NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION
API Group plc
Response to shareholder letter
For immediate release
9 February 2012
The Board of API Group plc ("API" or the "Company") confirms that it has received a letter from Steel Partners Holdings L.P. ("Steel"), which owns 32.4% of API's issued share capital and has a representative on the Board, suggesting that the Company is put up for sale. The Board notes the announcement released by Steel this morning via PR Newswire and today's resulting share price movement.
Steel indicated to the Board some months ago that it was considering a possible offer for the Company but, despite ongoing discussions, has not subsequently clarified its intentions. The statement from Steel that it is not their current intention to continue those discussions is noted.
No other approaches or indicative offers for the Company have been received and the Board is not currently engaged in any sale process. However, the Board takes the views of all its shareholders extremely seriously and will give due consideration to the proposal from Steel and keep shareholders informed of any significant developments.
13 December 2011 API Group PLC ("API" or the "Company")
Exercise of options
API announces that application has been made for the admission to AIM of 115,668 new ordinary shares of 1 penny each ("Ordinary Shares") in the Company, pursuant to an exercise of options.
The new Ordinary Shares will rank pari passu in all respects will the Company's existing Ordinary Shares and dealings are expected to commence on 19 December 2011.
Following admission, the Company's enlarged issued share capital will comprise 76,748,730 Ordinary Shares, with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore the total number of Ordinary Shares in the Company with voting rights will be 76,748,730. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.
For further information, please contact:
API Group plc Andrew Turner, Group Chief Executive Chris Smith, Group Finance Director
Tel: +44 (0) 1625 650334
Cairn Financial Advisers LLP Tony Rawlinson / Avi Robinson
Tel: +44 (0) 20 7148 7900
Numis Corporate Broking James Serjeant
Tel: +44 (0) 20 7260 1000
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:ii
API GROUP PLC
2 Reason for the notification (please tick the appropriate box or boxes):
An acquisition or disposal of voting rights
?
An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached
An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments
An event changing the breakdown of voting rights
Other (please specify):
3. Full name of person(s) subject to the notification obligation:iii
HARGREAVE HALE LIMITED
4. Full name of shareholder(s) (if different from 3.):iv
DISCRETIONARY CLIENTS
5. Date of the transaction and date on which the threshold is crossed or reached:v
08 DECEMBER 2011
6. Date on which issuer notified:
09 DECEMBER 2011
7. Threshold(s) that is/are crossed or reached: vi, vii
5%
8. Notified details:
A: Voting rights attached to sharesviii, ix
Class/type of shares
if possible using the ISIN CODE
Situation previous to the triggering transaction
Resulting situation after the triggering transaction
Number of Shares
Number of Voting Rights
Number of shares
Number of voting rights
% of voting rights x
Direct
Indirect
Direct xi
Indirect xii
Direct
Indirect
GB0000592062
3,767,000
3,767,000
3,937,000
3,937,000
5.1375%
B: Qualifying Financial Instruments
Resulting situation after the triggering transaction
Type of financial instrument
Expiration date xiii
Exercise/ Conversion Period xiv
Number of voting rights that may be acquired if the instrument is exercised/ converted.
% of voting rights
C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi
Resulting situation after the triggering transaction
Type of financial instrument
Exercise price
Expiration date xvii
Exercise/ Conversion period xviii
Number of voting rights instrument refers to
% of voting rights xix, xx
Nominal
Delta
Total (A+B+C)
Number of voting rights
Percentage of voting rights
3,937,000
5.1375%
9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable: xxi
2,105,000 of these shares are held for unit trusts operated by Marlborough Fund Managers Ltd for whom Hargreave Hale Ltd manages the portfolio of investments on a discretionary basis. The remaining shares are held for other Discretionary clients.
Proxy Voting:
10. Name of the proxy holder:
11. Number of voting rights proxy holder will cease to hold:
12. Date on which proxy holder will cease to hold voting rights:
13. Additional information:
14. Contact name:
David Clueit
15. Contact telephone number:
01253 754739
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
Interim results for the six months ended 30 September 2011
First half revenues of £58.5m, 24% ahead of last year.
