11 Jun 2012 07:00
11 June 2012
LATCHWAYS PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2012
Latchways plc is the world leader in the design, manufacture and sale of engineered fall protection safety systems, which offer continuous protection to individuals working at height. Latchways' systems are sold globally through a network of trained installers to a legislation-driven marketplace. These systems are used to provide worker safety on a diverse range of applications including commercial rooftops, wind power turbines, electricity transmission towers, aircraft wings and industrial plants.
Summary
·; Revenues up 5% to a record £41.4 million (2011: £39.6 million)
·; Continued successful expansion of geographical reach and product offering
·; Growth in all geographies except North America
·; Profit before tax up 7% to a record £9.9 million (2011: £9.3 million)
·; Basic earnings per share up 8% to 66.04 pence (2011: 61.27 pence)
·; 10% increase in final dividend to 22.73 pence per share, total regular dividends of 32.73 pence per share for the year (2011: 29.64 pence)
·; Special dividend of 40 pence per share paid in the year (2011: nil)
·; Net cash £8.4 million (2011: £10.9 million) after £4.5 million special dividend
Commenting on the results, Paul Hearson, Chairman, said
"Following the very strong growth achieved in 2010/11, the past year has been a period of solid progress for Latchways, despite the increasingly difficult global economic environment. We have achieved good growth across the majority of geographies and product lines, with the exception of North America.
Given the current level of economic uncertainty, it is not surprising that the new year has started slowly. Despite this, with the level of prospects and opportunities at an all time high, and the resources now in place to service these, we are confident of achieving a strong performance for the year as a whole."
Enquiries: Latchways plc Newgate Threadneedle
David Hearson, Chief Executive Graham Herring
Rex Orton, Financial Director Tel: 020 7653 9858Tel: 01380 732700
11 June 2012
LATCHWAYS PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2012
Chairman's Statement
Following the very strong growth achieved in 2010/11, the past year has been a period of solid progress for Latchways, despite the increasingly difficult global economic environment. We have achieved growth across the majority of geographies and product lines, with a particularly strong performance from our Self Retracting Lifeline product range. The underlying strength of this performance has been partially offset by reduced revenues from our North American business.
The launch of our new Personal Rescue Device is the latest step forward in the strategic diversification of our product range aimed at increasing our ability to service the wider fall protection market. We are very excited by the market reaction to this product and we expect it to generate considerable revenues in the coming year.
In previous statements I have spoken of the need to increase our resources to enable us to reach a more diverse and global customer base. This process is now largely complete, with our sales and marketing team increased by 30% since last year, and further investments made in product development and operations. Whilst it will take time for these resources to become fully effective, we have embarked on an ambitious campaign to take our innovative product range to a much wider audience. I am confident that this will be of significant benefit to all of Latchways' stakeholders over the coming years.
Results
Group revenue for the year ended 31 March 2012 was £41.4 million (2011: £39.6 million), a 5% increase on last year.
Group profit before taxation was 7% higher than last year at £9.9 million (2011: £9.3 million).
Basic earnings per share rose 8% to 66.04 pence (2011: 61.27 pence).
Following the payment of a £4.5 million special dividend during the year, net cash balances at year end were £8.4 million (2011: £10.9 million).
Dividends
The board remains committed to maintaining a progressive dividend policy whilst ensuring that the group retains sufficient funds to make ongoing investments without recourse to banks or shareholders.
During the year, we concluded that the continued strength of Latchways' cash generation provided sufficient confidence to allow a partial return of surplus cash to shareholders. As a result, a special dividend of 40 pence per share, totaling £4.5 million, was paid in January 2012. Despite this, year end cash balances only reduced by £2.5 million.
The board is recommending a 10% increase in the final dividend to 22.73 pence per share (2011: 20.66 pence). Taken together with the interim dividend of 10.00 pence, the total regular dividend for the year of 32.73 pence per share represents a 10% increase on last year. This is twice covered by earnings.
Subject to approval at the Annual General Meeting, the final dividend will be paid on 14 September 2012 to shareholders on the register as at 17 August 2012.
