RNS Number : 8968A
Andrews Sykes Group PLC
28 September 2022
 

 

27 September 2022                                                                                                                   

 

ANDREWS SYKES GROUP PLC

("Andrews Sykes" or "the Company" or "the Group")

 

Half Year Results

Unaudited results for the six months ended 30 June 2022

 

Summary of Results

 

 

Unaudited
six months ended
30 June
2022

Unaudited
six months ended
30 June
2021


 

£000

 

£000


 


 


Revenue from continuing operations

 

37,903

 

35,693

EBITDA* from continuing operations

 

13,181

 

12,402

Operating profit

 

8,489

 

7,955

Profit for the financial period

 

6,477

 

6,239

Cash and cash equivalents

 

34,430

 

24,717

Net funds

 

21,741

 

9,673


 

 

 



 

(pence)

 

(pence)

Basic earnings per share

 

15.36

 

14.79

Interim dividend declared per equity share

 

11.90

 

11.90

Special dividend declared per equity share

 

16.60

 

-

 

* Earnings before interest, taxation, depreciation, profit on the sale of property, plant and equipment, amortisation and non-recurring items

 

Enquiries

 

Andrews Sykes Group plc

Carl Webb, Managing Director

Ian Poole, Finance Director and Company Secretary


T: +44 (0)1902 328 700

 




Houlihan Lokey UK Limited (Nominated Advisor)

Tim Richardson


T: +44 (0)20 7484 4040







CHAIRMAN'S STATEMENT

 

Overview

 

The Group's revenue for the 6 months ended 30 June 2022 (the "period") was £37.9 million, an increase of £2.2 million compared with the same period in 2021 and a record for the first half year. Operating profit for the period was £8.5 million compared with £8.0 million in 2021, an increase of £0.5 million, reflecting the increased revenue. Overall, net funds increased by £5.2 million from £16.5 million as at 31 December 2021 to £21.7 million as at 30 June 2022.

 

Operations review

 

Revenue at Andrews Sykes Hire in the UK continues to grow and improved by 2.1% compared with the same period in 2021. Our businesses in the rest of Europe experienced a very strong increase in revenue, improving 16.8% compared to the same period in 2021. This result was driven by an exceptional performance from our Italian subsidiary, Nolo Climat, with revenues 92.9% up on the same period in 2021 with the early and prolonged high summer temperatures seen in Italy increasing demand in our cooling products. Consequently, the combined operating profit for the UK and European hire businesses in the period was £1.0 million above the level achieved in 2021.

 

Climat Location in France has continued to struggle with revenues 12.0% lower than the same period in 2021. As a result, the decision has been made to restructure the business in France and restructuring costs, including depot closures and redundancy, of £0.5m have been incurred during the period. We are confident that once completed, the restructuring will right-size the French operation and lead to profitable future growth.

 

Andrews Air Conditioning and Refrigeration, our UK air conditioning installation business, has traded broadly in line with last year. Whilst revenue increased 3.7% in the period compared to the first six months of 2021, it still remains 33.1% lower than the corresponding period in 2019. Operating profit decreased by £0.1m as compared to first half of 2021 as a continuing struggle to recruit and retain engineers negatively impacted results.

 

Khansaheb Sykes, our business based in the UAE, has continued to experience a difficult trading environment but pleasingly recorded revenue growth of 5.8% versus the first half of 2021. Despite this revenue increase and a favourable exchange rate between the Dirham and Sterling, operating profit is comparable to the first half of 2021 and continues to be depressed by increased historic bad debt charges.

 

Profit for the financial period and Earnings per Share

 

Profit before tax for the period was £8.5 million compared with £7.6 million in the same period last year. This £0.9m increase is attributable to the £0.5 million improvement in operating profit, a net foreign exchange gain on inter-company balances of £0.2 million (2021: loss of £0.1m) due to the weakening of Sterling compared with the Euro, and a net increase of £0.1 million in interest receivable resulting from the full repayment of the £3.0 million loan outstanding as at 31 December 2021 and higher interest received on cash deposits.

