TIDMNARS
RNS Number : 2721N
Nationwide Accident Repair Srvs PLC
27 September 2012
NARS
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide", "the Company" or "the Group")
Unaudited Half Year Results
for the six months ended 30 June 2012
Nationwide provides automotive crash repair and accident
administration services to the UK insurance industry, fleet and
retail customers. With a national network of accident repair
centres located across England, Scotland and Wales it is the
largest dedicated provider of accident repair services in the
UK.
Key Points
-- Robust performance in tough market conditions - in line with management expectations
-- Revenue down 12.9% to GBP80.7m (2011: GBP92.6m) - principally
reflecting site closures in 2011
Revenue on a like-for-like1 basis, down by 4.7%:
- insurance like-for-like1 revenue down 12.7% to GBP61.1m
- strong growth in fleet like-for-like1 revenue, up 29.1% to
GBP17.0m
- encouraging progress with retail like-for-like1 revenue up
71.7% to GBP2.6m
-- Gross profit margin increased to 36.3% (2011: 35.5%)
-- Underlying2 profit before tax down to GBP2.8m (2011: GBP3.5m)
Statutory profit before tax of GBP2.1m (2011: GBP3.0m)
-- Non-recurring items of GBP0.6m (2011: GBP0.5m)
-- Underlying2 earnings per share down to 5.0p (2011: 6.1p)
Statutory earnings per share of 3.9p (2011: 5.1p)
-- Net cash at 30 June 2012 increased to GBP8.0m (2011: GBP7.3m)
-- Interim dividend maintained at 1.9p (2011: 1.9p)
-- Significant long term growth opportunities
Notes: 1. Like-for-like revenue calculated as this period's
revenue compared to the corresponding period last year for all
sites that are at least 12 months old at the beginning of our
financial year. Bodyshops closed during the period are excluded
from both periods.
2. 'Underlying' is calculated before non-recurring items.
Michael Marx, Chairman, commented,
"Set against the tough conditions in our core insurance
marketplace, I am pleased with Nationwide's performance for the
first six months of the year and results are in line with
management expectations.
While the challenges in our core insurance market are evident in
these results overall the management has responded robustly to
market conditions. We have made progress with our initiatives to
develop our non-insurance funded revenues and sales from fleet
customers has increased by 27% over the period and now represents
21% of Group revenue compared to very modest levels four years ago.
We have strengthened the overall competitive position of the Group
whilst providing a platform to grow market share.
With an overall market share of less than 5% we remain confident
that, as the market leader, we can continue to successfully develop
a complementary range of services and grow market share in both our
traditional insurance market and the emerging sectors."
Enquiries:
Nationwide Accident Michael Wilmshurst, Chief T: 01993 701720
Repair Services Executive
plc David Pugh, Finance Director
Biddicks Katie Tzouliadis/ Sophie T: 020 3178
McNulty 6378
Westhouse Securities Antonio Bossi T: 020 7601
Henry Willcocks 6100
CHAIRMAN'S & CHIEF EXECUTIVE'S STATEMENT
Introduction
Set against the tough conditions in our core insurance
marketplace, we are pleased with Nationwide's performance for the
first six months of the year and results are in line with
management expectations.
While the challenges in our core insurance market are evident in
these results, with insurance-related revenues showing a decline in
line with the market trend, overall the management has responded
robustly to market conditions. We have made progress with our
initiatives to develop our non-insurance funded revenues and sales
from fleet customers has increased by 27% over the period and now
represents 21% of Group revenue compared to very modest levels four
years ago. We have strengthened the overall competitive position of
the Group whilst providing a platform to grow market share.
During the first half, customer satisfaction was at record
levels across the business. We continue to develop our integrated
management information system in order to deliver economies of flow
to the Group alongside enhanced customer service levels. The growth
in our mobile repair and glass activities has also provided
customers with additional convenient and integrated solutions.
Strong cost control remains a focus and we have made further
progress in this area through the continuous improvement of working
practices. We have also strengthened our management team.
Financial Results
Group revenue for the six months to 30 June 2012 of GBP80.7m
(2011: GBP92.6m) is down 12.9%. On a like-for-like basis, excluding
sites closed, Group revenue is down by only 4.7%. The like-for-like
reduction reflects the 12.7% decrease in revenue from insurance
customers, which was partly compensated for by the 29.1%
like-for-like growth in fleet sales and the 71.7% like-for-like
increase in retail sales. Effective control of costs has enabled
the Group to improve its gross margin to 36.3% (2011: 35.5%).
