Clyde Process Solutions plc - Interim Results
| Press Release | 25 November 2009 |
Clyde Process Solutions plc
(“CPS” or the “Group”)
Interim Results
Clyde Process Solutions plc (AIM: CPSP), a global provider of pneumatic conveying and air filtration solutions for process industries, announces its interim results for the six months ended 31 August 2009, a period in which the Group has delivered a record performance in what remains a challenging economic environment.
Financial highlights
First half performance ahead of expectations
| Group revenue up 6% to £38.5 million (2008: £36.2 million) | |
| Operating profit before exceptionals up 46% to £4.1 million (2008: £2.8 million) | |
| Cash from operations of £2.4 million (2008: £2.2 million) | |
| Profit before tax up 55% to £3.1 million (2008: £2.0 million) | |
| EBITDA up 44% to £4.6 million (2008: £3.2 million) |
No dividend proposed as the Group seeks to retain cash in the business to strengthen itsbalance sheet
Operational highlights
Broadened geographical footprint by the recruitment of sales agents in high growthterritories such as North Africa, South East Asia and China
Strong order book conversion supported by a healthy pipeline of sales prospects
Strong cash generative performance from operations
Updated sustainable, long-term banking facility, which is in place to 2013
Launch of a new test facility in Kansas City complemented by rapid product development capabilities
Commenting on the results, Jim McColl, Chairman of Clyde Process Solutions plc said:
“I am pleased to report that the Group has delivered a record performance for the period.This is a fantastic result given that trading conditions continue to be challenging across many of our key customer markets. Previous years have seen our second half outperform the first half, however, we expect this financial year to be different due to the outstanding result of the first half.
The business is well positioned to manage the impact of the economic climate through its well diversified strategy across key customer markets, technologies and geographical territories. We remain diligent in focusing on customer contact, controlling costs, credit control procedures and managing cash.
I am pleased with the strong progress made in converting order book to revenue and our focus remains on converting a healthy pipeline of sales opportunities during the remainder of the financial year.We therefore believe that the Group is well positioned to meet current market expectations for the year.”
- Ends -
For further information please contact:
| Clyde Process Solutions plc | |
| Alex Stewart, Chief Executive | Tel: +44 (0) 1355 575 000 |
| | www.clydeprocesssolutions.com |
| Nominated Adviser | |
| Stuart Lane / Antony Legge | Tel: +44 (0) 207 448 4400 |
| Astaire Securities plc | |
| Broker | |
| Chris Hardie | Tel: +44 (0) 207 398 1600 |
| Arden Partners | |
Media enquiries:
| Abchurch | |
Sarah Hollins / George Parker | Tel: +44 (0) 20 7398 7719 |
Chairman’s and Chief Executive’s Statement
The Group has delivered a record performance for the six month period to 31 August 2009 in what remains a challenging economic environment. Despite these challenges, we have continued to grow revenue, profit and earnings through the implementation of a well diversified strategy across key customer markets, technologies and geographical territories. We have also remained diligent in focusing on customer contact, controlling costs, credit control procedures and managing cash.
Customers’ capital investment decisions continue to be uncertain to predict and have impacted Group order intake and order book levels. However, the management team has worked tirelessly to communicate the return on investment that can be generated from its range of economically enhancing, environmentally beneficial pneumatic conveying and air filtration solutions.
This has, in recent weeks, led to a number of contracts being secured, notably within the cement and steel markets. Whilst these markets have seen demand for products decline as a result of the economic environment, we have responded by initiating a series of targeted, customer-focused strategies which have ensured that when customers within these markets released budgets, their investment has been placed with CPS.
Revenue and business activity for the Group has been ahead of management expectations during the period under review. We are pleased with the strong progress made in converting order book to revenue and we remain focused on converting the healthy pipeline of sales opportunities during the remainder of this financial year.
Strategy
Diversification has formed an integral element of the Group’s strategy during the first six months of the year. Our ability to focus on a wide array of key customer markets, utilising a sector-leading range of pneumatic conveying and air filtration solutions across our five geographical areas of operation has been critical to our performance.
The order book comprises of contracts from primarily the food, chemicals, metals, grain and minerals markets. Significant focus has also been placed in building momentum within the petrochemical industry and initiating the development of new solutions for this market.
