- Login to your account
- Free Membership to Digital Look
- Site Map
- Company A-Z
- Finance A-Z
- News Archive
- Events
- Give Us Feedback
Digital Look
- Company A-Z
- Company Search
- MarketStars Premium
- Portfolios & Watchlists
- Charting
- Screening Tools
- Visual Tools
- Mobile Tools / PDA
- Education Guides
- UK Shares
- Funds
- International Shares
- Bonds
- Currencies
- Commodities
- Covered Warrants
Market Cap
£11.28m
Change Today
Share Price
153.50p
Interim Results
Haynes Publishing Group PLC
31 January 2008
HAYNES PUBLISHING GROUP P.L.C.
INTERIM RESULTS FOR THE 6 MONTHS ENDED
30 November 2007
Haynes Publishing Group P.L.C. is the worldwide market leader in the production
and sale of automotive and motorcycle repair manuals.
Every Haynes manual is based on a complete vehicle strip-down and rebuild in our
workshops, so that the instructions to our customers are inherently practical
and easy to follow.
The Haynes Group publishes many other DIY titles as well as an extensive array
of books about motor sport, vehicles and general transport.
Financial Highlights
- Turnover on continuing operations of £14.4m (2006: £14.5m)
- Operating profit on continuing operations of £2.8m (2006: £3.1m)
- Profit before tax on continuing operations of £2.8m (2006: £3.1m)
- Basic earnings per share from continuing operations of 11.3 pence
(2006: 12.6 pence)
- Net cash of £4.5m (2006: £1.8m)
- Interim dividend declared of 5.0 pence per share (2006: 5.5 pence)
Enquiries :
Haynes Publishing Group P.L.C.
John Haynes OBE, Chairman 01963 442009
Eric Oakley, Group Chief Executive 01963 442009
Blue Oar Securities Plc
Jerry Keen 0207 448 4492
Mike Coe 0117 933 0020
Cautionary Statement :
This report contains certain forward-looking statements with regards the
financial condition and results of the operations of Haynes Publishing Group
P.L.C. These statements and forecasts involve risk factors which are associated
with, but are not exclusive to, the economic and business circumstances
occurring from time to time in the countries and sectors in which the Group
operates. These forward-looking statements are made only as at the date of this
announcement. Nothing in this announcement should be construed as a profit
forecast. Except as required by law, Haynes Publishing Group P.L.C. has no
obligation to update the forward-looking statements or to correct any
inaccuracies therein.
INTERIM STATEMENT
Business overview
In the Group's Interim Management Statement (IMS) released in mid-October, we
updated shareholders as to how trading conditions in the important US automotive
aftermarket were soft and that trading at the start of the second quarter had
continued in a similar manner. It is disappointing to report that these
difficult trading conditions persisted through the second quarter. As a
consequence, US revenue in local currency ended the six month period 3% down on
the comparable period last year. However, the impact of a continuing weak US
Dollar, which averaged $2.03 for the six months to 30 November 2007, against an
average of $1.89 over the same period last year, reduced further US revenue when
translated to Sterling by £0.6 million, increasing the shortfall against last
year to 10%.
In the UK and Europe, the position has been more encouraging. During the period
the UK and European automotive division experienced its fourth consecutive
quarter of year-on-year growth, with revenue of the core Haynes Owners Workshop
Manuals ending the six month period 9% ahead of the comparable period last year.
The UK has also experienced strong growth in its licensing and branded product
division with revenue from this division more than double last year. On a less
positive note, whilst external revenue in the UK's production division ended the
six month period 50% ahead of last year, the characteristic low margins in the
competitive UK print market meant that the UK and European operations suffered a
marked deterioration in the overall contribution from its external printing
operation.
Financial review
Income statement
Group revenue from continuing operations ended the six month period to 30
November 2007 down 1% at £14.4 million (2006: £14.5 million). As mentioned above
the difficult trading conditions in the important US automotive aftermarket
coupled with a continued weak US Dollar had an obvious impact on Group revenue
during the six month period.