Operating profits from continuing operations 51% higher at £3.8m, operating margin 6.4%.
No exceptional charge for flood damage at New Jersey manufacturing facility compared to initial estimate of a £700k net loss.
Profit before tax up 123% to £2.9m (2010: £1.3m from continuing operations).
Basic earnings per share 3.6p (2010: 1.5p).
IAS 19 pension deficit (net of deferred tax) down to £5.1m from £11.1m last year and £7.2m at March 2011.
Net debt £10.0m compared to £14.4m at 30 September 2010 and £8.9m at 31 March 2011. Net debt to EBITDA 1.0x (2010: 1.7x).
Laminates investment on track, with expected start-up in April 2012 and incremental revenues of £15-20m pa.
Commenting, API's Chief Executive, Andrew Turner said: "I am pleased to report that the Group has maintained its momentum of sales growth and profit improvement in spite of the challenging economic climate and volatile raw material prices. Management remains focused on improving the quality and resilience of the businesses and further enhancing our product and service offering to customers.
"We are conscious that the ongoing sovereign debt crisis could affect confidence in our customer base and consumer end markets, although the Group's improved financial condition leaves it better placed to weather any difficulties that may lie ahead."
Enquiries:
Andrew Turner
Chief Executive, API Group plc
+44 (0) 1625 650334
Chris Smith
Finance Director, API Group plc
+44 (0) 1625 650334
Tony Rawlinson
Nominated Adviser Cairn Financial Advisers LLP
+44 (0) 20 7148 7900
James Serjeant
Broker Numis Securities
+44 (0) 20 7260 1000
REPORT ON THE INTERIM RESULTS FOR THE 6 MONTH PERIOD ENDED 30 SEPTEMBER 2011
GROUP INCOME STATEMENT Revenue from continuing operations of £58.5m was 25% higher at constant exchange rates compared to the same period last year and 24% ahead at actual rates. In comparison to the preceding six month period, revenues were up 11%. Higher volumes accounted for 15% revenue growth, with the balance coming from higher selling prices. Price increases broadly recovered the impact of the significant raw material price rises experienced in 2011. Operating profits from continuing operations of £3.8m increased £1.3m compared to the first half of last year, representing an operating margin of 6.4%. Gross profit margin fell from 24.3% to 23.6% due to the dilution effect of higher material costs and selling prices. Adjusted for raw material cost pass-through, gross profit margin would have been 1.5% ahead at 25.8%. The Group has continued to keep its operating costs under control, with production and overhead expenses increasing by only 4% to accommodate the 15% growth in volumes. In this Interim Report, segmental reporting has been expanded to report on four operating divisions. During the period, the management of API Holographics, based in Salford, UK, was separated from Foils Europe to provide increased focus on the different growth strategies appropriate to the security holographic and decorative foils markets. Under the new structure, Foils Europe now comprises the manufacturing facility at Livingston, Scotland and the six foil distribution businesses in France, Italy, Germany, Australia, New Zealand and Hong Kong. Prior year comparative figures have been adjusted in line with the new basis of reporting. All the Group's businesses increased revenues, both year on year and compared to the preceding six months, with Laminates ahead 44% and 10% respectively. Growth in operating profits was particularly encouraging in Foils Americas and Holographics, while Laminates delivered another impressive set of results. Foils Europe was the only disappointment, with operating profits down by £0.5m, although still £0.3m ahead of the preceding six months. In October, the Group announced that its manufacturing facility in New Jersey, US, had sustained significant damage and disruption caused by Hurricane Irene. At the time, it was estimated that the net financial impact could be up to £0.7m. After further assessment and dialogue with insurers, that estimate has been revised downward and, whilst there may still be some cash cost, the charge to the income statement is now expected to be zero. The Group's net financing costs of £0.9m were down £0.3m due to lower average debt and interest rates. Pension related charges were in line with last year. Profit after tax for continuing operations was £2.6m, compared to £1.1m at the interim stage last year. The tax charge of £0.2m represents a rate of 9% on profit before tax, in line with the effective rate for the year to 31 March 2011. A deferred tax charge in the UK of £0.6m was partly offset by recognition of a further £0.4m of tax assets in light of continuing profitability. Basic earnings per share from continuing operations were 3.6p (2010: 1.5p).