Underlying profit before tax of GBP2.8m (2011: GBP3.5m) is lower
than the corresponding period mainly due to the effect of the
decrease in revenue. Underlying earnings per share is 5.0p (2011:
6.1p).
The net non-recurring costs for the first six months of this
year amounted to GBP0.6m (2011: GBP0.5m). This reflects the GBP0.6m
release of 2011 closure provisions which partly offset the GBP1.2m
of costs incurred largely relating to the closure of one site
during the period. The GBP0.5m non-recurring cost in 2011 related
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. The statutory profit before tax was
GBP2.1m (2011: GBP3.0m) and statutory earnings per share was 3.9p
(2011: 5.1p).
During the first half of 2012 net payments of GBP1.0m were made
against the provisions for site closures announced last year. One
of these sites has already been sub-let and further negotiations
are ongoing with a view to completion before the end of this
year.
The cash position of the Group remains strong, having increased
by 9.2% to GBP8.0m at the 30 June 2012 (2011: GBP7.3m).
Pension
The Group is required to adopt IAS 19 (revised) for reporting
periods commencing no later than 1 January 2013 and this will have
the effect of removing the 'corridor approach' as well as applying
the same discount factor to both defined obligations and pension
asset returns. The principal effect is that the pension deficit of
GBP27.8m will be recognised on the consolidated balance sheet. The
pension deficit of GBP27.8m has increased by GBP1.7m against
GBP26.1m at 31 December 2011, largely because of the effect of
declining bond yields on the discount rate applicable to the value
of defined benefit obligations. In addition, in the consequent
restatement of results to 30 June 2012, the adoption of IAS 19
(revised) will have the effect of increasing profit before tax by
GBP0.2m and reducing consolidated retained earnings by GBP30.0m.
The Company's distributable reserves will also be affected by IAS
19 (revised) and the pro-forma balance as at 30 June 2012 is likely
to be approximately GBP5.1m, providing a robust base in support of
the dividend policy.
Dividend
The Board is pleased to declare an interim dividend of 1.9p
(2011: 1.9p) which will be paid on 5 November 2012 to shareholders
on the register at the close of business on 12 October 2012.
Trading Overview
The Group traded in line with management expectations during the
first half of our financial year. Nationwide's progress was
particularly encouraging in the fleet market where all of our
business segments delivered revenue growth. Our Motorglass and
mobile crash repair operations also advanced significantly.
Nationwide Crash Repair Centres ("NCRC"), our largest business
segment, generated revenue of GBP71.0m during the six months to 30
June 2012. Like-for-like revenue was 5.3% lower than the
corresponding period in 2011 due to a 12.0% decline in insurance
revenue, which we believe is broadly in line with the market trend
and reflects declining claims frequency. Fleet revenues of GBP11.8m
now represent almost 17% of NCRC's overall activity and have grown
on a like-for-like basis by 28% during the past year. Retail sales
of GBP2.6m have grown by 75% like-for-like and further growth is
planned for this area. Following the closure of nine sites last
year and one this year, we are pleased to see that our gross margin
of 38% for this segment is one percentage point ahead of the
corresponding period as greater volumes per site were experienced
alongside flexible working practices. Customer satisfaction levels
advanced to 86.1% in the period (2011: 84.3%) and results for both
"full cycle" times (time taken for a repair job measured from the
point of claim) and "key to key" repair times (time taken for a
repair job measured from receipt of vehicle) have improved (i.e.
reduced) to 15.68 days (2011: 23.95 days) and 10.97 days (2011:
12.76 days) respectively. The continuing growth of our mobile
repair solution, now integrated within the fixed site operations,
has contributed towards the improvement of these key performance
indicators and we will continue to build upon this success.
Network Services, our accident management business, deployed
more than 40,000 claims during the six months to 30 June 2012; an
increase of 15% over the corresponding period last year, with 83%
of the work being deployed into Nationwide Crash Repair Centres. We
were pleased to see increased demand from our fleet customers and
this market now represents 52% of Network Services' revenue,
compared to 37% this time last year. An increasing number of
customers are enjoying the integrated range of services that we can
provide including first notification of loss, deployment, claims
handling, courtesy vehicle organisation, network management, fixed
and mobile repair and salvage. The management information systems
are common to those of our other business segments and this
provides both customers and our own operations team enhanced
visibility and efficiencies of work flow.