Gross profit for the period was £8.5 million, down 8% (2006: £9.2 million). In
the US business, the gross margin percentage ended the period slightly below
last year due to the lower sales of the core automotive manuals. While in the UK
and Europe, the benefits of the improved sales of core manuals and higher income
from the licensing and branded product division were largely offset by the lower
contribution from external printing. The resulting net impact of the above
factors led to an overall decline in the Group's gross margin from continuing
operations to 59.1% (2006: 63.3%).
The Group continues to manage a tight control over its overheads and despite the
increasing cost of fuel and utilities has been able to reduce overheads by 4%
against last year. However, management are conscious of the need to maintain
costs in line with revenue trends and will continue to identify ways of trimming
the cost base of the businesses without impacting operational capabilities.
During the period, net interest receivable from cash deposits increased by 83%
to £106,000 (2006: £58,000). The Group's cash generation remains strong and the
increased deposit interest receivable benefited from the higher cash balances
following the disposal of Sutton Publishing in January 2007 coupled with the
higher deposit rates during the period.
The charge to taxation has been based on an estimated effective tax rate for the
12 months to 31 May 2008 of 34.7% (2006: 33.7%). From April 2008 the UK
corporation rate reduces from 30% to 28% and as a consequence, the UK's deferred
tax balances have been adjusted to reflect this change.
Basic earnings per share from continuing operations were 11.3 pence (2006: 12.6
pence).
Balance sheet and cash flow
During the six month period, expenditure on property, plant and equipment
increased to £1.7 million (2006: £0.2 million). The increased expenditure was
principally in relation to the purchase of new freehold premises in Sydney,
Australia for A$2.3 million (£1.0 million) exclusive of taxes, to house the
newly combined Australian businesses as well as £0.3 million of investment in
customer display stands, mainly in the US.
The net cash inflow from continuing operations was £3.4 million (2006: £3.8
million). During the period, inventory levels increased by £0.3 million, this
following the acquisition of Bookworks in June 2007 which increased inventory
levels by £0.5 million. The Group's IAS 19 pension scheme deficit ended the
period at £7.0 million, marginally ahead of the £6.9 million as at 31 May 2007.
However, there has been a marked improvement in the position since November
2006, when the pension scheme deficit stood at £11.7 million.
Interim dividend
Following the £3.0 million cash in-flow from the disposal of Sutton Publishing
in January 2007, the Group's net cash position has more than doubled since this
time last year. However, trading remains difficult and with the pressures being
placed on lenders the Board feels it is appropriate, at this point in time, to
conserve cash within the business to focus on growing the Haynes Group whether
through acquisition, geographical expansion or organic growth. Accordingly, the
Board is recommending an interim dividend of 5.0 pence per share (2006: 5.5
pence).
The payment of the interim dividend will be made on 22 April 2008 to
shareholders on the register at the close of business on 25 March 2008, the
shares being declared ex-dividend on 19 March 2008.
Operational Review
North America and Australia
As previously mentioned, the core North American automotive aftermarket
experienced soft trading conditions throughout the first six months of the
financial year. This had an adverse impact on sales with US revenue, in local
currency, ending the period down 3% at $15.7 million (2006: $16.2 million).
However, the weak US Dollar has had an even more significant impact on the
results of the US operation when translated to Sterling, with the average US
Dollar exchange rate against Sterling 8% weaker than the equivalent period last
year, reducing US revenue by £0.6 million and profit before tax by £0.2 million.
The amalgamation of the newly acquired Bookworks businesses with the existing
Haynes Australian operation is close to completion. The new combined Australian
operation, located in Sydney, New South Wales is well positioned to grow the
business in this region and sales from the enlarged combined operation ended the
period, in US Dollars, $0.9 million ahead of last year.
The new US website came on line shortly before the end of the last quarter and
very quickly saw traffic to the website increase significantly. Sales from the
website, whilst still modest in volume terms, are starting to grow and the new
improved site provides the US business with an important channel to communicate
with consumers.
The net impact of the above factors left the North American and Australian
business with a segmental profit in local currency down 11%. However, after
translation to Sterling, segmental profit ended the period at £2.2 million
(2006: £2.7 million), down 19%.