 

The total tax charge for the period increased by £0.7 million to £2.1 million (2021: £1.3 million), an effective tax rate of 24.0% (2021: 17.5%). The increase in the overall effective rate of tax is driven by a lower level of capital allowances claimed in the UK, coupled with higher profits generated in Italy which has a higher tax rate than in the UK.

 

Profit after tax in the period was £6.5 million (2021: £6.2 million). Basic earnings per share increased by 0.57 pence, or 3.9%, to 15.36 pence (2021: 14.79 pence) reflecting this increase in profit.

 

Dividends

 

The final dividend of 12.50 pence per ordinary share for the year ended 31 December 2021 was approved by members at the AGM held on 14 June 2022. Accordingly, on 17 June 2022 the Company made a total dividend payment of £5.27 million which was paid to shareholders on the register as at 27 May 2022.

 

The board continues to adopt the policy of returning value to shareholders whenever possible. The Group remains profitable, cash generative and financially strong. Accordingly, the board has decided to declare an interim dividend of 11.90 pence per ordinary share which in total amounts to £5.0 million.

 

In addition to the interim dividend, the board has assessed the company's ongoing cash requirements and has concluded that, as a result of the company's robust cash generation, a portion of the current cash reserves are surplus to the company's requirements. The board has therefore decided to return this surplus capital to Andrews Sykes shareholders by way of a special dividend of 16.60 pence per ordinary share which in total amounts to £7.0 million. Both the interim and special dividends will be paid on 4 November 2022 to shareholders on the register as at 7 October 2022.

 

Outlook

 

The second half of the year has started resiliently with record temperatures in the UK and Europe positively impacting demand for the Group's air conditioning units and chillers. This increased summer demand leads management to be optimistic over the full year results. In the longer term, management remains optimistic that the business will continue to improve but are mindful of the current economic climate and the impact that heightened energy prices, inflation and recession risk can pose to the business and customer demand.  

 

 

 

JG Murray

Chairman

27 September 2022



 

Consolidated Income Statement

for the six months ended 30 June 2022

 

 

 

Note

Unaudited
six months ended
30 June 2022

Unaudited
six months ended
30 June 2021

Year ended
31 December 2021



£000

£000

£000

Revenue

2

37,903

35,693

75,219

Cost of sales


(15,338)

(15,064)

(29,001)

Gross profit


22,565

20,629

46,218

Distribution costs


(6,846)

(6,386)

(14,066)

Administrative expenses


(7,230)

(6,412)

(10,759)

Other operating income


-

124

151

Operating profit


8,489

7,955

20,074

 


 



EBITDA*


13,181

12,402

28,946

Depreciation and impairment losses


(3,444)

(3,399)

(6,628)

Depreciation of right-of-use assets


(1,528)

(1,622)

(3,111)

Profit on the sale of plant and equipment and right-of-use assets


280

574

867

Operating profit


8,489

7,955

20,074

Finance income

3

316

7

24

Finance costs

3

(278)

(401)

(599)

Profit before tax


8,527

7,561

19,499

Tax expense

4

(2,050)

(1,322)

(3,959)

Profit for the period from continuing operations attributable to equity holders of the Parent Company


6,477

6,239

15,540



 



Earnings per share from continuing operations:

 

 



Basic and diluted

5

15.36p

14.79p

36.85p

 

 

Dividend per equity share paid during the period


 

 

12.50p

 

 

11.50p

 

 

23.40p



 



Proposed dividend per equity share


11.90p

11.90p

12.50p

Proposed special dividend per equity share


16.60p

-

-

 

 

* Earnings before interest, taxation, depreciation, profit on sale of property, plant and equipment, amortisation and non-recurring items.