The global integration of our air filtration technologies has made strong progress during the period under review. Contracts for this range of technology have been secured within North America, South America and Europe, with dedicated filtration expertise being recruited for the European market to help support sales strategies in this territory. We have also strengthened our geographical footprint in recent months, having recruited sales agents to complement existing sales efforts in high growth territories such as North Africa, South East Asia and China.
The current economic environment also requires the continued diligence of the management team in managing customer contact, costs, credit control and cash. These well diversified initiatives will continue to be driven forward by the Group during the remainder of this financial year in an effort to maintain growth.
Trading
Our success in converting the order book to revenue is demonstrated by comparing first half revenues of £38.5 million to the order book at the end of April, which was £32.0 million. In contrast, the Group order book, as at 31 August 2009, stood at £22.8 million, down 34% on the same prior year period (2008: £34.5 million). The 2009 figure includes £1.2 million of postponed orders from a European steel plant.Previous years have seen the second half outperform the first half, however, whilst we are resolutely focused on enhancing the order book for the remainder of this financial year, this financial year is expected to be an exception to this trend as a result of the outstanding first half.
Over 50% of the Group’s order intake has stemmed from two key customer markets, namely food and chemicals. CPS has made significant progress in not only securing orders against strong competition in these markets but also developing strategic relationships with key customers. In North America, for example, we have secured approved supplier status with one of the world’s leading chemical producers and anticipate a strengthening of orders from this customer as a result of this recognition.
We continue to invest in research and development projects, which included the launch of a new test facility in Kansas City and recently completed the rapid product development of a new air filtration solution in North America. Over a period of one week, a team of personnel based in our facility in Sabetha, Kansas took a filtration solution from concept to prototype. This solution has been developed to provide a lower headroom, lower energy and lower maintenance design to the leading provider in the industry. This new product has now been showcased at a leading filtration conference in Europe.
Earlier this year, the Board felt it appropriate to renegotiate the financial covenant calculations within the Group’s banking facility in order to provide long-term funding and suitable levels of headroom given the backdrop of the current economic environment. This updated facility has provided the business with prudent levels of headroom as it continues to develop and grow globally. This arrangement incurred a one-off charge of £0.4 million.
Operating profit has risen to £4.1 million, up 46% (2008: £2.8 million). Margins have continued to perform strongly during the period under review.
This result has been enhanced through the successful resolution of a long running contractual dispute with a Turkish producer of fertilizer products, which has contributed £0.5 million to the operating profit following release of the bad debt provision previously held against this debt.
Net finance costs were £1.0 million (2008: £0.4 million) and included the £0.4 million arrangement fee for the renegotiated facility, £0.4 million interest received on the payment from the long running contractual dispute in Turkey, referred to above, and interest being charged on the facility at margins which have increased by 0.75%, with effect from 1 July 2009.
Currency movements continue to impact the Group predominately through a declining US dollar against UK sterling. However, as a result of the hedging strategies in place the effect on the profit for the period has not been significant.
The business has generated strong cash from its operations of £2.4 million (2008: £2.2 million) as we continue to manage working capital effectively and receive advanced payments from our customers. This is being supported by a sustainable, long-term banking facility, which is in place to 2013.
Principal risks
Each of our principal operating companies considers their risk profile and identifies actions to mitigate those risks. These risk profiles are updated regularly and, at a minimum, annually. The Group’s principal risks and uncertainties are largely unchanged from those set out in detail in our last Annual Report. The risks considered particularly relevant to the remaining six months of this financial year are, however, foreign exchange rate movements and customer credit risk.
A continuation or reversal of the recent trend of large movements in certain exchange rates could have an impact on the Group results. However, the hedging strategies that are in place will continue to mitigate this. While we have seen little evidence in the first half of 2009 that the difficult economic climate around the world is affecting the financial stability of our major customers, credit risk continues to be closely monitored.
Dividend
The Board, last year, paid an interim dividend to shareholders. However, given the continued challenging economic environment, the Board has taken the prudent view to retain cash in the business to strengthen the Group’s balance sheet.
Therefore, the Board will not be recommending an interim dividend to shareholders but plans to revert to a progressive dividend policy, subject to the availability of distributable reserves, and the retention of funds required to finance future growth, once the economic climate improves and the Group has benefited from this renewed growth.