UK and Europe
Revenue from the UK and European operations ended the period 13% ahead of the
comparative six month period. Sales of the core Haynes manuals had another
strong quarter, with revenue ending the six month period 9% ahead of last year.
Sales of our core Manuals also performed well in Scandinavia and although sales
during the second quarter did not match the 10% increase experienced in the
first three months of the financial year, revenue still ended the six month
period 3% ahead of last year.
Revenue in the Haynes Book Division ended the six month period marginally ahead
of last year. This was another strong performance by the Book Division, with
sales of the Motor Racing Season Reviews once again featuring in the top five
selling titles and the Haynes Spitfire Manual, the first title to be released in
the co-publishing programme with the RAF, ending the period as the Division's
top selling title.
The Haynes licensing division has made considerable progress since its inception
eighteen months ago. The revenue from this division, whilst modest in Group
terms, is derived from a list of prestigious licensing partners which now
include Next, Lee Cooper, Pyramid Posters and Trends. The launch of the new
Haynes combustion engine toy, in late October, has sold well in the run up to
Christmas and will hopefully be the first of a range of toys aimed at educating
our younger customers that DIY can be fun.
As mentioned earlier in the statement, the UK's production division had a
difficult six months of trading. Despite an increase in the volume of external
production passing through the plant, the low margins in this part of the
business have had an adverse impact on the profitability of the UK and European
businesses.
As a result of the above factors, UK and European segmental revenue from
continuing operations increased to £6.7 million (2006: £5.9 million). However,
whilst the UK and European businesses benefited from the higher revenue, the
lower margins from the external printing meant that the increase in segmental
profit was all but eroded ending the period at £0.6 million (2006: £0.6
million).
Future outlook
In the Haynes US business there are no clear signs that difficult market
conditions experienced in the first half of the year are set to improve
significantly during the second six months. However, with continued marketing
initiatives and a price increase effective from 1 January 2008, management will
be making every effort to recover some of the shortfall experienced in the first
half.
In the UK, reports of a mixed Christmas trading period for retailers and an
expectation of a further slow down in consumer spending is a concern. However,
sales of the Haynes manuals have been performing well and the focus will
continue on developing product and marketing initiatives aimed at growing sales
of the core Haynes Manuals.
Responsibility statement
Pages 18 and 19 of the Annual Report & Accounts for the financial year ended 31
May 2007 provide details of the serving Board Directors and there have been no
changes during the six months to 30 November 2007. A copy of recent Annual
Report & Accounts can be found on the Haynes website www.haynes.co.uk/investor .
The 31 May 2007 Annual Report & Accounts also provide a statement of the
Directors' responsibilities on page 35.
The Board confirm that to the best of its knowledge:
• The condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the European Union.
• The Interim management report includes a fair review of the information
required by the Disclosure and Transparency Rules (DTR).
J H Haynes, OBE
Chairman of the Board
30 January 2008
Consolidated Income Statement (unaudited)
6 months to Year ended
30 Nov 2007 30 Nov 2006 31 May 2007
£'000 £'000 £'000
Continuing operations
Revenue (note 2) 14,391 14,492 29,202
Cost of sales (5,888) (5,321) (10,498)
Gross profit 8,503 9,171 18,704
Other operating income 73 17 53
Distribution costs (3,386) (3,549) (7,437)
Administrative expenses (2,440) (2,493) (4,169)
Operating profit 2,750 3,146 7,151
Finance income (note 4) 758 528 1,104
Finance costs (note 5) (669) (579) (1,174)
Profit before taxation 2,839 3,095 7,081