Our trading environment
As a business whose revenues have historically been closely linked to capital investment activity, business confidence has always been important to our success. For this reason, the current level of uncertainty in the global economic environment presents a challenge to Latchways. Our response has been to continue expanding our horizons, both geographically and in terms of product offering, in order to mitigate the effects of market downturns in any one area. It is this ongoing expansion which has enabled us to report another year of solid growth, despite the difficult economic outlook.
The UK construction market has remained flat this year. Despite this, we have seen some notable successes with retrofit installations for national accounts which have enabled us to grow our UK installer sales. Wingrip and the SRL range have also performed well. Our sealed SRL remains the product of choice for offshore wind turbines.
Our European business performed well again this year, despite the severe economic problems faced by many Eurozone countries. We are in the process of increasing our installer base in a number of European countries both within and outside the Eurozone which should ensure further growth going forward.
Our North American business has proven more challenging. This was in part due to the timing of significant Wingrip business for the US military which took place in 2011 and was not repeated this year. Prospects for Wingrip remain strong, with further business expected this year from both the military and civilian sectors. North American installer business also fell during the year. This has highlighted a need for broader representation across the Americas, and so, as in Europe, we will be increasing our customer base.
The rest of the world has made further progress this year, mainly through sales of our vertical systems to the electricity transmission market. We are now the industry standard in Australia and New Zealand, with rollouts underway with a number of customers. Although this business can be lumpy by nature, it provides good visibility of potential business for a number of years to come, and the growing list of new customers should help to mitigate variations in individual companies' requirements.
New Product Development
Latchways has always been at the forefront of product development in the fall protection industry. Since the invention of the Transfastener device nearly 40 years ago, our name has been synonymous with technical excellence and innovation. In 2001 we developed the Constant Force Post, the first truly energy absorbing rooftop support post, which revolutionised the installation process and eliminated the risk of water ingress around the post. Since then the Wingrip product lines have become the accepted standard for aircraft construction and maintenance in both the commercial and military fields, whilst the Sealed SRL has made the offshore wind energy sector its own.
This year saw the launch of the Latchways Personal Rescue Device (PRD). This product drastically reduces the complexity of rescue methodology in the event of a fall, enabling the user to self-rescue by gently lowering themselves to the ground. The product is built into the user's harness, which workers at height are already mandated to wear. As such it creates no additional inconvenience to the worker. The PRD is already attracting strong interest. At its recent awards, SATRA Technology, the leading research and technology centre and largest European Notified testing body, named the PRD its Personal Protective Equipment Innovation of the Year. The PRD also picked up the Product Innovation award at the British Safety Industry Federation Safety Awards 2012. We are in discussion with a number of potentially significant end customers, and shipments have already begun to the UK Ministry of Defence for their staff working at height. The product is now certified worldwide and in full production.
Additional variants of the PRD are now in development for specific customer requirements. We continue to work on further important product developments which I look forward to reporting on in due course.
Recent Projects
During the past year we have seen many more examples of Latchways being selected for the most prestigious projects worldwide. Recent successes have included the National Stadium in Warsaw, Poland for Euro 2012, and the Cathay Pacific cargo terminal at Hong Kong Airport. Closer to home, our systems were selected for the O2 Skywalk at the O2 Dome, as well as Heathrow Terminal 2.
With the 2012 Olympics due to commence next month, I am pleased to note that Latchways fall protection systems were selected for all major Olympic venues.
People
Latchways is very fortunate to have an extremely loyal and talented team across the business, and it is their efforts which have led us to this point in our development. Over the past year, we have been actively strengthening the team in key areas. Our sales effort, particularly on our newer product ranges, has historically been resource-constrained and we have now largely completed a programme of recruitment which will allow us to proactively seek new business globally. We have increased resource in all the key growth areas, with dedicated teams specialising in individual products working together with other, geographically focused resources.
Supporting this sales effort we have strengthened the operational team, with a newly created role of Director of Operations. This role brings together the activities of the operational support functions. We are pleased to welcome Kate Cheyne, a qualified engineer formerly with the Royal Engineers, into this role.
The New Product Development team has also been strengthened this year, with the intention of improving the time-to-market for development projects, as well as introducing new metallurgical and testing skills to the development process.