 



Consolidated Statement of Comprehensive Total Income

for the six months ended 30 June 2022

 

 

 

 

Unaudited
six months ended
 30 June
2022

Unaudited
six months ended
30 June
2021


Year ended
31 December
 2021


£000

£000

£000

 


 



 

Profit for the period

6,477

6,239

15,540

 

Other comprehensive income

 



 

Currency translation differences on foreign currency operations

926

(640)

(954)

 

Net other comprehensive income/ (expense) that may be reclassified to profit and loss

926

(640)

(954)

 

 

Re-measurement of defined benefit pension assets and liabilities

2,567

2,476

4,430

 

Related deferred tax

 

(898)

(619)

(1,551)

 

Net other comprehensive income that will not be reclassified to profit and loss

1,669

1,857

2,879

 

 

Other comprehensive income for the period net of tax

 

2,595

1,217

1,925

 

Total comprehensive income for the period attributable to equity holders of the Parent Company

 

9,072

 

 

7,456

 

 

17,465

 

 







 

 

 



 

 

Consolidated Balance Sheet

At 30 June 2022

 

 

 

 

 

Unaudited
30 June
2022

 

Unaudited
30 June
2021

 

31 December
2021



£000


£000


£000

Non-current assets

 

 

 


 


  Property, plant and equipment

 

20,091

 

21,761

 

20,877

  Right-of-use assets

 

12,125

 

11,594

 

12,423

  Prepayments

 

-

 

42

 

-

  Deferred tax assets

 

-

 

7

 

-

  Defined benefit pension scheme surplus

 

9,392

 

3,606

 

6,137


 

41,608

 

37,010

 

39,437

Current assets

 

 

 


 


  Stocks

 

5,205

 

7,821

 

5,660

  Trade and other receivables

 

18,749

 

18,584

 

19,796

  Current tax asset

 

-

 

268

 

-

  Cash and cash equivalents

 

34,430

 

24,717

 

32,443

 

 

58,384

 

51,390

 

57,899

 

 

 

 


 


Current liabilities

 

 

 


 


  Trade and other payables

 

(14,178)

 

(14,726)

 

(13,587)

  Current tax liabilities

 

(485)

 

-

 

(265)

  Bank loans

 

-

 

(2,995)

 

(3,000)

  Right-of-use lease obligations

 

(2,625)

 

(2,539)

 

(2,602)

 

 

(17,288)

 

(20,260)

 

(19,454)

Net current assets

 

41,096

 

31,130

 

38,445

Total assets less current liabilities

 

82,704

 

68,140

 

77,882

 

 

 

 


 


Non-current liabilities

 

 

 


 


  Right-of-use lease obligations

 

(10,064)

 

(9,510)

 

(10,332)

  Deferred tax liability

 

(3,124)

 

-

 

(1,959)

  Provisions

 

(2,096)

 

-

 

(1,971)

 

 

(15,284)

 

(9,510)

 

(14,262)

 

 

 

 


 


Net assets

 

67,420

 

58,630

 

63,620

 

 

 

 


 


Equity

 

 

 


 


  Called up share capital

 

422

 

422

 

422

  Share premium

 

13

 

13

 

13

  Retained earnings

 

62,845

 

54,667

 

59,971

  Translation reserve

 

3,894

 

3,282

 

2,968

  Other reserve

 

246

 

246

 

246

Total equity

 

67,420

 

58,630

 

63,620



 

 Consolidated Cash Flow Statement

for the six months ended 30 June 2022

 

 

 

 

 

Unaudited
six months ended
30 June
2022

 

Unaudited
six months ended
30 June
2021

 

Year ended
31 December
2021

 

 

£000

£000

£000

Operating activities

 

 

 

 

 


Profit for the period

 

6,477

 

6,239

 

15,540

Adjustments for:

 

 

 


 


Tax charge

 

2,050

 

1,322

 

3,959

Finance costs

 

278

 

401

 

599

Finance income

 

(316)

 

(7)

 

(24)

Profit on disposal of property, plant and equipment and right-of-use assets

 

 

(280)

 

 

(574)

 

 

(867)

Depreciation of property, plant and equipment

 

3,444

 

3,399

 

6,628

Depreciation of right-of-use assets

 