Outlook
While trading conditions continue to be challenging across many key customer markets, the business is well positioned to manage the impact of the economic climate through a well diversified strategy, complemented by initiatives focused on customer contact, costs, credit and cash.
The short-term outlook for the Group is underpinned by a healthy sales pipeline of opportunities. We have developed and implemented specific targeted, customer-focused strategies to ensure that when decisions are made for capital investment projects, customers will select CPS due to the significant economic and environmental returns our technologies can generate. The business has been buoyed by the recent upturn in activity within the metals and minerals markets and is well positioned to benefit.
The Board believes the medium to long-term outlook for the Group remains positive across all global key customer markets. The Group’s growing, global capabilities to provide these markets with economically enhancing, environmentally beneficial pneumatic conveying and air filtration solutions will become of key, strategic importance when trading conditions improve.
The Board is pleased with the record revenue, profit and earnings the Group has generated during this period and is providing significant support to ensure this momentum is carried through to the year end.
Order conversion and execution have been communicated as key priorities for all Group subsidiary companies for the remainder of this financial year. Whilst the Board anticipates trading conditions to remain challenging during this financial year, it believes that it should be well positioned to meet current market expectations for the year.
Jim McColl | Alex Stewart |
Chairman | Chief Executive |
25 November 2009 |
Consolidated Income Statement
for the 6 months ended 31 August 2009
Earnings per share for profit attributable to the equity holders of the Company during the period
| Basic earnings per share | 6 | 5.35p | 3.82p | 9.91p |
| Diluted earnings per share | 6 | 5.31p | 3.34p | 9.28p |
The accompanying notes are an integral part of this interim report.
Consolidated Statement of Comprehensive Incomefor the 6 months ended 31 August 2009 The accompanying notes are an integral part of this interim report.
Consolidated Balance Sheet
at 31 August 2009
| 31 August 2009 (unaudited) | 31 August 2008 (unaudited) | 28 February 2009 (audited) | ||
| Note | £’000 | £’000 | £’000 | |
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 54,559 | 49,573 | 61,667 | |
| Property, plant and equipment | 10,019 | 8,588 | 10,856 | |
| Deferred income tax assets | 5,253 | 3,538 | 4,215 | |
| 69,831 | 61,699 | 76,738 | ||
| Current assets | ||||
| Inventories | 5,596 | 5,628 | 5,486 | |
| Trade and other receivables | 17,216 | 18,410 | 21,080 | |
| Current tax receivable | 29 | 92 | 21 | |
| Derivative financial instruments | 46 | 6 | 42 | |
| Cash and cash equivalents | 5,423 | 4,477 | 6,486 | |
| 28,310 | 28,613 | 33,115 | ||
| LIABILITIES | ||||
| Current liabilities | ||||
| Bank borrowings and finance leases | 7 | (2,022) | (1,249) | (2,019) |
| Trade and other payables | (21,290) | (23,440) | (27,000) | |
| Current income tax liabilities | (414) | (483) | (718) | |
| Provisions for liabilities and charges | (789) | (631) | (933) | |
| Derivative financial instruments | (717) | (515) | (1,068) | |
| (25,232) | (26,318) | (31,738) | ||
| Net current assets | 3,078 | 2,295 | 1,377 | |
| Non-current liabilities | ||||
| Deferred income tax liabilities | (9,153) | (7,939) | (10,362) | |
| Bank borrowings and finance leases | 7 | (19,363) | (19,128) | (23,353) |
| Investment in joint venture | (33) | (16) | (35) | |
| Retirement benefit obligations | (10,997) | (6,466) | (6,588) | |
| Derivative financial instruments | (6) | (254) | (222) | |
| Other non-current liabilities | (273) | (81) | (78) | |
| (39,825) | (33,884) | (40,638) | ||
| Net Assets | 33,084 | 30,110 | 37,477 | |
| SHAREHOLDERS EQUITY | ||||
| Ordinary shares | 10,094 | 10,094 | 10,094 | |
| Share premium | 24,529 | 24,529 | 24,529 | |
| Other reserves | (5,894) | (8,124) | (2,586) | |
| Retained earnings | 4,337 | 3,589 | 5,409 | |
| Total equity attributable to shareholders | 33,066 | 30,088 | 37,446 | |
| Minority interests | 18 | 22 | 31 | |
| Total equity | 33,084 | 30,110 | 37,477 |
The accompanying notes are an integral part of this interim report.