Throughout this period of change our existing staff have continued to deliver a first rate service to our customers. On behalf of the board I would like to thank all concerned for another successful year.
Current Trading and Prospects
Given the current level of economic uncertainty, it is not surprising that the new year has started slowly. Despite this, with the level of prospects and opportunities at an all time high, and the resources now in place to service these, we are confident of achieving a strong performance for the year as a whole.
Paul Hearson
Chairman
OPERATING AND FINANCIAL REVIEW
The board of Latchways plc is pleased to report these consolidated results for the year ended 31 March 2012.
Financial Results
Group revenue for the year was £41.4 million, up 5% on the 2011 figure of £39.6 million. This resulted in an operating and pre-tax profit of £9.9 million, 7% better than the prior year (2011: £9.3 million).
Both gross and operating margins are among the group's key performance indicators.
The consolidated gross margin was 1.0% lower than last year at 52.8% (2011: 53.8%). This was due to product mix effects, and lower margins in the Safety Services division due to increased competition in the UK installation market.
Overheads were in line with last year at £11.9 million. Lower sales commissions and bonuses were offset by £0.5 million of charges relating to the Value Creation Plan (VCP) (2011: £0.2 million). These costs relate to the IFRS2 charge together with the current year portion of estimated employer's National Insurance costs, which will be payable in the event that the Plan is successful.
The slight reduction in overheads resulted in operating margins improving by 0.5% to 24.0%.
The effective rate of taxation for the year was 25.8% (2011: 26.8%). The reduced rate is due to the reduction in corporation tax rates from 28% to 26% for the year, partly offset by the effect of a prior year tax refund in 2011.
Basic earnings per share increased by 8% to 66.04 pence (2011: 61.27 pence), whilst diluted earnings per share, which were affected by potential share awards under the VCP, increased by 4% to 63.39 pence (2011: 61.07 pence).
On the balance sheet, non-current assets increased by £0.5 million to £10.1 million (2011: £9.6 million). This was due to patent and development expenditure in the year, mainly related to the Personal Rescue Device, together with the recognition of deferred tax assets relating to the Value Creation Plan. Goodwill was unchanged at £4.4 million. Intangible assets of £2.1 million (2011: £1.9 million) comprise the intellectual property, brands, order books and customer relationships acquired since 2004, together with internally generated patents and trademarks, computer software and ongoing development costs that have been capitalised. Property, plant and equipment of £3.1 million (2011: £3.1 million) mainly represents premises, production plant and tooling. The premises consist of a 2,000 square metre assembly unit, warehouse and head office at Devizes, together with a further 2 acres of additional land directly adjacent. Plans for a second, 2,800 square metre facility on this site are well advanced, with an expected completion date of late 2013. This facility is expected to cost no more than £3 million, and will be financed from existing resources and cash flow.
Inventory of £5.4 million was £1.6 million higher than last year (2011: £3.8 million). During the year a step change in inventory levels occurred, to ensure we were able to respond rapidly to customer requirements across our growing range of products. This will facilitate revenue growth from current levels without further significant incremental inventory investment.
Trade and other receivables were £0.5 million higher at £12.2 million (2011: £11.7 million). This 4% increase was slightly less than the rate of revenue growth.
Group creditor days were 43 days (2011: 31 days). The increase was due to timing of payments around year end. Our long term policy of ensuring that suppliers are paid on time remains unchanged.
Cash generation is a key performance indicator for the group. Cash generated from operations as a proportion of operating profit was 93% (2011: 104%), a strong performance despite the increase in inventories. Tax payments in the year were £0.3 million higher at £2.6 million (2011: £2.3 million), reflecting the higher tax payments relating to 2011 profits. Capital expenditure on both tangible assets and intangible assets increased in the year, due to tooling and development costs related to the PRD.
Dividend payments increased by £4.9 million to £7.9 million (2011: £3.0 million), reflecting the special dividend of £4.5 million and a 10% increase in underlying dividends.
Cash and cash equivalents were £2.5 million lower than last year at £8.4 million (2011: £10.9 million). The group has no borrowings.