Taxation (note 6) (985) (1,042) (1,913)
Profit for the period from continuing operations 1,854 2,053 5,168
Discontinued operations
Loss for the period from discontinued operations (note 7) - (2,945) (2,946)
Profit/(loss) for the period attributable to the equity 1,854 (892) 2,222
holders of the parent
Earnings per 20p share - pence
Earnings per share from continuing operations
- Basic 11.3 12.6 31.6
- Diluted 11.3 12.6 31.6
Earnings/(loss) per share from continuing and discontinuing
operations
- Basic 11.3 (5.5) 13.6
- Diluted 11.3 (5.5) 13.6
Loss per share from discontinued operations
- Basic - (18.0) (18.0)
- Diluted - (18.0) (18.0)
Consolidated Statement of Recognised Income and Expense (unaudited)
6 months to Year ended
30 Nov 2007 30 Nov 2006 31 May 2007
£000 £000 £000
Exchange differences on translation of foreign operations (650) (822) (940)
Actuarial gains/(losses) on retirement benefit obligation
- UK Scheme 532 (3,242) 474
- US Scheme (494) 85 919
Deferred tax on retirement benefit obligation
- UK Scheme (149) 973 (142)
- US Scheme 197 (34) (368)
Deferred tax arising on change in UK tax rate (115) - -
Net expense recognised directly in equity (679) (3,040) (57)
Profit/(loss) for the financial period 1,854 (892) 2,222
Total recognised income/(expense) for the financial period 1,175 (3,932) 2,165
Consolidated Balance Sheet (unaudited)
30 Nov 2007 30 Nov 2006 31 May 2007
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 8,183 6,838 6,763
Intangible assets 4,338 4,383 4,359
Deferred tax assets 2,749 4,378 2,802
15,270 15,599 13,924
Current assets
Inventories 11,296 11,008 10,810
Trade and other receivables 9,361 10,231 9,801
Cash and cash equivalents 4,546 3,761 6,478
Total current assets 25,203 25,000 27,089
Assets classified as held for sale - 2,762 -
25,203 27,762 27,089
Total assets 40,473 43,361 41,013
Current liabilities
Trade and other payables (3,815) (4,665) (3,857)
Tax liabilities (616) (698) (879)
Bank overdrafts - (1,974) -
Total current liabilities (4,431) (7,337) (4,736)
Liabilities directly associated with assets - (14) -
classified as held for sale
(4,431) (7,351) (4,736)
Non-current liabilities
Deferred consideration (130) (203) (135)
Deferred tax liabilities (550) (506) (384)
Retirement benefit obligation (note 13) (6,973) (11,650) (6,909)
Total non-current liabilities (7,653) (12,359) (7,428)
Total liabilities (12,084) (19,710) (12,164)
Net assets 28,389 23,651 28,849
Equity (note 14)
Share capital 3,270 3,270 3,270
Share premium 638 638 638
Retained earnings 26,473 20,967 26,283
Foreign currency translation reserve (1,992) (1,224) (1,342)
Total equity 28,389 23,651 28,849
Consolidated Cash Flow Statement (unaudited)
6 months to Year ended
30 Nov 2007 30 Nov 2006 31 May 2007
£'000 £'000 £'000
Net cash generated from operating activities
- Continuing operations (note 11) 3,438 3,789 7,889
- Discontinued operations (note 11) - (861) (583)
Cash generated by operations 3,438 2,928 7,306
Tax paid (1,212) (1,809) (2,505)
Interest received 106 58 161
Interest paid - (4) (29)
Retirement benefit obligation 115 (34) (332)
Net cash generated from operation activities 2,447 1,139 4,601
Investing activities
Proceeds from sale of property, plant and equipment 16 - -
Disposal of subsidiary - - 2,780
Closure of operation - - (141)
Purchases of property, plant and equipment (1,735) (184) (500)
Acquisition costs :
- Business operation (660) - -
- Deferred consideration (7) (122) (208)
Net cash used in investing activities (2,386) (306) 1,931
Financing activities
Dividends paid (1,635) (1,635) (2,534)
Net cash used in financing activities (1,635) (1,635) (2,534)
Net (decrease)/increase in cash and cash equivalents (1,574) (802) 3,998
Cash and cash equivalents at beginning of year 6,478 3,077 3,077
Effect of foreign exchange rate changes (358) (488) (597)
Cash and cash equivalents at end of period 4,546 1,787 6,478
Notes to the Interim Results
1. Basis of accounting
The financial statements for the six months ended 30 November 2007 and 30
November 2006 and for the twelve months ended 31 May 2007 do not constitute
statutory accounts for the purposes of Section 240 of the Companies Act 1985.