Consolidated Statement of Changes in Equity
for the 6 months ended 31 August 2009
| Ordinary shares | Share premium | Earn-out shares | Other reserves | Retained earnings | Minority Interest | Total equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Balance at 1 March 2009 | 10,094 | 24,529 | - | (2,586) | 5,409 | 31 | 37,477 |
| Profit for the period | - | - | - | - | 2,160 | (2) | 2,158 |
| Exchange differences on retranslation | - | - | - | (3,498) | - | 3 | (3,495) |
| Actuarial loss on retirement benefit obligations | - | - | - | - | (4,501) | - | (4,501) |
| Deferred tax movement on actuarial loss | - | - | - | - | 1,260 | - | 1,260 |
| Movement in interest rate hedging reserve | - | - | - | 96 | - | - | 96 |
| Movement in exchange rate hedging reserve | - | - | - | 176 | - | - | 176 |
| Deferred tax movement on hedging reserves | - | - | - | (82) | - | - | (82) |
| Total comprehensive income for the period | - | (3,308) | (1,081) | 1 | (4,388) | ||
| Value of employee services under share options | - | - | - | - | 9 | - | 9 |
| Dividends to minority interests | - | - | - | - | - | (14) | (14) |
| Balance at 31 August 2009 (unaudited) | 10,094 | 24,529 | - | (5,894) | 4,337 | 18 | 33,084 |
| Balance at 1 March 2008 | 8,044 | 18,377 | 8,202 | (9,865) | 5,782 | 21 | 30,561 |
| Profit for the period | - | - | - | - | 1,350 | (3) | 1,347 |
| Exchange differences on retranslation | - | - | - | 1,692 | - | 4 | 1,696 |
| Actuarial loss on retirement benefit obligations | - | - | - | - | (4,452) | - | (4,452) |
| Deferred tax movement on actuarial loss | - | - | - | - | 1,247 | - | 1,247 |
| Movement in interest rate hedging reserve | - | - | - | 203 | - | - | 203 |
| Movement in exchange rate hedging reserve | - | - | - | (108) | - | - | (108) |
| Deferred tax movement on hedging reserves | - | - | - | (46) | - | - | (46) |
| Total comprehensive income for the period | - | - | - | 1,741 | (1,855) | 1 | (113) |
| Dividends paid to shareholders | - | - | - | - | (338) | - | (338) |
| Issue of earn-out shares | 2,050 | 6,152 | (8,202) | - | - | - | - |
| Balance at 31 August 2008 (unaudited) | 10,094 | 24,529 | - | (8,124) | 3,589 | 22 | 30,110 |
| Balance at 1 March 2008 | 8,044 | 18,377 | 8,202 | (9,865) | 5,782 | 21 | 30,561 |
| Profit for the period | - | - | - | - | 3,749 | 7 | 3,756 |
| Exchange differences on retranslation | - | - | - | 7,508 | - | 3 | 7,511 |
| Actuarial loss on retirement benefit obligations | - | - | - | - | (4,835) | - | (4,835) |
| Deferred tax movement on actuarial loss | - | - | - | - | 1,354 | - | 1,354 |
| Movement in interest rate hedging reserve | - | - | - | 183 | - | - | 183 |
| Movement in exchange rate hedging reserve | - | - | - | (476) | - | - | (476) |
| Deferred tax movement on hedging reserves | - | - | - | 64 | - | - | 64 |
| Total comprehensive income for the period | - | - | - | 7,279 | 268 | 10 | 7,557 |
| Dividends paid to shareholders | - | - | - | - | (641) | - | (641) |
| Issue of earn-out shares | 2,050 | 6,152 | (8,202) | - | - | - | - |
| Balance at 28 February 2009 (audited) | 10,094 | 24,529 | - | (2,586) | 5,409 | 31 | 37,477 |
Consolidated Statement of Cash Flows
for the 6 months ended 31 August 2009
| 6 month period to 31 August 2009 (unaudited) | 6 month period to 31 August 2008 (unaudited) | Year ended28 February 2009 (audited) | ||
| Note | £’000 | £’000 | £’000 | |
| Cash flows from operating activities | ||||
| Cash generated from operations | 8 | 2,391 | 2,153 | 6,188 |
| Tax paid | (1,082) | (440) | (1,301) | |
| Net cash flow from operating activities | 1,309 | 1,713 | 4,887 | |
| Cash flows from investing activities | ||||
| Interest received | 42 | 74 | 141 | |
| Proceeds from sale of property, plant and equipment | - | 41 | 43 | |
| Purchases of intangible fixed assets | - | - | (3) | |
| Purchases of property, plant and equipment | (713) | (513) | (1,102) | |
| Net cash flow from investing activities | (671) | (398) | (921) | |
| Cash flows from financing activities | ||||
| Repayment of borrowings | (842) | (548) | (1,129) | |
| Loan to joint venture | - | - | (21) | |