Strategic Overview
Latchways is a world leader in the provision of high quality fall protection equipment and related services. Our aim is to maximise shareholder return through providing the most innovative and functional equipment to a largely legislation-driven market, with a customer support network and after-sales service that is unrivalled in our industry. There has been no change to this strategy during the year.
Cable based, engineered fall protection systems remain an important part of our strategy. This business has provided excellent growth for Latchways over many years and we foresee a great deal of further expansion in this area as the global reach of fall protection continues to expand.
In addition to our traditional engineered product range, the recent launch of the Personal Rescue Device is the latest step in our expansion to bring our innovation and quality to the wider, and much larger fall protection market. With the PRD, the Self Retracting Lifeline and Wingrip, we now have a significant range of products which addresses this. Further product innovations will continue to expand this range. We are working with a number of large international customers to best achieve the potential for these products.
Operating Review
The Latchways group has two business segments, each of which is managed independently with strategic input from the group board. The Safety Products division is the main Latchways product business, operating out of the group headquarters in Devizes and a small production plant in Kozina, Slovenia. Safety Products generates almost three quarters of group revenue, and produces 92% of group operating profits. 68% of Safety Products' revenue comes from exports. The Safety Services division allows us to offer turnkey solutions by installing and servicing safety products in the UK, and generates the remaining revenue and profit.
Safety Products
Latchways designs and manufactures fall protection equipment for people working at height. This equipment is sold worldwide, both directly to end users and also through a network of independent, trained installers. The business is broadly categorised between horizontal business (systems for those working at height, eg on rooftops, crane rails etc) and vertical business (systems for those climbing to or from height, eg ladders, telecom masts, electricity transmission towers). In recent years the range has been enhanced, both through acquisition and product development, to include Personal Protective Equipment, guardrails and walkways, and most recently rescue equipment.
The Safety Products business saw total revenues increase by 5% in the year, whilst operating profits increased by 12% to £9.1 million.
Fall protection is progressively becoming a truly global business. As such, revenue performance by geographical segment is a key performance measure for the Safety Products business.
In spite of the continued downturn in the UK economy, and the construction market in particular, our UK business put in an excellent performance, with revenues up 10% to £10.7 million. Our construction-facing installer business achieved modest growth, with some significant retrofit projects being performed during the year, whilst Wingrip and the SRL product range both performed well.
European revenues improved by 15% to £13.9 million. Growth has been achieved across the majority of product lines, with a particularly strong performance from the Sealed SRL, which is now specified worldwide by DONG energy amongst others. Strong sales of Wingrip to Airbus added further to the performance.
North America has been a disappointment this year. Revenues were down 30% on the previous year to £4.0 million. This was in part due to lower Wingrip sales, as large US military sales in 2010 and 2011 were not repeated this year, although we have a strong pipeline of Wingrip prospects in the US for the coming year. Underlying product revenues were also lower, reflecting our over-reliance on a limited customer base. We are in the process of recruiting additional representation in the US, whilst also seeking to leverage our relationships with existing customers. Whilst these steps will take time to generate growth, they are a necessary step towards achieving the potential that North America undoubtedly offers.
The rest of the world produced steady growth in the year, with revenues up 9% to £4.6 million. Following our success in breaking into the Australian and New Zealand electricity transmission markets in 2011, we have achieved further breakthroughs with additional customers in the last year, although these have yet to generate significant revenues. Our traditional installer business has been more muted in the Middle East, but we are optimistic of progress on the Indian subcontinent in due course.
Safety Services
The Safety Services division is Latchways' UK installation arm. Revenues improved in the year, but this was at the expense of margins as the market remains very competitive. An emphasis on retrofit opportunities enabled the business to increase overall revenues. Safety Services revenues were 8% ahead of 2011 at £11.4 million (2011: £10.6 million), but the pressure on margins resulted in a reduction in operating profits, to £0.9 million (2011: £1.2 million).
During the year, Safety Services, as the largest installer of Latchways products, purchased £3.2 million of product from Latchways, a 19% increase on the previous period, due to the large retrofit projects carried out in the year.