The financial information in relation to the year ended 31 May 2007 is abridged
from the Company's Annual Report and Consolidated Financial Statements, a copy
of which has been delivered to the Registrar of Companies. The auditors' report
on those accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain a statement under Section 237(2) or (3) of the
Companies Act 1985. The 30 November 2007 statements were approved by a duly
appointed and authorised committee of the Board of Directors on 30 January 2008
and are unaudited.
The financial statements for the six months ended 30 November 2007 includes the
following accounting policy in relation to acquired intangible assets :-
An intangible asset acquired as part of a business combination is recognised as
an asset if it is separately identifiable from the acquired business or arises
from contractual or legal rights, is expected to generate future economic
benefit and its fair value can be measured reliably. An acquired intangible
asset with a finite life is amortised on a straight-line basis so as to charge
its cost, which represents its fair value at the acquisition date, to the income
statement over its expected useful life. An acquired asset with an indefinite
life is not amortised but is tested annually for impairment and carried at cost
less any recognised impairment losses.
The intangible assets which were acquired through the acquisition of Bookworks
in June 2007 and which relate to trademarks and copyright are deemed to have
indefinite lives.
Apart from the inclusion of the new accounting policy above, the financial
statements have been prepared in accordance with the accounting policies set out
in the 2007 Annual Report and Accounts. Along with IFRS 7 'Financial
Instruments: Disclosures' and the amendment to IAS 1 'Capital Disclosures', both
of which are first effective for accounting periods commencing on or after 1
January 2007, these are the accounting policies which are expected to be
followed in the preparation of the full financial statements for the financial
year ended 31 May 2008.
The financial information has been prepared in accordance with the Disclosure
and Transparency rules of the Financial Services Authority and with
International Accounting Standard (IAS) 34 'Interim Financial Reporting' as
endorsed by the European Union.
2. Revenue
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Turnover by geographical destination on continuing operations :
United Kingdom 5,217 4,282 9,510
Rest of Europe 1,052 1,104 2,054
United States of America 6,598 7,863 15,213
Rest of World 1,524 1,243 2,425
Total consolidated turnover 14,391 14,492 29,202
3. Segmental analysis
For management purposes, the Group is currently organised into two geographical
operating segments. These geographical segments are the basis on which the Group
reports its primary segment information.
The principal activities of the two primary segments are as follows :-
• The origination, production and sale of automotive repair manuals in the
UK and Europe
• The origination, production and sale of automotive repair manuals in North
America and Australia
Analysis of results by geographical segment:
Eliminations/
North Reclassification
UK America Discontinued of discontinued
& Europe & Australia Operations Operations Consolidated
6 months to 6 months to 6 months to 6 months to 6 months to
30 Nov 30 Nov 30 Nov 30 Nov 30 Nov
2007 2007 2007 2007 2007
£'000 £'000 £'000 £'000 £'000
Revenue
External sales 6,682 7,709 - - 14,391
Inter-segmental sales (1) 114 340 - (454) -
Total revenue 6,796 8,049 - (454) 14,391
Result
Segment operating profit 597 2,248 - - 2,845
Unallocated head office income less expense (95)
Finance income 758
Finance costs (669)
Consolidated profit before tax 2,839
Eliminations/
North Reclassification
UK America Discontinued of discontinued
& Europe & Australia Operations Operations Consolidated
6 months to 6 months to 6 months to 6 months to 6 months to
30 Nov 30 Nov 30 Nov 30 Nov 30 Nov
2006 2006 2006 2006 2006
£'000 £'000 £'000 £'000 £'000
Revenue
External sales 5,917 8,575 2,038 (2,038) 14,492
Inter-segmental sales (1) 108 383 764 (1,255) -
Total revenue 6,025 8,958 2,802 (3,293) 14,492
Result
Segment operating profit 558 2,659 - - 3,217
Unallocated head office income less expense (71)
Finance income 528
Finance costs (579)
Consolidated profit before tax 3,095
(1) Inter-segmental sales are charged at the prevailing market rates
Eliminations/