| Repayment of capital element of finance leases | (18) | (10) | (31) | |
| Dividends paid to minority interests | (14) | - | - | |
| Dividend’s paid to shareholders | - | (338) | (641) | |
| Other financing cash flows - net | 13 | (807) | (2,023) | |
| Net cash flow from financing activities | (861) | (1,703) | (3,845) | |
| (Decrease) / increase in cash and cash equivalents | (223) | (388) | 121 | |
| Effect of exchange rates on cash and cash equivalents | (840) | 278 | 1,778 | |
| Cash and cash equivalents at the beginning of the period | 6,486 | 4,587 | 4,587 | |
| Cash and cash equivalents at the end of the period | 5,423 | 4,477 | 6,486 |
Notes to the Interim Announcement
for the 6 months ended 31 August 2009
1.General information
Clyde Process Solutions plc (CPS or the Company) is a public limited company incorporated and domiciled in England. The Company has a primary listing on the AIM stock exchange. The address of its registered office is Carolina Court, Lakeside, Doncaster, DN4 5RA.
2.Basis of preparation
The condensed consolidated interim financial statements (hereinafter referred to as ‘interim financial statements’) have been prepared in accordance with the AIM rules for companies and in accordance with IAS 34 “Interim Financial Reporting” as adopted for use in the European Union.
This interim announcement comprises the interim consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity and selected notes taken from the interim financial statements of Clyde Process Solutions plc for the six months ended 31 August 2009.
The interim financial statements do not constitute statutory accounts as defined in sections 434(3) and 435(3) of the Companies Act 2006. The interim financial statements should be read in conjunction with the financial statements for the year ended 28 February 2009.
The statutory accounts for the year ended 28 February 2009 have been delivered to the Registrar of Companies. The auditors report on those financial statements was unqualified and did not include a statement under section 489 (2) or (3) of the United Kingdom Companies Act 2006.
The interim financial statements are unaudited but have been reviewed by our auditors and were approved for issue by the Board of Directors on 25 November 2009.
3.Segmental information
Management has determined the operating segments based on the reports that are reviewed by the CPS Board of Directors to assist in making strategic decisions.
The Board considers the business primarily from a geographic perspective. The principal geographic regions are North America (operating out of the USA) and Europe (operating out of the UK). The regions Asia (operating out of China), Africa (operating out of South Africa) and South America (operating out of Brazil) do not meet the quantitative thresholds required by IFRS 8, however the Board has concluded that these operating segments should be reported as they are identified as potential growth regions and are expected to materially contribute to future Group revenues. Unallocated items comprise those transactions and balances that cannot be reasonably attributed to the trading activities of one or more of the Group’s geographical operating segments.
The reportable operating segments derived their revenue entirely from materials handling and air filtration solutions. The reports reviewed by the CPS Board do not distinguish between these two product categories and therefore materials handling and air filtration are not reportable segments for the purposes of these financial statements. In accordance with paragraph 32 of IFRS 8 an analysis between materials handling and filtration revenues is included in the full interim financial statements.
Sales between segments are carried out in accordance with Group policy at a value deemed to be consistent with arm’s length trading. Inter-Group trading policy is periodically reviewed by management to ensure the value of such transactions represents a fair return in relation to the associated risks. The revenue from external parties reported to the CPS Board of Directors is measured in a manner consistent with that in the income statement.