1,528

 

1,621

 

3,111

Difference between pension contributions paid and amounts recognised in the Income Statement

 

 

(628)

 

 

(625)

 

 

(1,194)

Decrease/ (increase) in inventories

 

639

 

65

 

(635)

Decrease/ (increase) in receivables

 

1,669

 

(1,500)

 

(2,653)

Increase in payables

 

330

 

2,534

 

2,322

Movement in provisions

 

125

 

-

 

1,112

Cash generated from continuing operations

 

15,316

 

12,875

 

27,898

Interest paid

 

(278)

 

(284)

 

(574)

Corporation tax paid

 

(1,553)

 

(2,694)

 

(3,735)

Net cash inflow from operating activities

 

13,485

 

9,897

 

23,589

 

 

 

 


 


Investing activities

 

 

 


 


  Disposal of property, plant and equipment

 

302

 

722

 

1,173

  Purchase of property, plant and equipment


(2,380)

 

(2,794)

 

(2,530)

  Interest received


256

 

-

 

9

Net cash outflow from investing activities


(1,822)

 

(2,072)

 

(1,348)



 

 


 


Financing activities


 

 


 


  Loan repayments


(3,000)

 

(500)

 

(500)

  Capital repayments for right-of-use lease

  Obligations


 

(1,471)

 

 

(1,547)

 

 

(2,951)

  Equity dividends paid


(5,272)

 

(4,850)

 

(9,869)

 

Net cash outflow from financing activities


 

(9,743)

 

 

(6,897)

 

 

(13,320)

 


 

 


 


 

 

Net increase in cash and cash equivalents


 

 

1,920

 

 

 

928

 

 

 

8,921

 


 

 


 


 

Cash and cash equivalents at the start of the period

 


 

32,443

 

 

24,012

 

 

24,012

Effect of foreign exchange rate changes


67

 

(223)

 

(490)

 

Cash and cash equivalents at the end of the period

 


 

34,430

 

 

24,717

 

 

32,443

 


 

 


 


 


 

 


 




 

Consolidated Statement of Changes in Equity

for the six months ended 30 June 2022

 


Share capital

 

 

Share premium

 

 

Translation reserve

 

Capital

 redemption reserve

UAE legal reserve

Netherlands capital reserve

Retained earnings

Attributable to equity holders of the parent











£000

£000

£000

£000

£000

£000

£000

£000










At 31 December 2020

422

13

3,922

158

79

9

51,421

56,024

Profit for the period

-

-

-

-

-

-

6,239

6,239

Other comprehensive (expense)/ income for the period net of tax

-

-

(640)

-

-

-

1,857

1,217

Total comprehensive (expense)/ income

-

-

(640)

-

-

-

8,096

7,456

Dividends paid

-

-

-

-

-

-

(4,850)

(4,850)

Total of transactions with shareholders

-

-

-

-

-

-

(4,850)

(4,850)










At 30 June 2021

422

13

3,282

158

79

9

54,667

58,630










Profit for the period

-

-

-

-

-

-

9,301

9,301

Other comprehensive (expense)/ income for the period net of tax

-

-

(314)

-

-

-

1,022

708

Total comprehensive (expense)/ income

-

-

(314)

-

-

-

10,323

10,009

Dividends paid

-

-

-

-

-

-

(5,019)

(5,019)

Total of transactions with shareholders

-

-

-

-

-

-

(5,019)

(5,019)










At 31 December 2021

422

13

2,968

158

79

9

59,971

63,620










Profit for the period

-

-

-

-

-

-

6,477

6,477

Other comprehensive income for the period net of tax

-

-

926

-

-

-

1,669

2,595

Total comprehensive income

-

-

926

-

-

-

8,146

9,072

Dividends paid

-

-

-

-

-

-

(5,272)

(5,272)

Total of transactions with shareholders

-

-

-

-

-

-

(5,272)

(5,272)










At 30 June 2022

422

13

3,894

158

79

9

62,845

67,420

 

 

 

 

 

 

 

 

Notes to the Interim Financial statements

 

1              General information and accounting policies

 

These interim financial statements have been prepared in accordance with the recognition and measurement principles of international accounting standards in conformity with the requirements of the Companies Act 2006.