North Reclassification
UK America Discontinued of discontinued
& Europe & Australia Operations Operations Consolidated
Year ended Year ended Year ended Year ended Year ended
31 May 31 May 31 May 31 May 31 May
2007 2007 2007 2007 2007
£'000 £'000 £'000 £'000 £'000
Revenue
External sales 11,755 17,447 2,600 (2,600) 29,202
Inter-segmental sales (1) 231 849 890 (1,970) -
Total revenue 11,986 18,296 3,490 (4,570) 29,202
Result
Segment operating profit 1,086 5,865 (100) 100 6,951
Unallocated head office income less expense 200
Finance income 1,104
Finance costs (1,174)
Consolidated profit before tax 7,081
(1) Inter-segmental sales are charged at the prevailing market rates
4. Finance income
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Interest receivable on bank deposits 106 58 161
Expected return on pension scheme assets 652 470 943
758 528 1,104
5. Finance costs
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Finance costs can be analysed as follows:
Interest payable on bank loans and overdrafts - - 29
Interest charge on pension scheme liabilities 669 583 1,170
669 583 1,199
Less: Amounts included in profit from discontinued operations - (4) (25)
669 579 1,174
6. Taxation
The charge for taxation for the six months ending 30 November 2007 has been
based on an estimated full year effective tax rate of 34.7% (30 November 2006:
33.7%) The rate reflects the significant proportion of profit generated by
overseas subsidiaries with a higher corporate tax rate and an adjustment to the
UK's deferred tax calculations to reflect the reduction in UK corporation tax
rates from April 2008.
7. Discontinued operations
On 24 November 2006 the Group announced the closure of its French operation,
Editions Haynes SARL and this was followed on 24 January 2007 by the sale of
Suttons Publishing Limited for a consideration of £3.0 million in cash.
8. Acquisition
On 5 June 2007, the Board announced the acquisition of certain assets and
liabilities including finished goods inventory, work in progress, intellectual
property and equipment from Bookworks Pty Ltd, Rellim Pty Ltd, Motordata Pty Ltd
and Stan H Earle Pty Ltd all private Australian companies in the book
origination, printing and distribution business. The total consideration for the
acquisition was A$1.5 million (£0.6 million).
Given the proximity of the acquisition to the date of the publication of the
Consolidated Financial Statements for the year ended 31 May 2007 it was not
possible to determine the fair values of any intangible assets arising on the
acquisition. Accordingly, provisional fair values were included in these
Consolidated Financial Statements. Following a review undertaken post
acquisition, intangible assets of £144,000 (A$334,000) have been identified in
relation to the trademarks (£26,000) and copyrights (£118,000) held by the
Bookworks companies.
The table below shows the fair values arising on the acquisition :
Carrying value Recognised on
acquisition
£'000 £'000
Assets acquired
Property, plant and equipment 75 105
Intangible assets - 144
Inventories 504 540
Other creditors (40) (40)
Deferred tax arising on recognition of intangible assets - (49)
Fair value of net assets 539 700
Excess of acquirer's interest in the net fair value of the identifiable (40)
assets and liabilities over cost
Total consideration 660
Consideration 606
Costs associated with the acquisition 54
Total consideration 660
The cash outflow on acquisition was as follows :
Cash paid 660
Net cash outflow 660
In August 2007 new premises in Sydney, Australia were acquired for a
consideration of A$2.3 million (£1.0 million) exclusive of taxes, which has
enabled the Group's Australian businesses to be combined and operate from one
location. As a result of the amalgamation during the period it is impracticable
to determine the amount of profit for the period, which would have been derived
solely from the newly acquired business as required by Paragraph 67(i) of IFRS 3
'Business Combinations'.
Paragraph 70 (a) and (b) of IFRS 3 requires an acquirer to disclose the Group
revenue and Group profit attributable to equity holders of the parent, as if the
acquisition had been effected at the beginning of the financial period. However,
as the acquisition of the Bookworks businesses was completed at the beginning of
the financial period there is no difference between the basis as required under
IFRS 3 above and that shown in the Consolidated Income Statement.