The Board also receives reports analysing order intake by key customer market. Performance by key customer market is not reported beyond order intake level and therefore is not a reportable segment for the purposes of these financial statements.
The primary measure of operating segment performance utilised by the CPS Board of Directors is earnings before interest, tax and exceptional items (EBIT before exceptionals). The information provided to the Board is measured in a manner consistent with that in the financial statements. Segmental assets and liabilities are allocated based on the physical location of the entity to which those assets and liabilities relate.
The principal segment information made available to the CPS Board of Directors for the 6 months ended 31 August 2009 is as follows:
| Europe | North America | South America | Asia | Africa | Unallocated | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Total segment revenue | 5,401 | 30,453 | 199 | 2,653 | 281 | - | 38,987 |
| Inter-segment revenue | (342) | (8) | - | (192) | - | - | (542) |
| External segment revenue | 5,059 | 30,445 | 199 | 2,461 | 281 | - | 38,445 |
| Operating profit before exceptionals | 893 | 3,596 | (159) | 59 | 36 | (365) | 4,060 |
| Share of loss of joint venture | - | - | - | (1) | - | - | (1) |
| EBIT before exceptionals | 893 | 3,596 | (159) | 58 | 36 | (365) | 4,059 |
| Europe | North America | South America | Asia | Africa | Unallocated | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Depreciation and amortisation | 94 | 412 | 23 | 10 | - | - | 539 |
| Exceptional items | - | - | - | - | - | - | - |
| Europe | North America | South America | Asia | Africa | Unallocated | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Total assets | 19,133 | 73,590 | 843 | 4,451 | 621 | 7,290 | 105,928 |
| Total liabilities | (14,897) | (52,270) | (825) | (3,635) | (587) | (630) | (72,844) |
| Total assets include: | |||||||
| Non-current assets * | 7,401 | 56,850 | 271 | 56 | - | - | 64,578 |
| Additions to non-current assets * | 26 | 714 | 2 | 6 | - | - | 748 |
| Assets | Liabilities | |
| £’000 | £’000 | |
| Total assets/(liabilities) per the segmental analysis | 105,928 | (72,844) |
| Inter-segment balance eliminations | (7,787) | 7,787 |
| Total assets/(liabilities) per the consolidated balance sheet | 98,141 | 65,057 |
4.Net finance costs
| 6 month period to31 August 2009 | 6 month period to31 August 2008 | Year ended28 February 2009 | |
| £’000 | £’000 | £’000 | |
| Interest on bank overdrafts | 54 | 24 | 63 |
| Interest on borrowingsinventories adjustments to inventories | 795 | 691 | 1,514 |
| Finance lease interest | 5 | 5 | 12 |
| Other interest costs | 13 | - | 7 |
| Net foreign exchange loss on financing activities | 18 | - | - |
| Working capital facility non-utilisation fees | 20 | 22 | 73 |
| Net finance cost on retirement benefit obligation | 272 | 101 | 194 |
| Interest rate swap hedge ineffectiveness charge (note 15) | - | 50 | 114 |
| Bank arrangement fee and other similar charges | 403 | 58 | 66 |
| Total finance expense | 1,580 | 951 | 2,043 |
| Interest receivable | (42) | (74) | (141) |
| Interest rate swap hedge ineffectiveness charge (note 15) | (123) | - | - |
| Interest on bad debts recovered | (440) | - | - |
| Net foreign exchange gain on financing activities | - | (430) | (1,814) |
| Net finance costs | 975 | 447 | 229 |
5.Taxation
The taxation charge for the period is based on the expected effective rate of tax for the year to 28 February 2010 in each jurisdiction, and applied to each jurisdiction’s interim profit before tax. The Group effective tax rate applied to the six months to 31 August 2009 is 30%. The Group effective tax rate for the year to February 2009 was 32%.