REVIEW OF OPERATIONS Foils Europe Despite 5% lower volumes, Foils Europe revenues increased by 6% to £15.2m (4% at constant exchange rates) as a consequence of higher selling prices. The Italian distribution operation enjoyed further growth, partially compensating for weaker demand levels in other territories, especially the UK and France. Overall, the business continued to make good progress in the label sector but this was offset by reduced sales to other packaging and print segments and to third party distributors. Selling price increases, initiated during late 2010, were effective in recovering the impact of the earlier rises in polyester film costs. However, as film prices started to moderate, the business experienced a rapid escalation in solvent costs due to capacity outages at producers. As a consequence, the recovery in margins from higher selling prices was less than expected. With lower volumes and slightly higher operating costs, profits were a modest £0.3m; £0.25m ahead of the previous six months but £0.5m lower than the first half of last year.
Foils Americas Reported sales revenues for Foils Americas rose 7% to £12.5m. At constant exchange rates sales were 13% up on the first half of last year and 10% higher than the prior six months, due primarily to the pass-through of higher raw material costs in increased selling prices. Volumes were flat overall as demand for the business's market leading metallic flake intermediary compensated for lower activity on foils for the packaging and graphics sectors. With the reversal of margin erosion suffered last year from rapidly increasing raw material costs, as well as improved sales mix and lower operating expenses, profits increased to £0.7m (ROS of 5.5%) from break even at the interim stage last year and £0.2m in the six months to March 2011.
Holographics Holographics sales grew by 48% compared to the same period last year and were 11% higher than the previous six months. Third party sales, predominantly foils and films for brand protection and security applications, were ahead by 43%, benefitting from increased spend on product development and sales & marketing. Sales of decorative holographic products to sister companies within the Group increased by 57%, due especially to a significant packaging development project satisfied jointly with API Laminates. Added value margins improved in the period as pricing caught up with earlier increases in raw material costs. The business benefited strongly from the impact of higher volumes on production efficiencies and fixed cost recovery, resulting in first half operating profits of £0.9m (ROS of 14%), up from £0.2m for the same period last year and £0.4m for the preceding six months.
Laminates Laminates revenues increased to £27.7m as a number of key development projects moved to full production, a rise of 44% on the same period last year and 10% higher than the preceding six months. Growth over the second half of last year was predominantly due to demand from the tobacco sector, whilst orders for alcoholic drinks packaging remained buoyant. Approximately 25% of year-on-year growth was the result of increased costs being passed through to customers for higher specification and higher priced raw materials. Further input cost increases of £0.5m were absorbed by the business in order to secure a number of key supply positions. As a result, the drop-through to operating profit from the headline sales growth was restricted to £0.4m. The business continued to keep a firm control of operating expenses and completed the first half year with profits of £2.8m (2010: £2.4m), an ROS of 10.1%. Following the Company's announcement in July 2011 outlining a major new supply agreement, the business is progressing with its investment in new production equipment and remains on track to start supplies in April 2012.
CASH FLOW AND BORROWINGS The Group experienced a net cash inflow from operating activities of £0.3m, compared to £2.7m for the same period last year. Positive cash flow from improved trading results was offset by a working capital outflow of £3.8m (£0.1m last year) to support increased activity and a re-alignment of payment terms with suppliers. Working capital efficiency, measured by reference to trailing three month sales, ended the period at 11.9% compared to 11.4% a year earlier and 8.9% at March 2011. Capital expenditure of £1.2m was £0.6m higher than the first six months of last year, with £0.9m relating to the customer-led investment project in Laminates. A further £1.2m is due to be spent on this project by the end of the financial year. Group net debt, at £10.0m, compares to £8.5m at 31 March 2011, and £14.4m at 30 September 2010. The Group's main lending arrangements are with Barclays Bank plc in the UK and Wells Fargo in the US. Both facilities are in place until July 2013. Gearing at 30 September 2011 was 50% compared to 148% 12 months earlier and 56% at 31 March 2011. The ratio of the Group's net debt to trailing 12 month EBITDA fell to 1.0x compared to 1.7x at the interim stage last year.