The excess of the acquirer's interest in the net fair value of the identifiable
assets and liabilities over cost of £40,000 has been included within other
operating income in the Consolidated Income Statement.
9. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following :-
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Earnings :
Profit after tax - continuing operations 1,854 2,053 5,168
Profit after tax - discontinuing operations - (2,945) (2,946)
Profit after tax - all operations 1,854 (892) 2,222
No. No. No.
Number of shares :
Weighted average number of shares 16,351,540 16,351,540 16,351,540
As at 30 November 2007, 31 May 2007 and 30 November 2006 there were no
potentially dilutive shares in issue on either of the Company's two classes of
shares. Accordingly, there is no difference between the weighted average number
of shares used in the basic and diluted earnings per share calculation.
10. Dividends
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Amounts recognised as distributions to equity holders :
Final dividend of 10.0p per share (2006: 10.0p) 1,635 1,635 1,635
Interim dividend of 5.5p per share - - 899
1,635 1,635 2,534
An interim dividend of 5.0p per share (2006: 5.5p) amounting to £817,577 (2006:
£899,335) has been declared during the period but has not been reflected in the
interim accounts. The payment of the interim dividend will be made on 22 April
2008 to shareholders on the register at the close of business on 25 March 2008.
The shares will be declared ex-dividend on 19 March 2008.
11. Cash flow analysis
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Cash flows from operating activities - continuing
Profit after tax 1,854 2,053 5,168
Adjusted for :
Income tax expense 985 1,042 1,913
Interest payable and similar charges - - 4
Interest receivable (106) (58) (161)
Excess of acquirer's interest in the net fair value of the identifiable (40) - -
assets and liabilities over cost
IAS 19 pension charge for defined benefit scheme 17 109 227
Operating profit 2,710 3,146 7,151
Depreciation on property, plant and equipment 329 374 735
Gain/(loss) on disposal of property, plant and equipment (14) - -
3,025 3,520 7,886
Changes in working capital :
(Increase)/decrease in inventories 54 (116) (215)
(Increase)/decrease in receivables 440 (204) 526
Increase/(decrease) in payables (81) 589 (308)
3,438 3,789 7,889
Cash flows from operating activities - discontinuing
Loss after tax - (2,945) (2,946)
Adjusted for :
Interest payable and similar charges - 4 25
Loss on disposal of subsidiary - - 2,288
Closure of operation - - 533
Operating loss - (2,941) (100)
Depreciation on property, plant and equipment - 20 22
Write-down of assets for sale to fair value less costs to sell - 2,316 -
- (605) (78)
Changes in working capital :
(Increase)/decrease in inventories - (266) (235)
(Increase)/decrease in receivables - 57 (280)
Increase/(decrease) in payables - (47) 10
- (861) (583)
12. Analysis of the changes in net funds
As at As at
1 June Exchange 30 Nov
2007 Cashflow movements 2007
£'000 £'000 £'000 £'000
Cash at bank and in hand 6,478 (1,574) (358) 4,546
6,478 (1,574) (358) 4,546
13. Retirement benefit obligation
The Group operates a number of different retirement programmes in the countries
within which it operates. The principal pension programmes are a contributory
defined benefit scheme in the UK and a non contributory defined benefit plan in
the US. The assets of all schemes are held independently of the Group and its
subsidiaries.
During the period the financial position of the above pension arrangements have
been updated in line with the anticipated annual cost for current service, the
expected return on scheme assets, the interest on scheme liabilities and cash
contributions made to the schemes.
The last full IAS 19 actuarial valuation was carried out by a qualified
independent actuary as at 31 May 2007 and this valuation has been updated by the
Scheme's actuaries on an approximate basis to 30 November 2007.