Risks and the Operational Environment
As a provider of fall protection solutions to a global marketplace, the group is subject to a number of external factors which affect its risk profile. The more important of these are discussed below.
The Global Economy
As Latchways expands its geographic footprint, the risks inherent in one particular market diminish in importance. However the current problems in both the Eurozone and UK economies are of direct concern to all businesses, and Latchways is not immune to this. By continuing to expand our geographical footprint, and through the development of innovative new products such as the PRD, Latchways is seeking to minimise the potential impact of any Eurozone and/or UK economic downturn.
The Commercial Construction Market
Latchways operates in a diverse and growing range of markets. This ensures that we are not excessively dependent on one market for our growth. Through diversifying our geographic and end user markets, we continue to reduce the importance of the UK commercial construction market to our overall business, but it remains one of our larger markets. Within the UK we have had some success with retrofit business, whilst products such as our Versirail guardrail system have continued to grow market share.
The Legislative Environment
The increasing emphasis on Health and Safety legislation throughout the European Union has been one of the key drivers of the fall protection business over the past decade. The UK, and certain other EU countries, which have interpreted this into specific fall-protection legislation have become significant markets for the Latchways product range. Within the UK, the most obvious examples of this legislation are the Workplace (Health, Safety & Welfare) Regulations 1992, the Construction (Design and Management) Regulations 1994 (revised in 2007), and the Working at Height Regulations 2005. Latchways sees the development of appropriate, workable safety regulations as of critical importance, not just to its own business but to business as a whole. As a result, we have ensured that Latchways is represented on a number of key legislative standards committees, both in the UK and overseas. Outside of the EU, we are progressively seeing other countries adopting Health and Safety standards which should continue to provide us with opportunities in the years to come.
Commodity Prices
The majority of Latchways products are constructed of either marine grade stainless steel or aluminium. Market prices for these commodities have been volatile in recent years, although lower demand from the Far East has provided a slightly more benign pricing environment this year.
It remains Latchways' philosophy to protect our customers from the volatility of commodity prices through a combination of modest annual price increases and product re-sourcing efforts. This policy has served us well over a number of years, and will continue.
Currency Risk
Latchways has exposure to fluctuations in the Sterling/Euro exchange rate, as our European sales are invoiced in Euros. This risk is partly mitigated by the fact that guardrail and cable are now purchased in Euros. Forward exchange contracts are used to mitigate the remaining exposures. The current crisis in the Eurozone has resulted in a fall in the value of the Euro, which will have some adverse impact on our margins going forward.
Outside of Europe, wherever possible we seek to invoice in Sterling, to eliminate exchange risk. As our business has expanded, this has not always been possible and we therefore now have exposure to the US, Australian and New Zealand Dollars. Where appropriate, we utilise forward exchange contracts to mitigate those exposures.
Prospects
The investments that we have made in new products and resources in the past year are the right ones to drive the long term success of our business. As Fall Protection continues to gather a larger, more diverse audience around the world, it is vital that we are able to demonstrate our innovative and high quality solutions to potential customers. With the resources now in place, we are confident of maintaining our record of providing excellent returns for our shareholders.
David Hearson
Chief Executive
| Latchways plc | |||||||||
| Group Statement of Comprehensive Income | |||||||||
for the year ended 31 March 2012 | |||||||||
2012 | 2011 | ||||||||
£'000 | £'000 | ||||||||
Revenue | 41,372 | 39,563 | |||||||
Cost of sales | (19,548) | (18,274) | |||||||
Gross profit | 21,824 | 21,289 | |||||||
Administrative expenses | (11,903) | (11,980) | |||||||
Operating profit | 9,921 | 9,309 | |||||||
Finance costs | (24) | (21) | |||||||
Finance income | 37 | 37 | |||||||
Profit before income tax | 9,934 | 9,325 | |||||||
Income tax expense | (2,565) | (2,503) | |||||||
Profit for the year attributable to equity shareholders | 7,369 | 6,822 | |||||||
Other comprehensive income: | |||||||||
Exchange differences on consolidation (net of tax) | (116) | (9) | |||||||
Total comprehensive income for the year | 7,253 | 6,813 | |||||||
Basic earnings per share (pence) | 66.04 | 61.27 | |||||||
Diluted earnings per share (pence) | 63.39 | 61.07 | |||||||
The directors propose a final dividend of 22.73 pence per share (2011: 20.66 pence) at an estimated cost of £2,539,000 (2011: £2,307,000), which will be subject to shareholder approval at the Annual General Meeting on 7 September 2012.