PENSION DEFICIT The IAS 19 valuation of the UK and US defined benefit pension schemes fell to £6.9m, from £15.3m at 30 September 2010 and £9.7m at March 2011. Net of associated deferred tax assets, the deficit is now valued at £5.2m, down from £11.2m at September last year. In the latest six months period, scheme assets were affected by the general fall in equity values. However, this was more than compensated by a reduction of £6.5m in liabilities relating to the UK scheme, where member data has been updated in line with the latest triennial funding valuation. The impact on scheme liabilities from movements in discount rates and inflation assumptions during the six months since March 2011 was broadly neutral. Market yields on benchmark AA rated corporate bonds fell by 0.3% whilst estimates of long term CPI inflation also reduced, by 0.4% to 2.1%. The result of the UK scheme's 2010 triennial funding valuation is due to be approved by 31 December 2011. The process is well advanced and the Company anticipates no change to its current level of funding contributions.
OUR PEOPLE The Group continues to focus on providing customers with higher quality, more cost effective products and services. Our success in meeting our aspirations depends on the skill and commitment of our entire workforce. The Board therefore extends its thanks to all members of the API team for the progress which has been made in the last six months and for their continued contribution to the growth and development of the business.
OUTLOOK With raw material prices softening, the Foils businesses are expected to make further progress on margin recovery. On the other hand, a broad exposure to consumer spending in the US and Europe means that demand could be affected by macro-economic uncertainty and the prospect of slowing economic growth, especially in the Eurozone. The prospects for Laminates and Holographics are less tied to the general economy. Whilst a key project affecting both units is coming to a close, order books are holding up well and the pipeline of new business is encouraging. API Laminates is busy gearing up for its new major supply contract. The project remains on schedule for the start-up of supplies from April 2012 and, as previously announced, is expected to deliver additional revenues of £15-20m per annum. In spite of the higher capital expenditure to support the Laminates project, it is anticipated that the Group's overall level of debt will continue to reduce through the second half. Notwithstanding more extreme macro-economic scenarios, the Board remains confident that full year results will meet expectations and that the Group is well placed for further profitable growth over the medium term.
GROUP INCOME STATEMENT
for the six months ended 30 September 2011
Unaudited
Unaudited
Audited
6 months to 30 September 2011
6 months to 30 September 2010
Year to 31 March 2011
Note
£'000
£'000
£'000
Continuing operations
Revenue
2
58,545
47,032
99,963
Cost of sales
(44,752)
(35,598)
(76,386)
Gross profit
13,793
11,434
23,577
Other operating costs
(10,028)
(8,939)
(18,383)
Operating profit from continuing operations
2
3,765
2,495
5,194
Finance revenue
3
7
8
17
Finance costs
3
(884)
(1,159)
(2,354)
(877)
(1,151)
(2,337)
Profit from continuing operations before taxation
2,888
1,344
2,857
Tax expense
4
(246)
(269)
(265)
Profit from continuing operations
2,642
1,075
2,592
Discontinued operations
Loss from discontinued operations
5
-
(6,656)
(4,124)
Profit / (loss) for the period
2,642
(5,581)
(1,532)
Profit / (loss) attributable to equity holders of the parent
- continuing operations
2,642
1,075
2,592
- discontinued operations
-
(3,348)
(612)
2,642
(2,273)
1,980
Loss attributable to non-controlling interest
- discontinued operations
-
(3,308)
(3,512)
Profit / (loss) for the period
2,642
(5,581)
(1,532)
Earnings per share (pence)
Basic earnings per share from continuing operations
6
3.6
1.5
3.5
Diluted earnings per share from continuing operations
