)
over a term of 15 years.
A full actuarial valuation of the scheme was carried out as at
31 December 2010 and has been updated to 30 June 2011 by a
qualified independent actuary.
30 Jun 2011 30 Jun 2010 31 Dec 2010
------------------------------- ------------- -------------- --------------
The major assumptions used by
the actuary were (in nominal
terms): % % %
Discount rate 5.70 5.60 5.60
Rate of increase to pensions
in payment 3.00 3.00 3.00
RPI Inflation assumption 3.40 3.10 3.30
CPI Inflation assumption 2.70 n/a 2.60
------------------------------- ------------- -------------- --------------
Assumed life expectancies on retirement at age 65 are:
30 Jun 2011 30 Jun 2010 31 Dec 2010
Current Current Current
Pensioners Pensioners Pensioners
-------------- --------------- ------------- -------------- --------------
Retiring
today: Males 21.2 21.1 21.1
Females 23.8 23.7 23.7
30 Jun 2011 30 Jun 2010 31 Dec 2010
Future Future Future
Pensioners Pensioners Pensioners
---------------- --------- --------------- --------------- ---------------
Retiring today: Males 20.9 20.8 20.8
Females 23.5 23.4 23.4
Retiring in 20
years time: Males 22.8 22.7 22.7
Females 25.4 25.3 25.3
The assumptions used in determining the overall expected return
of the scheme have been set with reference to yields available on
government bonds and appropriate risk margins. The pre and post
retirement mortality assumptions use the AC00 (Ultimate) and S1PA
tables respectively. The SAPS S1 series of mortality tables were
published by the Continuous Mortality Investigation Bureau in
October 2008 and are based on the mortality of defined-benefit
pension schemes. The "AC00" tables are based on the mortality
experience of life assurance policyholders. The "S1PA" tables are
based on the mortality experience of pension annuity
policyholders.
30 Jun 2011 30 Jun 2010 31 Dec 2010
% GBP'000 % GBP'000 % GBP'000
Equities 8.7% 40,584 8.8% 31,881 8.5% 39,723
Bonds 5.0% 13,204 4.9% 13,261 4.9% 13,220
Property 8.7% 4,653 8.8% 4,473 8.5% 4,570
Other 4.0% 2,357 3.9% 2,802 3.9% 1,793
------------------------ ----- --------- ----- --------- ----- ---------
Total market value of
assets 60,798 52,417 59,306
Present value of
defined obligations
(funded plans) (73,444) (77,337) (73,366)
------------------------ ----- --------- ----- --------- ----- ---------
Present value of
unfunded obligations (12,646) (24,920) (14,060)
Unrecognised actuarial
losses 23,104 34,021 23,649
------------------------ ----- --------- ----- --------- ----- ---------
Net asset in balance
sheet 10,458 9,101 9,589
------------------------ ----- --------- ----- --------- ----- ---------
Actual return on assets
in period 1,446 (1,085) 5,781
------------------------ ----- --------- ----- --------- ----- ---------
Reconciliation of opening and closing balances of the present
value of the defined benefit obligations
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
--------------------------------- ---------- ---------- ----------
Benefit obligation at beginning
of period 73,366 73,195 73,195
Interest cost 2,009 2,185 4,331
Actuarial (gain)/(loss) (677) 2,695 (2,145)
Benefits paid (1,254) (738) (2,015)
--------------------------------- ---------- ---------- ----------
Balance at end of period 73,444 77,337 73,366
--------------------------------- ---------- ---------- ----------
Reconciliation of opening and closing balances of the fair value
of plan assets
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- ----------
Fair value of scheme assets at
beginning of period 59,306 52,940 52,940
Expected return on scheme assets 2,122 1,971 3,940
Actuarial (loss)/gain (676) (3,056) 1,841
Contributions by employers 1,300 1,300 2,600
Benefits paid (1,254) (738) (2,015)
---------------------------------- ---------- ---------- ----------
Assets at end of period 60,798 52,417 59,306
---------------------------------- ---------- ---------- ----------
The amounts recognised in the statement of comprehensive income
are:
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
------------------------------------- ---------- ---------- ----------
Current service cost - - -
Interest on obligation 2,009 2,185 4,331
Expected return on assets (2,122) (1,971) (3,940)
Actuarial loss recognised in period 544 634 1,270