 

The information for the 12 months ended 31 December 2021 does not constitute the Group's statutory accounts for 2021 as defined in Section 434 of the Companies Act 2006. Statutory accounts for 2021 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These interim financial statements, which were approved by the Board of Directors on 27 September 2022, have not been audited or reviewed by the auditors.  

 

Basis of preparation

 

The interim financial statement has been prepared using the historical cost basis of accounting except for:

(i)            Properties held at the date of transition to IFRS which are stated at deemed cost;

(ii)           Assets held for sale which are stated at the lower of (i) fair value less anticipated disposal costs and (ii) carrying value;

(iii)          Derivative financial instruments (including embedded derivatives) which are valued at fair value; and

(iv)          Pension scheme assets and liabilities calculated at fair value in accordance with IAS 19

 

The annual financial statements of the Group are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

 

Accounting policies

 

The principal accounting policies applied in preparing the interim Financial Statements comply with international accounting standards in conformity with the requirements of the Companies Act 2006 and are consistent with the policies set out in the Annual Report and Accounts for the year ended 31 December 2021.

 

No new standards or interpretations issued since 31 December 2021 have had a material impact on the accounting of the Group.

Functional and presentational currency

The financial statements are presented in pounds Sterling because that is the functional currency of the primary economic environment in which the group operates.

 


 

2              Revenue

An analysis of the Group's revenue is as follows:


 

 


 



Unaudited

six months

ended

30 June

2022

 

£000

Unaudited

six months

ended

30 June

2021

 

£000

 

Year ended

31 December

2021

 

£000

Continuing operations







Revenue outside the scope of IFRS 15 and recognised as lease income in accordance with IFRS 16:




Hire

 



33,772

31,627

67,734

Revenue recognised at a point in time in accordance with IFRS 15:

 



Sales

 



2,739

2,709

4,630

Maintenance

 



665

752

1,368

Installation and sale of units

 



727

605

1,487

Group consolidated revenue from the sale of goods and provision of services

37,903

35,693

75,219

 

 



The geographical analysis of the Group's revenue by origination is:


 



Unaudited

six months

ended

30 June

2022

 

£000

Unaudited

six months

ended

30 June

2021

 

£000

 

Year ended

31 December

2021

 

£000

United Kingdom

 



23,225

22,743

47,917

Rest of Europe

 



10,365

8,874

19,442

Middle East and Africa




4,313

4,076

7,860





37,903

35,693

75,219









 

The geographical analysis of the Group's revenue by destination is not materially different to that by origination.

 

3              Finance income and costs


Unaudited
six months ended
30 June

2022

Unaudited
six months ended
30 June

2021

Year ended
31 December

2021

Finance income

£000

£000

£000

Net interest on net defined benefit pension surplus

60

7

15

Intertest receivable on bank deposit accounts

31

-

9

Inter-company foreign exchange gains

225

-

-


316

7

24


 



Finance costs

 



Interest charge on bank loans and overdrafts

(25)

(20)

(44)

Interest charge on right-of-use lease obligations

(253)

(264)

(530)

Inter-company foreign exchange losses

-

(117)

(25)


(278)

(401)

(599)

4              Income tax expense

 

The total effective tax charge for the financial period represents the best estimate of the weighted average annual effective tax rate expected for the full financial year applying tax rates that have been substantively enacted by the balance sheet date. UK corporation tax has been provided at 19%. In the UK budget on 15 March 2021, the chancellor announced that the rate of corporation tax in the UK will increase from 19% to 25% with effect from 1 April 2023. This increase will increase the amount of corporation tax payable in the UK. Deferred tax has been calculated based on the rates that the directors anticipate will apply when the temporary timing differences are expected to reverse.