We are pleased that our vehicle glass repair and replacement
business, Motorglass, has continued its successful growth. Revenue
of GBP3.0m (2011: GBP2.5m) was 20% up on the corresponding period.
The operation completed almost 28,000 jobs and achieved an average
customer satisfaction index of 89.5% (2011: 88.5%). Fleet customers
accounted for approximately 54% of Motorglass' revenue and we are
pleased to have a number of customers who have initially
experienced our glass services and subsequently extended the
relationship to other business areas.
Strategy
The Group strategy is to develop an integrated range of
automotive support service solutions for insurance, fleet and
retail customers.
The insurance-funded accident repair services market is
estimated at GBP2.1bn and, as we have previously reported, is under
structural pressure evident in the pattern of reducing insurance
claims. The reduction in both the volume and frequency of claims is
partially cyclical and reflects the difficult economic environment,
with reduced car usage and fewer claims for light cosmetic repairs.
This pattern is more pronounced in the private motor market than
the commercial sector. Improved vehicle technology, traffic
management initiatives, etc. are part of a longer term trend that
will continue to reduce accident frequency. As the UK's largest
provider of accident repair and management services to the
insurance sector, with market-leading systems, we believe that we
are well placed to use our efficiencies of scale to gain market
share.
The fleet market represents a growth opportunity for Nationwide,
as demonstrated by our growth from very modest sales four years ago
to revenue of GBP17.0m during the first half of 2012. Our industry
leading integrated I.T. platform assists our ability to deliver
economies of flow to fleet customers across a growing range of
complementary services currently encompassing accident management,
repair and glass. We are developing further competitive advantage
through initiatives such as fleet orientated equipment in our sites
and mobile services which improve repair cycle times and therefore
the productivity of our customers' fleet. We believe that there are
substantial opportunities for growth in this GBP0.9bn sector.
Retail sales, currently small, also offer growth potential.
Through the development of appropriate pricing structures, I.T.
platforms and marketing opportunities we believe that significant
growth can be delivered in this GBP0.5bn market.
Outlook
We operate in a large market, conservatively estimated at
GBP3.5bn. This offers the Group significant long term growth
opportunities. With an overall market share of less than 5% we
remain confident that, as the market leader, we can continue to
successfully develop a complementary range of services and grow
market share in both our traditional insurance market and the
emerging sectors.
Unaudited Consolidated Statement of
Comprehensive Income Unaudited Unaudited Audited
For the six months ended 30 June 2012 Restated Restated
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2012 2011 2011
Notes GBP'000 GBP'000 GBP'000
---------------------------------------- ------ ------------ ------------ -----------
Revenue 2 80,715 92,621 173,386
Cost of sales (51,436) (59,740) (112,752)
---------------------------------------- ------ ------------ ------------ -----------
Gross profit 29,279 32,881 60,634
Distribution costs (15,794) (18,460) (34,952)
Administrative expenses (10,756) (11,019) (20,417)
Share option charge - (24) (49)
---------------------------------------- ------ ------------ ------------ -----------
Operating profit before non-recurring
items 2,729 3,378 5,216
Non-recurring items - administrative
costs 3 (623) (514) (8,093)
---------------------------------------- ------ ------------ ------------ -----------
Operating profit/(loss) 2,106 2,864 (2,877)
Finance income 4 28 114 289
Finance costs 4 (2) - -
---------------------------------------- ------ ------------ ------------ -----------
Profit/(loss) before tax 2,132 2,978 (2,588)
Income tax (expense)/credit 5 (448) (772) 206
---------------------------------------- ------ ------------ ------------ -----------
Profit/(loss) for the period 1,684 2,206 (2,382)
---------------------------------------- ------ ------------ ------------ -----------
Other comprehensive income - - -
Total comprehensive income for the
period 1,684 2,206 (2,382)
---------------------------------------- ------ ------------ ------------ -----------
Attributable to:
Equity holders of the parent 1,684 2,206 (2,382)
---------------------------------------- ------ ------------ ------------ -----------
Earnings per share
Basic 6 3.9p 5.1p (5.5p)
Diluted 6 3.9p 5.1p (5.5p)
---------------------------------------- ------ ------------ ------------ -----------
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 2012 Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2012 2011 2011
Notes GBP'000 GBP'000 GBP'000
----------------------------------------- ------ ----------------- ------------ ----------
Assets
Non--current assets
Goodwill 6,266 7,768 6,266
Property, plant and equipment 8 10,576 12,368 11,353
Pension assets 9 11,747 10,458 11,391
----------------------------------------- ------ ----------------- ------------ ----------
28,589 30,594 29,010
----------------------------------------- ------ ----------------- ------------ ----------
Current assets
Inventories 2,383 2,468 2,459
Trade and other receivables 27,869 28,422 28,113