Curtailments and settlements - - -
------------------------------------- ---------- ---------- ----------
431 848 1,661
------------------------------------- ---------- ---------- ----------
Charged to:
Administrative costs 544 634 1,270
Finance costs - 214 391
------------------------------------- ---------- ---------- ----------
544 848 1,661
------------------------------------- ---------- ---------- ----------
Credited to:
Finance income (113) - -
------------------------------------- ---------- ---------- ----------
431 848 1,661
------------------------------------- ---------- ---------- ----------
History of scheme assets, obligations and experience
adjustments
30 Jun 31 Dec 31 Dec 31 Dec 31 Dec
2011 2010 2009 2008 2007
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- --------- --------- ---------
Present value of
defined benefit
obligations (73,444) (73,366) (73,195) (60,131) (65,040)
Fair value of scheme
assets 60,798 59,306 52,940 43,668 54,733
----------------------- --------- --------- --------- --------- ---------
Deficit in scheme (12,646) (14,060) (20,255) (16,463) (10,307)
----------------------- --------- --------- --------- --------- ---------
Experience adjustments
arising on scheme
liabilities (677) (2,145) 11,285 (6,983) (8,042)
Experience item as a %
of scheme
liabilities (1%) (3%) 15% (12%) (12%)
Experience adjustments
arising on scheme
assets (676) 1,841 5,400 (16,019) (207)
Experience item as a %
of scheme assets (1%) 3% 10% (37%) 0%
----------------------- --------- --------- --------- --------- ---------
5. Equity
30 June 2011 30 June 2010 31 December 2010
--------------------- ---------------------
Shares GBP'000 Shares GBP'000 Shares GBP'000
------------ ----------- -------- ----------- -------- ----------- --------
Authorised
Ordinary
shares of
12.5p
each 64,000,000 8,000 64,000,000 8,000 64,000,000 8,000
------------ ----------- -------- ----------- -------- ----------- --------
Issued and
fully paid
Ordinary
shares of
12.5p
each 43,197,220 5,400 43,197,220 5,400 43,197,220 5,400
------------ ----------- -------- ----------- -------- ----------- --------
Of the 20,802,780 shares authorised, but not issued, 4,262,861
are reserved for issue in respect of the share options.
Share options
Number
of Exercise Exercise
shares price Period
---------------- ------------ ---------- --------- ---------
M A Wilmshurst Approved 25,751 GBP1.165 2009-16
Unapproved 2,217,860 GBP1.11 2009-16
D J Loftus Approved 25,751 GBP1.165 2009-16
Unapproved 1,096,055 GBP1.11 2009-16
S D G Thompson Approved 25,751 GBP1.165 2009-16
Unapproved 871,693 GBP1.11 2009-16
----------------------------- ---------- --------- ---------
4,262,861
----------------------------- ---------- --------- ---------
All the above options were issued on 4 July 2006 and no
additional share options have been issued since this date. In
total, GBP24,000 of employee compensation expense has been included
in the consolidated statement of comprehensive income for the six
month period to 30 June 2011 and GBP98,000 in the year to 31
December 2010. The corresponding credit is taken to shareholders'
funds. No liabilities were recognised due to share based
transactions.
Each Director has been granted two tranches of options. The
first tranche is not subject to any vesting conditions and the
second tranche is subject to achievement of a Total Shareholder
Return performance condition. Under both tranches, vested options
can be exercised at any time between the third and tenth
anniversary of the date of the grant.
The following have been factored into the model:
Exercise prices of GBP1.11 and GBP1.165, expected volatility of
25%, dividend yield of 3.00%, equivalent risk free rate of return
being the rate of return on zero-coupon Government bonds with a
term equal to the expected life assumptions.
The Company's assumptions regarding the volatility of its shares
have been based on a review of market and competitors'
volatility.
The Group's objectives when managing capital are:
-- to safeguard the entity's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
-- to provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The Group sets the amount of capital in proportion to risk. The
Group manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debt.