 


Unaudited

six months ended

30 June

2022

Unaudited

six months ended

30 June

2021

 

Year ended

31 December

2021


£000

£000

£000

Current tax

 



UK corporation tax at 19% (June and December 2021: 19%)

1,139

736

2,253

Adjustments in respect of prior periods 

-

(21)

(657)


1,139

715

1,596

Overseas tax

644

530

1,251

 

Total current tax charge

 

1,783

 

1,245

 

2,847


 



Deferred tax

 



Origination and reversal of timing differences

126

386

712

Effect of tax rate change

-

(309)

(97)

Adjustments in respect of prior periods 

141

-

497

Total deferred tax charge/ (credit)

267

77

1,112

 

Total tax charge for the financial period

 

2,050

 

1,322

 

3,959

 

5              Earnings per share

 

Basic earnings per share

The basic figures have been calculated by reference to the weighted average number of ordinary shares in issue and the earnings as set out below. There are no discontinued operations in any period.

 


Unaudited

six months ended

30 June

2022

Unaudited

six months ended

30 June

2021

 

Year ended

31 December

2021


 



Weighted average number of ordinary shares

42,174,359

42,174,359

42,174,359

 

 



 

£000

£000

£000

 

Basic earnings

 

6,477

 

6,239

 

15,540

 

 



 

pence

pence

pence

 

Basic earnings per ordinary share

 

15.36

 

14.79

 

36.85

 

Diluted earnings per share

There were no dilutive instruments outstanding as at 30 June 2022 or either of the comparative periods and therefore there is no difference in the basic and diluted earnings per share for any of these periods. There were no discontinued operations in any period.

 

 

6              Dividend payments

 

Dividends declared and paid on ordinary one pence shares during the 6 months ended 30 June 2022 were as follows:

 


 

Paid during the six months ended 30 June 2022


 

 

 

 

Pence per share

 

Total dividend paid

£000

Final dividend for the year ended 31 December 2021 paid on 17 June 2022 to members on the register as at 27 May 2022

 

 

12.50p

 

5,272

 

The above dividend was charged against reserves during the 6 months ended 30 June 2022.

 

On 27 September 2022 the directors declared an interim dividend of 11.90 pence per ordinary share which in total amounts to £5,019,000. In addition, a special dividend of 16.60 pence per ordinary share which in total amounts to £7,001,000 was also declared. These will be both be paid on 4 November 2022 to shareholders on the register as at 7 October 2022 and will be charged against reserves in the second half of 2022.

 

Dividends declared and paid on ordinary one pence shares during the 6 months ended 30 June 2021 were as follows:

 


 

Paid during the six months ended 30 June 2021


 

 

 

 

Pence per share

 

Total dividend paid

£000

Final dividend for the year ended 31 December 2020 paid on 18 June 2021 to members on the register as at 28 May 2021

 

 

11.50p

 

4,850

 

The above dividend was charged against reserves during the 6 months ended 30 June 2021.

 

Dividends declared and paid on ordinary one pence shares during the 12 months ended 31 December 2021 were as follows:


 

Paid during the year ended 31 December 2021


 

 

 

 

Pence per share

 

Total dividend paid

£000

Final dividend for the year ended 31 December 2020 paid on 18 June 2021 to members on the register as at 28 May 2021

 

 

11.50p

 

4,850

Interim dividend declared on 27 September 2021 and paid on 5 November 2021 to members on the register as at 8 October 2021

 

11.90p

5,019


 

23.40p

9,869

 

The above dividends were charged against reserves during the 12 months ended 31 December 2021.

 

7              Pensions

 

The Group closed the UK Group defined benefit pension scheme to future accrual as at 29 December 2002. The assets of the defined benefit pension scheme continue to be held in a separate trustee administered fund. Over recent years the Group has taken steps to manage the ongoing risks associated with its defined benefit liabilities.