Current tax receivable 119 - 692
Cash and cash equivalents 7,962 7,293 7,995
----------------------------------------- ------ ----------------- ------------ ----------
38,333 38,183 39,259
----------------------------------------- ------ ----------------- ------------ ----------
Total assets 66,922 68,777 68,269
----------------------------------------- ------ ----------------- ------------ ----------
Liabilities
Non--current liabilities
Long-term provisions 2,339 - 2,621
Deferred tax liabilities 2,956 2,791 2,525
----------------------------------------- ------ ----------------- ------------ ----------
5,295 2,791 5,146
----------------------------------------- ------ ----------------- ------------ ----------
Current liabilities
Short-term provisions 1,037 - 1,353
Trade and other payables 32,876 34,041 35,740
Current tax payable - 531 -
----------------------------------------- ------ ----------------- ------------ ----------
33,913 34,572 37,093
----------------------------------------- ------ ----------------- ------------ ----------
Total liabilities 39,208 37,363 42,239
----------------------------------------- ------ ----------------- ------------ ----------
Net assets 27,714 31,414 26,030
----------------------------------------- ------ ----------------- ------------ ----------
Equity
Equity attributable to the shareholders
of the parent
Share capital 10 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 9,993 13,693 8,309
----------------------------------------- ------ ----------------- ------------ ----------
Total equity 27,714 31,414 26,030
----------------------------------------- ------ ----------------- ------------ ----------
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 2012 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 2011 5,400 1,209 11,104 8 12,975 30,696
Share option charge - - - - 24 24
Dividend paid (note 7) - - - - (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
Share option charge - - - - 25 25
Dividend paid (note 7) - - - - (821) (821)
--------------------------------- -------- ----------- -------- -------- --------- --------
Transactions with owners - - - - (796) (796)
--------------------------------- -------- ----------- -------- -------- --------- --------
Loss for the six month period - - - - (4,588) (4,588)
Other comprehensive income - - - - - -
Total comprehensive income for
the period - - - - (4,588) (4,588)
--------------------------------- -------- ----------- -------- -------- --------- --------
Balance at 31 December 2011 5,400 1,209 11,104 8 8,309 26,030
Dividend paid (note 7) - - - - - -
--------------------------------- -------- ----------- -------- -------- --------- --------
Transactions with owners - - - - - -
--------------------------------- -------- ----------- -------- -------- --------- --------
Profit for the six month period - - - - 1,684 1,684
Other comprehensive income - - - - - -
Total comprehensive income for
the period - - - - 1,684 1,684
--------------------------------- -------- ----------- -------- -------- --------- --------
Balance at 30 June 2012 5,400 1,209 11,104 8 9,993 27,714
--------------------------------- -------- ----------- -------- -------- --------- --------
The accompanying notes form an integral part of these financial
statements.
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 June 2012 Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2012 2011 2011
GBP'000 GBP'000 GBP'000
------------------------------------------------------ ------------ ------------ ----------
Operating activities
Profit/(loss) for the period 1,684 2,206 (2,382)
Adjustments to arrive at operating cash flow
Net finance cost/(income) 2 (1) -
Depreciation 1,182 1,162 2,380
Goodwill written off on sites (non-recurring
item) - - 1,502
(Profit)/loss on sale of property, plant and
equipment (Incl non-recurring items) (19) - 410
Taxation recognised in profit or loss 448 772 (206)
Changes in inventories 76 680 689
Changes in trade and other receivables 244 (1,100) (791)
Changes in trade and other payables (2,864) 241 1,940
Changes in provisions 379 - 3,903
Movement in pension fund asset 944 431 798
Share option scheme charge - 24 49
Outflow from pension obligations (1,300) (1,300) (2,600)
Outflow from provisions (977) (71) -
------------------------------------------------------ ------------ ------------ ----------
Net cash flow from operating activities (201) 3,044 5,692
Tax received/(paid) 556 (235) (746)
------------------------------------------------------ ------------ ------------ ----------
355 2,809 4,946
Investing activities
Additions to property, plant and equipment (408) (2,514) (2,396)
Proceeds from the disposal of property, plant
and equipment 22 1,050 319
Interest (paid)/received (2) 1 -
(388) (1,463) (2,077)
------------------------------------------------------ ------------ ------------ ----------
Financing activities
Dividend paid - (1,512) (2,333)
- (1,512) (2,333)
------------------------------------------------------ ------------ ------------ ----------
Net (decrease)/increase in cash and cash equivalents (33) (166) 536
Cash and cash equivalents at beginning of
period 7,995 7,459 7,459
------------------------------------------------------ ------------ ------------ ----------
Cash and cash equivalents at end of period 7,962 7,293 7,995
------------------------------------------------------ ------------ ------------ ----------
The accompanying notes form an integral part of these financial
statements.