6.Earnings per ordinary share
The basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders for the financial period by the weighted average number of shares in issue.In calculating the diluted earnings per share, warrants outstanding, earn-out shares and share options have been taken into account.| 6 month period to31 August 2009 | 6 month period to31 August 2008 | Year ended28 February 2009 | |
| Profit attributable to equity shareholders (£’000) | 2,160 | 1,350 | 3,749 |
| Weighted average number of shares(number) | 40,376,710 | 35,295,068 | 37,815,006 |
| Effect of outstanding share warrants | - | 10,435 | 5,260 |
| Effect of earn-out shares up to date of issue | - | 5,081,642 | 2,561,704 |
| Effect of share options | 288,333 | - | - |
| Adjusted weighted average number of shares (number) | 40,665,043 | 40,387,145 | 40,381,970 |
| Basic earning per share (p) | 5.35 | 3.82 | 9.91 |
| Diluted earning per share (p) | 5.31 | 3.34 | 9.28 |
| 7.Cash and Cash equivalents, bank borrowings & finance leases | |||
| | |||
| 31 August 2009 | 31 August 2008 | 28 February 2009 | |
| £’000 | £’000 | £’000 | |
| Current liabilities | |||
| Bank borrowings | 2,012 | 1,218 | 1,995 |
| Current obligations under finance leases | 10 | 31 | 24 |
| 2,022 | 1,249 | 2,019 | |
| Non-current liabilities | |||
| Bank borrowings | 19,325 | 19,080 | 23,310 |
| Non-current obligations under finance leases | 38 | 48 | 43 |
| 19,363 | 19,128 | 23,353 | |
| Total borrowings | 21,385 | 20,377 | 25,372 |
| Cash and cash equivalents | (5,423) | (4,477) | (6,486) |
| Net debt | 15,962 | 15,900 | 18,886 |
| 31 August 2009 | 31 August 2008 | 28 February 2009 | |
| £’000 | £’000 | £’000 | |
| Within one year, or on demand | 2,022 | 1,249 | 2,019 |
| Between 1 and 2 years | 2,290 | 1,811 | 2,488 |
| Between 2 and 5 years | 10,942 | 6,356 | 6,834 |
| Greater than 5 years | 6,131 | 10,961 | 14,031 |
| 21,385 | 20,377 | 25,372 |
| 31 August 2009 | 31 August 2008 | 28 February 2009 | |
| £’000 | £’000 | £’000 | |
| US Dollars | 21,337 | 20,320 | 25,319 |
| Pounds Sterling | 48 | 57 | 53 |
| 21,385 | 20,377 | 25,372 |
| US Dollar Loans | US Dollar finance leases | GBP finance leases | Total | |||
| Amounts in USD | Translated to GBP | Amounts in USD | Translated to GBP | GBP | GBP | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Borrowings at 1 March 2009 | 36,070 | 25,305 | 20 | 14 | 53 | 25,372 |
| Repayments (net of interest) | (1,313) | (842) | (20) | (13) | (5) | (860) |
| Arrangement fee amortisation | 45 | 29 | - | - | - | 29 |
| Exchange translation effect | - | (3,155) | - | (1) | - | (3,156) |
| Borrowings at 31 August 2009 | 34,803 | 21,337 | - | - | 48 | 21,385 |
The US Dollar loan balance includes £21,567,347 ($35,187,500) due to Bank of Scotland less £235,769 ($384,563) arrangement fees included in the initial measurement of the liability and amortised using the effective interest method in accordance with IAS 39.Revised facility agreementsDuring the period the Group entered into a revised facility agreement with Bank of Scotland. The revised agreement provided for additional headroom on the financial covenants in response to the current economic environment. As a result of this revision the interest margin on both the term loan facility and the working capital facility has increased by 75 basis points. The Group incurred arrangement fees of 1% on total facilities, the resulting fee of £403,355 was charged to the income statement within net finance costs.At the balance sheet date, the effective interest rate on the Group’s long term loans, based on the most recent re-pricing date and inclusive of interest rate swap agreements was 7.04% (August 2008: 6.81%, February 2009: 6.49%).
8.Cashflows from operations
9.Earnings before interest, tax, depreciation & amortisation
The earnings before interest, tax, depreciation & amortisation (“EBITDA”) is calculated as follows:
| 6 month period to 31 August 2009 | 6 month period to 31 August 2008 | Year ended28 February 2009 | |
| £’000 | £’000 | £’000 | |
| Operating profit | 4,060 | 2,457 | 5,779 |
| Less share of joint venture losses | (1) | (2) | (15) |
| Plus depreciation | 431 | 315 | 705 |
| Plus amortisation | 108 | 87 | 192 |
| EBITDA |