6
3.5
1.4
3.4
Basic earnings / (loss) per share on profit / (loss) for the period
6
3.6
(3.2)
2.7
Diluted earnings / (loss) per share on profit / (loss) for the period
6
3.5
(3.0)
2.6
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2011
Unaudited
Unaudited
Audited
6 months to 30 September 2011
6 months to 30 September 2010
Year to 31 March 2011
£'000
£'000
£'000
Profit / (loss) for the period
2,642
(5,581)
(1,532)
Exchange differences on retranslation of foreign operations
186
(309)
(392)
Exchange differences arising on net asset hedge
-
(121)
(121)
Change in fair value of effective cash flow hedges
462
(209)
(329)
Actuarial gains on defined benefit pension plans
2,410
1,105
6,586
Movement in deferred tax asset relating to defined benefit pension plans
(627)
(496)
(2,104)
Other comprehensive income for the period
2,431
(30)
3,640
Total comprehensive income and expense for the period, net of tax
5,073
(5,611)
2,108
Attributable to:
Equity holders of the parent
5,073
(2,293)
5,633
Non-controlling interest
-
(3,318)
(3,525)
5,073
(5,611)
2,108
GROUP BALANCE SHEET
at 30 September 2011
Unaudited
Unaudited
Audited
30 September 2011
30 September 2010
31 March 2011
Note
£'000
£'000
£'000
Assets
Non-current assets
Property, plant and equipment
17,239
17,567
16,804
Intangible assets - goodwill
5,188
5,188
5,188
Trade and other receivables
59
122
94
Deferred tax assets
4,684
7,045
5,478
27,170
29,922
27,564
Current assets
Trade and other receivables
17,631
16,602
16,848
Inventories
11,913
9,521
12,409
Other financial assets
172
-
-
Cash and short-term deposits
7
3,185
1,572
4,175
32,901
27,695
33,432
Assets of disposal group held for sale
-
8,642
-
Total assets
60,071
66,259
60,996
Liabilities
Current liabilities
Trade and other payables
18,547
16,637
21,952
Financial liabilities
8
3,695
2,798
2,830
Income tax payable
378
402
365
22,620
19,837
25,147
Non-current liabilities
Financial liabilities
8
9,767
13,614
10,514
Deferred tax liabilities
238
256
238
Provisions
81
93
85
Deficit on defined benefit pension plans
9
6,943
15,251
9,719
17,029
29,214
20,556
Liabilities attributable to disposal group held for sale
-
5,449
-
Total liabilities
39,649
54,500
45,703
Net assets
20,422
11,759
15,293
Equity
Called up share capital
766
701
766
Share premium
7,136
7,136
7,136
Other reserves
8,816
8,595
8,565
Foreign exchange reserve
445
2,889
259
Retained earnings
3,259
(9,619)
(1,433)
API Group shareholders' equity
20,422
9,702
15,293
Non-controlling interest
-
2,057
-
Total equity
20,422
11,759
15,293
GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2011
Equity share capital
Share premium
Other reserves
Foreign exchange reserve
Retained earnings
Total shareholders' equity
£'000
£'000
£'000
£'000
£'000
£'000
Balance at 1 April 2010
701
7,136
8,595
3,309
(7,805)
11,936
Total recognised income and expense for the period
-
-
-
(420)
(1,873)
(2,293)
Share based payments
-
-
-
-
59
59
Balance at 30 September 2010
701
7,136
8,595
2,889
(9,619)
9,702
Total recognised income and expense for the period
-
-
-
(80)
8,006
7,926
Transfer to income statement on disposal of subsidiaries
-
-
-
(2,550)
-
(2,550)
Issue of shares
65
-
-
-
-
65
Shares acquired by Employee Benefit Trust
-
-
(30)
-
-
(30)
Share based payments
-
-
-
-
180
180
Balance at 31 March 2011
766
7,136
8,565
259
(1,433)
15,293
Total recognised income and expense for the period
-
-
-
186
4,887
5,073
Shares acquired by Employee Benefit Trust
-
-
(11)
-
-
(11)
Transferred on exercise of share options
-
-
262
-
(262)
-
Share based payments
-
-
-
-
67
67
Balance at 30 September 2011
766
7,136
8,816
445
3,259
20,422
GROUP CASH FLOW STATEMENT
for the six months ended 30 September 2011
Unaudited
Unaudited
Audited
6 months to 30 September 2011
6 months to 30 September 2010
Year to 31 March 2011
Note
£'000
£'000
£'000
Operating activities
Group profit before tax from continuing operations
2,888
1,344
2,857