Notes to the Unaudited Interim Statement
For the six months ended 30 June 2012
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 2011, except as
noted below.
The Group recategorised certain items of income and expense from
distribution costs and administration expenses to revenue and cost
of sales. The consolidated statement of comprehensive income has
been restated accordingly for the six months to 30 June 2011 and
the twelve months to 31 December 2011 as follows.
6 months to 30 June Revenue Cost of Distribution Administrative Share Option Operating
2011 sales costs expenses Charge Profit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As previously reported 92,330 (49,760) (24,838) (14,330) (24) 3,378
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Inter-segment revenues
reclassified (92) 92 - - - -
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Sundry Income moved
to Revenue 383 - - (383) - -
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Costs reclassified - (10,072) 6,378 3,694 - -
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Restated 92,621 (59,740) (18,460) (11,019) (24) 3,378
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
12 months to 31 December GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2011
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
As previously reported 172,937 (94,080) (45,461) (28,131) (49) 5,216
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Inter-segment revenues
reclassified (227) 227 - - - -
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Sundry Income moved
to Revenue 676 - - (676) - -
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Costs reclassified - (18,899) 10,509 8,390 - -
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
Restated 173,386 (112,752) (34,952) (20,417) (49) 5,216
-------------------------- -------- ---------- ------------- --------------- ------------- ----------
These unaudited interim statements for the period ended 30 June
2012 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 2011, 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 2011
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 chief operating decision maker, as defined by IFRS 8, has
been identified as the Board of Directors of Nationwide Accident
Repair Services plc. The information reported below is consistent
with the reports regularly provided to the Board of Directors. The
Group operates three main operating segments, Nationwide Crash
Repair Centres ("NCRC" which incorporates Mobile Repairs), Network
Services and Motorglass (which incorporates Windscreen Invoice
Control Service "WICS"). The segments are identified by their
distinct functions within the Group, being site-based repairs,
supported by mobile vehicle repairs, accident administration and
glass services 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 Motorglass and WICS provide glass, air conditioning
and auto-electronic services 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.
Intra-group transactions with Network Services are accounted for
including VAT, as the segment is within a separate VAT group. All
intra-group transactions are invoiced or recharged at cost.
The revenues and net result generated by the three business
segments are summarised as follows:
NCRC Network Services Motorglass Total
6 months to 30 June GBP'000 GBP'000 GBP'000 GBP'000
2012
-------------------------- -------- ----------------- ----------- --------
Revenue from external
customers 70,693 7,467 2,555 80,715
-------------------------- -------- ----------------- ----------- --------
Inter-segment revenues 258 12,458 428 13,144
-------------------------- -------- ----------------- ----------- --------
Total revenues 70,951 19,925 2,983 93,859
-------------------------- -------- ----------------- ----------- --------
Depreciation 1,050 66 66 1,182
--------------------------
Non-recurring items (623) - - (623)
Profit before tax 1,773 178 181 2,132
-------------------------- -------- ----------------- ----------- --------
Total Assets 58,709 5,358 2,855 66,922
-------------------------- -------- ----------------- ----------- --------
Additions to non-current
assets 367 - 41 408
-------------------------- -------- ----------------- ----------- --------
6 months to 30 June GBP'000 GBP'000 GBP'000 GBP'000
2011
Revenue from external
customers 82,620 8,033 1,968 92,621
Inter-segment revenues 229 9,724 510 10,463
Total revenues 82,849 17,757 2,478 103,084
Depreciation 1,058 66 38 1,162
Non-recurring items (514) - - (514)
Profit before tax 2,638 270 70 2,978