6. Non-recurring items
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ---------- ----------
Site closure costs (257) (470) (513)
Centralisation costs (208) - -
Redundancy costs (49) (135) (337)
Profit on assets destroyed in fire - 628 845
------------------------------------ ---------- ---------- ----------
(514) 23 (5)
------------------------------------ ---------- ---------- ----------
The site closure costs of GBP257k in 2011 relate to a provision
for the closure of the Bournemouth branch that was announced in
June 2011. The closure costs of GBP470k in the 6 months to June
2010 related to the closure of the Kidderminster site and the costs
of GBP513k in the 12 months to December 2010 have arisen due to a
provision for the disposal of the Croydon property lease.
The centralisation costs of GBP208,000 relate to a provision for
redundancy costs in relation to the centralisation of the Group's
finance and administration staff in Bristol.
In 2009, the Company suffered two fires at its sites in
Manchester (August 2009) and Norwich (September 2009). The Group's
insurers accepted liability. Both claims have now been fully
settled, covering both the loss of assets and business interruption
(lost profits). The Norwich site reopened in May 2010 and a profit
on disposal of assets of GBP167k was recognised in 2010 (6 months
to June 2010: GBP143k). The Manchester site was fully operational
in July 2010 and a profit on disposal of assets of GBP678k was
recognised in 2010 (6 months to June 2010: GBP485k).
7. Finance income and finance costs
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ----------
Finance income
Pension costs (note 4):
- interest on obligation (2,009) - -
- expected return on assets 2,122 - -
Interest receivable on bank balances 1 2 5
114 2 5
-------------------------------------- ---------- ---------- ----------
Finance costs
Pension costs (note 4):
- interest on obligation - 2,185 4,331
- expected return on assets - (1,971) (3,940)
-------------------------------------- ---------- ---------- ----------
- 214 391
-------------------------------------- ---------- ---------- ----------
8. Tax expense
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ---------- ----------
Current tax:
UK corporation tax 602 743 1,128
Adjustments in respect of prior years - - (87)
--------------------------------------- ---------- ---------- ----------
602 743 1,041
--------------------------------------- ---------- ---------- ----------
Deferred tax:
On share options 1 (6) (20)
Movement relating to pension asset
(IAS 19) 130 36 167
Temporary differences origination
and reversal 39 58 362
--------------------------------------- ---------- ---------- ----------
170 88 509
--------------------------------------- ---------- ---------- ----------
Income tax expense 772 831 1,550
--------------------------------------- ---------- ---------- ----------
9. Earnings per share
Basic earnings per share
The basic earnings per share has been calculated using the net
profit attributable to the shareholders of the Company of
GBP2,206,000 for the six month period (2010: GBP2,197,000) (12
months to 31 December 2010: GBP4,484,000).
The weighted average number of outstanding shares used for the
basic earnings per share amounted to 43,197,220 (2010: 43,197,220)
(12 months to 31 December 2010: 43,197,220).
Diluted earnings per share
The diluted earnings per share has been calculated using the net
profit attributable to the shareholders of the Company of
GBP2,206,000 (2010: GBP2,197,000) (12 months to 31 December 2010:
GBP4,484,000).
The weighted average number of outstanding shares used for the
diluted earnings per share amounted to 43,197,220 (2010:
43,197,220) (12 months to 31 December 2010: 43,197,220) and assumes
the exercise of all the share options detailed in note 5 since the
date they were granted and the average market price of GBP0.99. Due
to the share options being anti-dilutive, the diluted earnings per
share is the same as the basic earnings per share.
Underlying earnings per share
The underlying earnings per share has been calculated as
follows:
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2011 2010 2010
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ----------
Profit before tax (as stated) 2,978 3,028 6,034
Non-recurring items 514 (23) 5
3,492 3,005 6,039
Tax expense (as stated) (772) (831) (1,550)
Tax effect on non-recurring items (103) 6 (1)
-------------------------------------- ---------- ---------- ----------
Profit after tax after non-recurring
items 2,617 2,180 4,488
-------------------------------------- ---------- ---------- ----------
Underlying earnings per share 6.1p 5.0p 10.4p
-------------------------------------- ---------- ---------- ----------
10. Dividends
In June 2011, the Company paid a dividend of GBP1,512,000 to its
equity shareholders. This comprised a final dividend in respect of
2010 of 3.50p per share. The directors have declared an interim
dividend of 1.9p per share (2010:1.8p), which will be paid on 4
November 2011 to shareholders on the register at the close of
business on 7 October 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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