Adjustments to reconcile Group profit before tax from continuing operations to net cash flow from operating activities:
Operating loss from discontinued operations
-
(6,801)
(7,215)
Net finance costs
877
1,151
2,337
Depreciation of property, plant and equipment
1,212
1,688
2,942
Impairment of property, plant and equipment
-
5,850
5,850
(Profit) / loss on disposal of property, plant and equipment
-
(12)
28
Movement in fair value foreign exchange contracts
(112)
-
78
Share-based payments
67
59
239
Difference between pension contributions paid and amounts recognised in the income statement
(776)
(435)
(1,037)
Decrease / (increase) in inventories
533
1,279
(2,047)
Increase in trade and other receivables
(719)
(2,650)
(2,588)
(Decrease) / increase in trade and other payables
(3,669)
1,281
7,201
Movement in provisions
(4)
(4)
(12)
Cash generated from operations
297
2,750
8,633
Income taxes paid
(41)
(37)
(140)
Net cash flow from operating activities
256
2,713
8,493
Investing activities
Interest received
7
8
17
Purchase of property, plant and equipment
(1,192)
(567)
(1,153)
Sale of property, plant and equipment
-
49
21
Sale of subsidiary undertakings
-
-
1,783
Cash and cash equivalents of subsidiary undertakings sold
-
-
(296)
Net cash flow from investing activities
(1,185)
(510)
372
Financing activities
Interest paid
(384)
(852)
(1,480)
Proceeds from share issues
-
-
65
Purchase of shares by Employee Benefit Trust
(11)
-
(30)
New borrowings
-
1,562
1,214
Repayment of borrowings
(393)
(2,669)
(5,382)
Net cash flow from financing activities
(788)
(1,959)
(5,613)
(Decrease) / increase in cash and cash equivalents
(1,717)
244
3,252
Effect of exchange rates on cash and cash equivalents
(50)
86
13
Cash and cash equivalents at the beginning of the period
2,719
(546)
(546)
Cash and cash equivalents at the end of the period
7
952
(216)
2,719
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1 (a) Corporate information
The consolidated interim financial statements of API Group plc for the six months ended 30 September 2011 were authorised for issue in accordance with a resolution of the directors on 7 December 2011.
API Group plc is a public limited company incorporated and domiciled in England and Wales. The Company's shares are traded on the Alternative Investment Market of the London Stock Exchange.
The principal activities of the Group are the manufacture and distribution of specialty foils, films and laminated materials.
(b) Basis of preparation
The interim consolidated financial statements of the Group for the six months ended 30 September 2011 have been prepared in accordance with IAS 34 Interim Financial Reporting.
These interim consolidated financial statements are unaudited. They do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and therefore do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's latest annual financial statements as at 31 March 2011 which were prepared in accordance with International Financial Reporting Standards as adopted by the EU. The audited annual financial statements for the year ended 31 March 2011, which represent the statutory accounts for that period, and on which the auditors gave an unqualified opinion, have been filed with the Registrar of Companies.
The Directors consider that, after making appropriate enquiries, there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis in preparing these financial statements.
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2011.
2. SEGMENTAL INFORMATION
The Group produces monthly management information to enable the Board, including the Chief Executive Officer, to monitor the financial performance of its constituent parts. This information is analysed by business unit. Following the disposal of the China business, the residual businesses within the Asia Pacific unit are now managed and reported within the Foils Europe business unit. The Holographics business unit is now managed and reported separately from Foils Europe and comparative figures have been adjusted accordingly.