| Latchways plc | ||||||||||
Group Balance Sheet | ||||||||||
as at 31 March 2012 | ||||||||||
2012 | 2011 | |||||||||
£'000 | £'000 | |||||||||
Assets | ||||||||||
Non-current assets | ||||||||||
Goodwill | 4,363 | 4,402 | ||||||||
Intangible assets | 2,110 | 1,871 | ||||||||
Property, plant and equipment | 3,125 | 3,057 | ||||||||
Deferred income tax assets | 489 | 256 | ||||||||
10,087 | 9,586 | |||||||||
Current assets | ||||||||||
Financial assets | ||||||||||
- Derivative financial instruments | 62 | - | ||||||||
Inventories | 5,387 | 3,757 | ||||||||
Trade and other receivables | 12,174 | 11,718 | ||||||||
Cash and cash equivalents | 8,371 | 10,854 | ||||||||
25,994 | 26,329 | |||||||||
Liabilities | ||||||||||
Current Liabilities | ||||||||||
Financial liabilities | ||||||||||
- Derivative financial instruments | - | (115) | ||||||||
Trade and other payables | (4,972) | (4,628) | ||||||||
Deferred consideration | (89) | (83) | ||||||||
Current tax liabilities | (1,346) | (1,318) | ||||||||
(6,407) | (6,144) | |||||||||
Net current assets | 19,587 | 20,185 | ||||||||
Non-current liabilities | ||||||||||
Deferred consideration | (307) | (338) | ||||||||
Deferred income tax liabilities | (580) | (540) | ||||||||
(887) | (878) | |||||||||
Net assets | 28,787 | 28,893 | ||||||||
Equity | ||||||||||
Ordinary shares | 559 | 557 | ||||||||
Share premium account | 1,905 | 1,807 | ||||||||
Translation reserve | 83 | 199 | ||||||||
Other reserves | 777 | 477 | ||||||||
Retained earnings | 25,463 | 25,853 | ||||||||
Total shareholders' equity | 28,787 | 28,893 | ||||||||
| Latchways plc | |||||||||
Group Cash Flow Statement | |||||||||
for the year ended 31 March 2012 | |||||||||
2012 | 2011 | ||||||||
£'000 | £'000 | ||||||||
Cash flows from operating activities | |||||||||
Cash generated from operations | 9,216 | 9,665 | |||||||
Taxation paid | (2,597) | (2,250) | |||||||
Net cash generated from operating activities | 6,619 | 7,415 | |||||||
Cash flows from investing activities | |||||||||
Additional consideration paid to acquire subsidiaries | (75) | (61) | |||||||
Interest received | 34 | 38 | |||||||
Purchase of property, plant and equipment | (684) | (379) | |||||||
Purchase of intangible assets | (308) | (220) | |||||||
Development expenditure capitalised | (277) | (94) | |||||||
Net cash used in investing activities | (1,310) | (716) | |||||||
Cash flows from financing activities | |||||||||
Net proceeds from issue of ordinary share capital | 100 | - | |||||||
Dividends paid to shareholders | (7,892) | (3,001) | |||||||
Net cash used in financing activities | (7,792) | (3,001) | |||||||
Net (decrease)/increase in cash and cash equivalents | (2,483) | 3,698 | |||||||
Cash and cash equivalents at 1 April | 10,854 | 7,156 | |||||||
Cash and cash equivalents at 31 March | 8,371 | 10,854 | |||||||
| Latchways plc | ||||||||||
Group Statement of Changes in Shareholders' Equity | ||||||||||
for the year ended 31 March 2012 | ||||||||||
Share Capital £'000 | Share Premium £'000 | Retained Earnings £'000 | Other Reserves £'000 | Total Reserves £'000 | ||||||
1 April 2010 | 557 | 1,807 | 21,984 | 498 | 24,846 | |||||
Profit for the year attributable to equity shareholders | - | - | 6,822 | - | 6,822 | |||||
Exchange differences on consolidation | - | - | - | (9) | (9) | |||||
Total comprehensive income | - | - | 6,822 | (9) | 6,813 | |||||
Transactions with owners: Share options: | ||||||||||
- Value of employee services | - | - | - | 187 | 187 | |||||
Deferred taxation on share options | - | - | 48 | - | 48 | |||||
Dividends | - | - | (3,001) | - | (3,001) | |||||
At 31 March 2011 | 557 | 1,807 | 25,853 | 676 | 28,893 | |||||