Total Assets 61,083 6,347 1,347 68,777
-------------------------- -------- ----------------- ----------- --------
Additions to non-current
assets 2,448 - 66 2,514
-------------------------- -------- ----------------- ----------- --------
12 months to 31 December GBP'000 GBP'000 GBP'000 GBP'000
2011
Revenue from external
customers 153,667 15,564 4,155 173,386
Inter-segment revenues 857 22,028 966 23,851
Total revenues 154,524 37,592 5,121 197,237
Depreciation 2,151 150 79 2,380
Non-recurring items 8,093 - - 8,093
(Loss)/Profit before
tax (2,966) 212 166 (2,588)
Total Assets 61,430 4,531 2,308 68,269
-------------------------- -------- -------- -------- --------
Additions to non-current
assets 2,239 - 157 2,396
-------------------------- -------- -------- -------- --------
3. Non-recurring items
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2012 2011 2011
GBP'000 GBP'000 GBP'000
--------------------------------------- ----------- ----------- ----------
Site closure costs (379) (257) (5,595)
Redundancy costs - (257) (996)
Employee Settlements (244) - -
Goodwill impaired relating to closed
sites - - (1,274)
Goodwill impaired relating to current
site - - (228)
--------------------------------------- ----------- ----------- ----------
(623) (514) (8,093)
--------------------------------------- ----------- ----------- ----------
Eight sites were closed in December 2011 and one site in June
2011. In addition, one further site was closed in April 2012. The
site closure costs of GBP379k include an additional provision of
GBP933k for future rental commitments, dilapidations and costs in
relation to the 2012 closure, less a reassessment of the provision
for sites closed in 2011 of GBP554k.
The employee settlement of GBP244k in 2012 arose due to a change
in the senior management of the Group.
The redundancy costs relate to amounts paid in 2011 in relation
to the 2011 closures as well as costs in relation to the
centralisation of the Group's finance and administration staff in
Bristol. The site closure costs include GBP471k of asset loss on
disposals and impairments, operating losses since the date of the
closure announcement of GBP800k and provisions made for future
rental commitments, dilapidations and closure costs of GBP4.3m. The
future rental commitments have been subject to a discounted cash
flow calculation using a rate of 5%.
Goodwill relating to the closed sites was impaired in 2011 by
GBP1,274k. In addition, following an assessment of the work
provision at the Gravesend site, which was acquired in February
2008, the goodwill was impaired by the full carrying amount of
GBP228k.
4. Finance income and finance costs
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2012 2011 2011
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ---------- ----------
Finance income
Pension costs (note 9):
- interest on obligation (1,980) (2,009) (4,031)
- expected return on assets 2,008 2,122 4,320
Interest receivable on bank balances - 1 -
28 114 289
-------------------------------------- ----------- ---------- ----------
Finance costs
-------------------------------------- ----------- ---------- ----------
Interest payable on bank balances (2) - -
-------------------------------------- ----------- ---------- ----------
5. Tax expense/(credit)
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2012 2011 2011
GBP'000 GBP'000 GBP'000
----------------------------------------- ----------- ---------- ----------
Current tax:
UK corporation tax 17 602 (102)
Adjustments in respect of prior periods - - (8)
----------------------------------------- ----------- ---------- ----------
17 602 (110)
----------------------------------------- ----------- ---------- ----------
Deferred tax:
On share options - 1 202
Movement relating to pension asset
(IAS 19) 85 130 259
Losses carried forward 283 - (589)
Re-measurement of deferred tax - change
in UK tax rate (101) 39 -
Temporary differences origination
and reversal 164 - 32
----------------------------------------- ----------- ---------- ----------
448 772 (206)
----------------------------------------- ----------- ---------- ----------
6. 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
GBP1,684,000 for the six month period (2011: GBP2,206,000) (12
months to 31 December 2011: net loss GBP2,382,000).
The weighted average number of outstanding shares used for the
basic earnings per share amounted to 43,197,220 (2011: 43,197,220)
(12 months to 31 December 2011: 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
GBP1,684,000 (2011: GBP2,206,000) (12 months to 31 December 2011:
net loss GBP2,382,000).