Unaudited
Unaudited
Audited
6 months to 30 September 2011
6 months to 30 September 2010
Year to 31 March 2011
Continuing operations
£'000
£'000
£'000
Total revenue by origin
Foils Europe
15,170
14,284
28,429
Foils Americas
12,512
11,691
23,151
Holographics
6,848
4,616
10,775
Laminates
27,672
19,233
44,321
62,202
49,824
106,676
Inter-segmental revenue
Foils Europe
495
562
1,095
Foils Americas
296
419
733
Holographics
2,827
1,797
4,855
Laminates
39
14
30
3,657
2,792
6,713
External revenue by origin
Foils Europe
14,675
13,722
27,334
Foils Americas
12,216
11,272
22,418
Holographics
4,021
2,819
5,920
Laminates
27,633
19,219
44,291
58,545
47,032
99,963
Segment result
Operating profit/(loss)
Foils Europe
274
797
857
Foils Americas
688
4
244
Holographics
948
155
567
Laminates
2,792
2,392
5,245
Segment result
4,702
3,348
6,913
Central costs
(937)
(853)
(1,719)
Total operating profit
3,765
2,495
5,194
3. FINANCE REVENUE AND FINANCE COSTS
Unaudited
Unaudited
Audited
6 months to 30 September 2011
6 months to 30 September 2010
Year to 31 March 2011
£'000
£'000
£'000
Finance revenue
Interest receivable on bank and other short term deposits
1
-
2
Other interest receivable
6
8
15
7
8
17
Finance costs
Interest payable on bank loans and overdrafts
(486)
(744)
(1,356)
Other interest payable
(7)
(4)
(24)
Finance cost in respect of defined benefit pension plans
Dec 8th, Numis retains their "Buy" and target price of 59p. I guess that will be raised once we start to see the higher level of business at API in 2012.
Api (LON:API) , the AIM listed company that makes specialist packaging materials using foils, holographics and laminates, said this morning that sales last year had surged by 26% to £100 million. A strong performance across all of the group’s divisions meant that operating profits from continuing operations doubled to £5.2 million, with pre-tax profits reaching £2.9 million against a £0.3 million loss previously. API’s packaging materials are found on the likes of products from Colgate Palmolive, Lindt, Lambert & Butler and even as security on tickets for the Commonwealth Games. Shares in the company have jumped from 9.5p to 37.25p during the last 12 months. During trading this morning the stock was down 3.75p as investors took profits but also reacted to caution in the company’s statement that rising raw material costs had caused problems last year and were a continuing cause for concern.
API said that trading during the early months of the new financial year had been broadly in line with the second half of 2010/11, with strong demand for laminates. However, fewer suppliers and higher oil process have conspired to push prices of raw materials ever higher although upward pressure on polyester film prices is expected to ease as new capacity comes on stream.
While all of API’s business units were profitable last year, particularly laminates, it was the foils business that suffered from sharp rise in raw materials costs. Efforts during the year to manage costs and boost margins saw API sell its 51% stake in a Chinese foils business, which left shareholders nursing a loss from discontinued operations of £0.6m. However, the rest of the figures received a broadly upbeat assessment from investors, with API’s IAS 19 pension down to £7.2 million from £11.8 million. Net debt was down from £18.5 million to £8.5 million and cash flow from operating activities topped £8.5 million, up from -£0.8 million in 2010. Basic earnings per share from continuing operations increased slightly to 3.5p from 3.4p.
API’s non-executive chairman, Richard Wright, said: “The year has seen a step change in many aspects of the group’s financial position and it is particularly encouraging that, despite facing the challenge of unprecedented increases in the cost of raw materials, the group has delivered its best trading performance for a number of years. Results will continue to be influenced by the uncertain economic climate and by customer decisions affecting our more significant supply positions. In the meantime, management is focussed on improving the quality and resilience of our earnings, and restoring margins in our foils businesses is a particular priority. Overall, recent progress has been encouraging and the Board continues to see good potential for additional profit growth and value creation.”
On the day of API's recent t/up, 8th April, Numis forecast 5.1p of earnings for 2012, which makes for around 40p and the feeling is for some final figs June 10th although API haven't cnfmd a date.
Further optimism about the future, at that time, and we should be moving north of 40p. Presumably we could be looking at some divi 'ere long?
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