Profit for the year attributable to equity shareholders | - | - | 7,369 | - | 7,369 | |||||
Exchange differences on consolidation | - | - | - | (116) | (116) | |||||
Total comprehensive income | - | - | 7,369 | (116) | 7,253 | |||||
Transactions with owners: Share options: | ||||||||||
- Proceeds from shares issued | 2 | 98 | - | - | 100 | |||||
- Value of employee services | - | - | - | 300 | 300 | |||||
Deferred taxation on share options | - | - | 133 | - | 133 | |||||
Dividends | - | - | (7,892) | - | (7,892) | |||||
At 31 March 2012 | 559 | 1,905 | 25,463 | 860 | 28,787 | |||||
NOTES
1. Basis of accountingThis financial information does not constitute the group's statutory accounts for the years ended 31 March 2011 and 2012. The financial information in respect of 2012 has been extracted from the audited financial statements for the year ended 31 March 2012 which have not yet been delivered to the Registrar of Companies. The auditors have reported on these accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.The information has been prepared in accordance with the EU-adopted International Financial Reporting Standards (IFRS) and IFRIC interpretations and with those parts of the Companies Act 2006 which are applicable to companies reporting under IFRS.
2. Accounting PoliciesThe accounting policies applied by the group were published in the Annual Report and Accounts for the year ended 31 March 2011, which is available on the group's website at www.latchways.com, and they will also be included in the Annual Report and Accounts for the year ended 31 March 2012. There have been no significant changes to the group's accounting policies during the year.
3. Forward-looking statements
Certain statements in this preliminary results announcement are forward-looking. Although the group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risk and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.
We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
4. Earnings per share
The calculation of basic earnings per ordinary share is based on a weighted average of 11,159,145 ordinary shares in issue and ranking for dividend (2011: 11,134,246) and on a profit of £7,369,000 (2011: £6,822,000).
The calculation of diluted earnings per share is based on a weighted average of 11,625,499 ordinary shares (2011: 11,171,615), and uses an average market price for the year of £11.36 (2011: £8.38).
The increase in the impact of dilutive share options in the year results from potential ordinary shares in relation to the Latchways plc 2010 Value Creation Plan.
5. Dividends
2012 | 2011 | ||
£'000 | £'000 | ||
Final Paid 20.66p (2011: 17.97p) per 5p share | 2,307 | 2,001 | |
Special Paid 40.00p (2011: nil) per 5p share | 4,468 | - | |
Interim Paid 10.00p (2011: 8.98p) per 5p share | 1,117 | 1,000 | |
Total Paid | 7,892 | 3,001 |
In addition, the directors are proposing a final dividend in respect of the financial year ended 31 March 2012 of 22.73p (2011: 20.66p) per share which will absorb an estimated £2,539,000 of shareholders' funds (2011: £2,307,000). Subject to approval at the Annual General Meeting, the dividend will be paid on 14 September 2012 to shareholders who are on the register of members on 17 August 2012.
6. The Annual Report and Accounts
The Annual Report and Accounts for Latchways plc for the year ended 31 March 2012 will be posted to shareholders on or before 31 July 2012 and copies will be available from the registered office, Latchways plc, Hopton Park, Devizes, Wiltshire, SN10 2JP.
7. The Annual General Meeting
The Annual General Meeting will be held at Hopton Park, Devizes, Wiltshire, SN10 2JP on 7 September 2012 at 12 noon.