The weighted average number of outstanding shares used for the
diluted earnings per share amounted to 43,197,220 (2011:
43,197,220) (12 months to 31 December 2011: 43,197,220) and assumes
the exercise of all the share options detailed in note 10 since the
date they were granted and the average market price of GBP0.64. 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
2012 2011 2011
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ----------
Profit/(loss) before tax (as stated) 2,132 2,978 (2,588)
Non-recurring items 623 514 8,093
2,755 3,492 5,505
Tax (expense)/credit (as stated) (448) (772) 206
Tax effect on non-recurring items (153) (103) (1,747)
-------------------------------------- ----------- ----------- ----------
2,154 2,617 3,964
-------------------------------------- ----------- ----------- ----------
Underlying earnings per share 5.0p 6.1p 9.2p
-------------------------------------- ----------- ----------- ----------
7. Dividends
In June 2012, the Company paid a dividend of GBP1,555,100 to its
equity shareholders. This comprised a final dividend in respect of
2011 of 3.6p per share. The directors have declared an interim
dividend of 1.9p per share (2011:1.9p), which will be paid on 5
November 2012 to shareholders on the register at the close of
business on 12 October 2012.
8. Property, plant and equipment
Plant, Equipment
6 months to 30 June 2012 Land Buildings and Computers Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- ---------- ----------------- --------
Carrying amount at 1 January
2012 643 4,540 6,170 11,353
Additions - 128 280 408
Disposals - - (3) (3)
Depreciation - (293) (889) (1,182)
Carrying amount at 30 June
2012 643 4,375 5,558 10,576
-------------------------------- -------- ---------- ----------------- --------
6 months to 30 June 2011
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
-------------------------------- -------- ---------- ----------------- --------
Year to 31 December 2011
Carrying amount at 1 January
2011 643 4,318 7,105 12,066
Additions - 1,228 1,168 2,396
Disposals - (464) (265) (729)
Depreciation - (542) (1,838) (2,380)
-------------------------------- -------- ---------- ----------------- --------
Carrying amount at 31 December
2011 643 4,540 6,170 11,353
-------------------------------- -------- ---------- ----------------- --------
9. 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 2012 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 (2011: GBP1,300,000) to the defined
benefit scheme during the six month period to 30 June 2012 and
GBP2,600,000 in the year to 31 December 2011. 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 2011 and has been updated to 30 June 2012 by a
qualified independent actuary.
30 Jun 2012 30 Jun 2011 31 Dec 2011
---------------------------------------------- ------------------- ------------------- -------------------
The major assumptions used by the actuary % % %
were (in nominal terms):
Discount rate 4.50 5.70 4.80
Rate of increase to pensions in payment 3.00 3.00 3.00
RPI Inflation assumption 2.60 3.40 2.80
CPI Inflation assumption 1.90 2.70 2.10
---------------------------------------------- ------------------- ------------------- -------------------
Assumed life expectancies on retirement at age 65 are:
30 Jun 2012 30 Jun 2011 31 Dec 2011
Current Pensioners Current Pensioners Current Pensioners
----------------------------- --------------- ------------------- ------------------- -------------------
Retiring today: Males 21.3 21.2 21.2
Females 23.9 23.8 23.8
30 Jun 2012 30 Jun 2011 31 Dec 2011
Future Pensioners Future Pensioners Future Pensioners
---------------------- --------- ------------------ ------------------ ------------------
Retiring today: Males 21.0 20.9 20.9
Females 23.6 23.5 23.5
Retiring in 20 years
time: Males 22.9 22.8 22.8
Females 25.5 25.4 25.4
The pre- and post-retirement mortality assumptions use the AC00
and the S1PA tables respectively. The AC00 tables are based on the
mortality experience of life assurance policyholders. The S1PA
mortality tables were published by the Continuous Mortality
Investigation and are based on the mortality experience of members
of self-administered pension schemes over the years 2000 to 2006.
The Company applies an adjustment to the S1PA tables to reflect the
scheme's membership characteristics and assumes future mortality
improvements in line with the medium cohort effect subject to
minimum rates of improvement of 1% per annum.