The movements in the retirement benefit obligation were as follows :-
6 months to Year ended
30 Nov 30 Nov 31 May
2007 2006 2007
£000 £000 £000
Retirement benefit obligation at beginning of period (6,909) (8,517) (8,517)
Movement in the period :
- Total expenses charged in the income statement (575) (692) (1,330)
- Contributions paid 443 617 1,435
- Actuarial gains/(losses) taken directly to reserves 38 (3,157) 1,393
- Foreign currency exchange rates 30 99 110
Retirement benefit obligation at end of period (6,973) (11,650) (6,909)
14. Consolidated statement of changes in equity
Foreign
exchange
Share Share translation Retained
capital premium reserve earnings Total
£'000 £'000 £'000 £'000 £'000
Current interim period :
Balance at 1 June 2007 3,270 638 (1,342) 26,283 28,849
Profit for the period - - - 1,854 1,854
Currency translation adjustments - - (650) - (650)
Actuarial gains/(losses) on defined benefit plans - - - (29) (29)
(net of tax)
Dividends - - - (1,635) (1,635)
Balance at 30 November 2007 3,270 638 (1,992) 26,473 28,389
Prior interim period :
Balance at 1 June 2006 3,270 638 (402) 25,712 29,218
Profit for the period - - - (892) (892)
Currency translation adjustments - - (822) - (822)
Actuarial gains/(losses) on defined benefit plans - - - (2,218) (2,218)
(net of tax)
Dividends (1,635) (1,635)
Balance at 30 November 2006 3,270 638 (1,224) 20,967 23,651
Prior year :
Balance at 1 June 2006 3,270 638 (402) 25,712 29,218
Profit for the period - - - 2,222 2,222
Currency translation adjustments - - (940) - (940)
Actuarial gains/(losses) on defined benefit plans - - - 883 883
(net of tax)
Dividends - - - (2,534) (2,534)
Balance at 31 May 2007 3,270 638 (1,342) 26,283 28,849
15. Exchange rates
The foreign exchange rates used in the financial statements to consolidate the
overseas subsidiaries are as follows (local currency equivalent to £1):
Period End Rate Average Rate
30 Nov 30 Nov 31 May 30 Nov 30 Nov 31 May
2007 2006 2007 2007 2006 2007
US Dollar 2.06 1.97 1.98 2.03 1.89 1.93
Euro 1.40 1.48 1.47 1.45 1.47 1.48
Swedish Krona 13.14 13.46 13.67 13.46 13.57 13.61
16. Capital expenditure
Property, plant
and equipment
£'000
Net book values at 1 June 6,763
Exchange rate movements (89)
Additions 1,735
Additions resulting from business combinations 105
Disposals (2)
Depreciation and amortisation (329)
8,183
The property, plant and equipment additions include £1.0 million (A$2.3 million)
for the purchase of new freehold premises in Sydney, Australia and £0.3 million
of investment in customer display stands.
17. Related party transactions
During the six months to 30 Nov 2007 there were no material related party
transactions.
18. Principal risks and uncertainties
The Board is primarily responsible for identifying and monitoring risk and the
manner in which the Board manages this process is outlined in the Corporate
Governance report on page 28 of the Group's Annual Report, a copy of which is
available on the Group's website www.haynes.co.uk/investor.
The principal financial risks and uncertainties affecting the Group for the
remaining six months of the year are outlined in the Interim Statement on pages
2 to 4 of this report.
19. Other information
A copy of this half-year report will be distributed to all shareholders and will
also be available to members of the public from the Company's registered office
at Sparkford, Near Yeovil, Somerset BA22 7JJ. A copy of the interim report will
also be available on the UK website at www.haynes.co.uk/investor.
INDEPENDENT REVIEW REPORT TO HAYNES PUBLISHING GROUP P.L.C.
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
November 2007 which comprises a consolidated income statement, consolidated
statement of recognised income and expense, consolidated balance sheet,
consolidated cash flow statement and related notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34, ''Interim Financial Reporting'', as
adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting its responsibilities in respect to half-yearly
financial reporting in accordance with the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority and for no other purpose. No
person is entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose of our terms
of engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to any
other person or for any other purpose and we hereby expressly disclaim any and
all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'', issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 November 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34, as
adopted by the European Union, and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
BDO Stoy Hayward LLP
Chartered Accountants
Southampton
30 January 2008
This information is provided by RNS
The company news service from the London Stock Exchange