 

As at 30 June 2022 the Group had a net defined benefit pension scheme surplus, calculated in accordance with IAS 19  using the assumptions as set out below, of £9,392,000 (30 June 2021: £3,606,000; 31 December 2021: £6,137,000). The asset has been recognised in the financial statements as the directors are satisfied that it is recoverable in accordance with IFRIC 14.

 

Following the triennial recalculation of the funding deficit as at 31 December 2019, a revised schedule of contributions and recovery plan was agreed with the pension scheme trustees in March 2021 and was effective from 1 January 2021.  In accordance with this schedule of contributions and recovery plan, the Group will be making regular contributions of £110,000 per month for the period 1 January 2021 to 31 December 2022, and £10,000 per month for the period 1 January 2023 to 31 December 2025 or until a revised schedule of contributions is agreed, if earlier. Consequently, the Group expects to make total contributions to the defined benefit pension scheme of £1,320,000 during 2022.

 

Assumptions used to calculate the scheme surplus

The IAS 19 figures are based on a number of actuarial assumptions as set out below, which the actuaries have confirmed they consider appropriate. 

 

 


30 June

2022

30 June

2021

31 December

2021





Rate of increase in pensionable salaries

n/a

n/a

n/a

Rate of increase in pensions in payment

3.2%

3.3%

3.5%

Discount rate

3.8%

1.8%

1.8%

Inflation assumption - RPI

3.2%

3.3%

3.5%

Inflation assumption - CPI

2.6%

2.7%

2.9%

Percentage of members taking maximum tax-free lump sum on retirement

 

75%

 

75%

 

75%

 

 

The demographic assumptions used for 30 June 2022, were the same as used in 31 December 2021, 30 June 2021 and the last full actuarial valuation performed as at 1 April 2020.

 

Assumptions regarding future mortality experience are set based on advice in accordance with published statistics. The mortality table used at 30 June 2022, 30 June 2021 and 31 December 2021 is 100% S3PA CMI2020 with a 1.25% per annum long term improvement for both males and females, heavy tables for males and medium tables for females.

 

Valuation

The defined benefit scheme funding has changed under IAS 19 as follows:

 

 

 

Funding status

           Unaudited

 six months to

30 June

2022

£000

             Unaudited

 six months to

30 June

2021

£000

 

Year to

31 December

2021

£000

Scheme assets at end of period

 

40,648

46,958

48,475

Benefit obligations at end of period

(31,256)

(43,352)

(42,338)

 

 



Surplus in scheme

9,392

3,606

6,137

 

 



 

The increase in the pension surplus since December 2021 is mainly due to a decrease in the value of liabilities as a consequence of an increase in bond yields increasing the discount rate.

 



 

8              Net funds and movement in financing liabilities

 

 

 

 

Unaudited

six months ended

30 June

2022

Unaudited

six months ended

30 June

2021

 

Year ended

31 December

2021


£000

£000

£000


 



Cash and cash equivalents per consolidated cashflow statement

34,430

24,717

32,443


 



Bank loans at the beginning of the period

(3,000)

(3,491)

(3,491)

Loans repaid

3,000

500

500

Other non-cash changes

-

(4)

(9)

Bank loans at the end of the period

-

(2,995)

(3,000)

 

 

 



Right-of-use lease obligations at the beginning of the period

(12,934)

(12,849)

(12,849)

Capital repayments for right-of-use lease obligations

1,472

1,547

2,951

New right-of-use leases entered into during the period

(1,204)

(963)

(3,325)

Non-cash movements re: termination of right-of-use lease obligations

77

36

40

Foreign exchange

(100)

180

249

Right-of-use lease obligations at the end of the period

(12,689)

(12,049)

(12,934)


 



Gross debt

(12,689)

(15,044)

(15,934)


 



Net funds

21,741

9,673

16,509


 



 

 

9              Distribution of interim financial statements

 

Following a change in regulations in 2008, the Company is no longer required to circulate this half year report to shareholders. This enables us to reduce costs associated with printing and mailing and to minimise the impact of these activities on the environment. A copy of the interim financial statements is available on the Company's website, www.andrews-sykes.com.

 

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