30 Jun 2012 30 Jun 2011 31 Dec 2011
% GBP'000 % GBP'000 % GBP'000
Equities 8.6% 39,067 8.7% 40,584 8.7% 37,563
Bonds 3.7% 14,078 5.0% 13,204 3.9% 13,093
Property 8.6% 4,674 8.7% 4,653 8.7% 4,704
Other 1.9% 1,287 4.0% 2,357 2.9% 1,796
--------------------------- ----- --------- ----- --------- ----- ---------
Total market value of
assets 59,106 60,798 57,156
Present value of defined
obligations (funded
plans) (86,866) (73,444) (83,251)
--------------------------- ----- --------- ----- --------- ----- ---------
Present value of unfunded
obligations (27,760) (12,646) (26,095)
Unrecognised actuarial
losses 39,507 23,104 37,486
--------------------------- ----- --------- ----- --------- ----- ---------
Net asset in balance
sheet 11,747 10,458 11,391
--------------------------- ----- --------- ----- --------- ----- ---------
Actual return on assets
in period 2,133 1,446 (1,967)
--------------------------- ----- --------- ----- --------- ----- ---------
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
2012 2011 2011
GBP'000 GBP'000 GBP'000
--------------------------------- ---------- ---------- ----------
Benefit obligation at beginning
of period 83,251 73,366 73,366
Interest cost 1,980 2,009 4,031
Actuarial loss/(gain) 3,118 (677) 8,637
Benefits paid (1,483) (1,254) (2,783)
--------------------------------- ---------- ---------- ----------
Balance at end of period 86,866 73,444 83,251
--------------------------------- ---------- ---------- ----------
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
2012 2011 2011
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- ----------
Fair value of scheme assets at
beginning of period 57,156 59,306 59,306
Expected return on scheme assets 2,008 2,122 4,320
Actuarial loss/(gain) 125 (676) (6,287)
Contributions by employers 1,300 1,300 2,600
Benefits paid (1,483) (1,254) (2,783)
---------------------------------- ---------- ---------- ----------
Assets at end of period 59,106 60,798 57,156
---------------------------------- ---------- ---------- ----------
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
2012 2011 2011
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ---------- ----------
Current service cost - - -
Interest on obligation 1,980 2,009 4,031
Expected return on assets (2,008) (2,122) (4,320)
Actuarial loss recognised in period 972 544 1,087
Curtailments and settlements - - -
------------------------------------- ----------- ---------- ----------
944 431 798
------------------------------------- ----------- ---------- ----------
Charged to:
Administrative costs 972 544 1,087
Finance income (28) (113) (289)
------------------------------------- ----------- ---------- ----------
944 431 798
------------------------------------- ----------- ---------- ----------
History of scheme assets, obligations and experience
adjustments
30 Jun 31 Dec 31 Dec 31 Dec 31 Dec
2012 2011 2010 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- --------- ---------
Present value of defined benefit
obligations (86,866) (83,251) (73,366) (73,195) (60,131)
Fair value of scheme assets 59,106 57,156 59,306 52,940 43,668
---------------------------------- --------- --------- --------- --------- ---------
Deficit in scheme (27,760) (26,095) (14,060) (20,255) (16,463)
---------------------------------- --------- --------- --------- --------- ---------
Experience adjustments arising
on scheme liabilities 3,118 8,637 (2,145) 11,284 (6,983)
Experience item as a % of scheme
liabilities 4% 10% (3%) 15% (12%)
Experience adjustments arising
on scheme assets 125 (6,287) 1,841 5,400 (16,019)
Experience item as a % of scheme
assets 0% (11%) 3% 10% (37%)
---------------------------------- --------- --------- --------- --------- ---------
10. Equity
30 June 2012 30 June 2011 31 December 2011
--------------------- ---------------------
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
-------------------------- ----------- -------- ----------- -------- ----------- --------
Share options
Number Number Exercise Exercise
of shares of shares price Period
2012 2011
---------------- ------------ ---------- ---------- --------- ---------
M A Wilmshurst Approved 25,751 25,751 GBP1.165 2009-16
Unapproved 1,096,055 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 25,751 GBP1.165 2009-16
Unapproved 422,973 871,693 GBP1.11 2009-16
----------------------------- ---------- ---------- --------- ---------
1,570,530 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, GBPnil of employee compensation expense has been included in
the consolidated statement of comprehensive income for the six
month period to 30 June 2012 and GBP49,000 in the year to 31
December 2011. The corresponding credit is taken to shareholders'
funds. No liabilities were recognised due to share based
transactions.
2,131,430 TSR options lapsed in 2011 and all share options for D
J Loftus lapsed on 10 April 2012, in conjunction with his
resignation as a director.
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.
11. Distribution to shareholders and further information
The interim report will be distributed to all shareholders and
will be available for the public on the Group's website
(www.narsplc.com) and from the Group's registered office, 17a
Thorney Leys Park, Witney, Oxon, OX28 4GE. Further information
regarding the activities of the Group, including a copy of the
interim presentation, is available on the Group's website
www.narsplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BCGDCSGDBGDL
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