RNS Number : 6284E
Tanfield Group PLC
30 September 2008
 

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The Tanfield Group Plc, the leading manufacturer of aerial work platforms and commercial electric vehicles, is pleased to announce its unaudited interim results for the six month period to 30 June 2008.

Financial Highlights

Corporate Highlights

Roy Stanley, Chairman, said: 

"It has been a very difficult time but we have managed through it. The business has been restructured and is operating normally, albeit in line with a reduced growth plan in the face of unpredictable market conditions. It is now time to hunker down with slower growth and run the business for sustainable profit and cash generation."


For further information:

The Tanfield Group Plc

+44 (0)845 1557 755

Darren Kell, CEO


Charles Brooks, FD




St. Helen's Capital plc

+44 (0)20 7628 5582

Ruari McGirr


David Johnson




Cenkos Securities plc

+44 (0)20 7397 8900

Stephen Keys




Fishburn Hedges

+44 (0)20 7839 4321

Morgan Bone

+44 (0)7767 622 967

Michelle James

+44 (0)7958 451 446




  CHAIRMAN'S STATEMENT

Financial Performance

The Group continued to make progress in the six months ended 30 June 2008. 

Turnover in the period was £92.8m, up 152% on H1 2007 (£36.8m). Profit from operations of £10.3m was up 91% (H1 2007 £5.4m).  Turnover increased 36% on the pro-forma numbers for the same period in 2007 (pro-forma numbers are adjusted to take into account the acquisition of Snorkel in August 2007).  Because of a market analysis and ongoing trading conditions, the Board felt it prudent to undertake an impairment review of its goodwill and other assets, particularly those arising from the acquisition of Snorkel International Inc in 2007. As a result there were a series of impairments totalling £75m, of which £48m arose from the impairment of Powered Access Goodwill and other intangible assets. These adjustments are non-cash items and result in loss after impairments of £65m.

The Balance Sheet after the impairments remains strong with net assets of £98m and excess of current assets over current liabilities of £82m. Cash at 30 June 2008 was £12m, at the end of September the cash figure is £12m.  The Group's cash flow forecasts anticipate an increase in the Group's cash balances during the 4th quarter aided by the unwinding of working capital.  Ernst & Young LLP were engaged by the Group to undertake a review of its cash flow forecasts, together with the underlying assumptions, for the remainder of the year. Having considered their report, the Board remains confident that: 

The business also has an unutilised debt facility in the USA of $35m.

Restructuring

We announced on July 1st that, following exceptional and unpredictable changes in our markets, our revised strategy would be to focus on cash conversion of profit and growing at a more moderate rate. The focus has been placed on being able to respond as quickly as possible to the rapid change in our trading environment. With this in mind, we have sized the business in line with expected market conditions. 

Business:  We have decided to withdraw from manufacturing the Norquip product range of airport equipment. Carrying the overhead attached to the business was not justified in relation to foreseeable market conditions. However, we will continue to provide spare parts and product support to all our existing Norquip customers. The Board will review this decision periodically.

Labour: The whole global organisation has been restructured to remove approximately 30% of our labour cost whilst ensuring we retain our key skills and competencies for the future. This will provide an annual cost saving in excess of £6m. We have identified areas of the operation that are not business critical and these have been suspended or discontinued permanently. Operational management has focused on cross training employees, driving out waste and improving velocity through the assembly operations.

Suppliers: In order to generate further cash we are reducing finished goods stock levels and building new machines, wherever possible, from existing inventory.  In addition we have, where necessary, cancelled or rescheduled all outstanding purchase orders to reduce our raw material inventory and future liabilities. Our supply chain team is working on consolidating our supply base and re-negotiating terms and conditions to allow us to improve our flexibility and responsiveness in line with customer expectations.

Trading & Trading Outlook

Powered Access

Trading in the first five months of the year was strong, with significant inroads being made into the US, Western European, and emerging markets, assisted by the breadth of the combined product range and brand equity afforded by the combination of UpRight and Snorkel. June was a turning point for our industry with a significant reduction in overall industry demand and a substantial swing in product mix. The emerging markets remain buoyant and our penetration into these areas continues but even here, as with the more developed markets, the rate of growth is being hindered by the availability of credit. The Directors believe that the long term outlook for the industry is still strong due to the fundamental market drivers.

Tanfield has responded rapidly to the market downturn for aerial work platforms, cutting capacity in line with market conditions. We believe that, globally, due to the swiftness of the downturn, there remains an excess inventory of finished machine stock in the industry. In management's view this excess will take time to be depleted due to the reduced capital expenditure the larger rental companies are now reporting.

North America remains the most challenging market, the global macro-economic conditions exacerbated by uncertainty over the forthcoming election, further compounded by geographically the greatest concentration of excess equipment. 

As anticipated, the UpRight distributor network is maintaining relatively strong sales to end users aided by an expanding range of equipment and our global presence. This goes some way to hedge against the global downturn in Powered Access, as UpRight is far less reliant on sales to major equipment rental companies than its competitors.  However this market has been affected by the availability of credit to our end users.

We continue to enhance UpRight's reputation for innovation and this month launched five new products at the APEX industry show in Holland. Three of these are "niche volume" machines, in line with our strategy of delivering products with no direct competitor in the market. 

Smith Electric Vehicles

The supply issues which we referred to in our July statement have been resolved. We now have robust supply chains in place for Edison and Newton. We have been successful in developing new electric drive trains and are working to put a robust supply chain in place for the Ampere, our latest generation electric car based van. 

The credit crunch is causing concern and delaying investment particularly within the volume end of the market. Registrations of commercial vehicles are significantly down as users reduce capital expenditure due to concerns over their own trading conditions and the availability of funding. Whilst we are therefore confident of further market and customer trials and further expansion into Europe, and North America, we believe that volume orders will be dependent upon the return of customer confidence.

However, interest in the Smith range of vehicles remains buoyant. We have just received an order for our largest 12 ton electric truck: a £1.1m contract to deliver 10 vehicles for TKMaxx. We have firm orders for 60 trial vehicles for the USA next year with letters of intent for another 200. Given the current economic climate the Board is considering a number of strategies in the way it is going to approach the opportunity in the USA. 

Summary and Outlook

Trading conditions for both Divisions remain challenging. However, we have taken swift and responsible action to preserve the Group's profitability and cash in the short to medium term, while providing a solid platform for steady growth once market conditions normalise.

Board Changes and Management

We continue to look to strengthen the Board. We will be seeking to appoint another non-executive director over the next few months. We have further strengthened the executive team with the appointment of Geoff Allison as Managing Director for the Electric Vehicle division. Geoff was formerly Plant Manager at the Vigo Centre facility and brings with him a wealth of experience in managing growth in international manufacturing environments. He has been with the Group since 2006. Geoff will be joining the Board on the 1st November 2008. This will allow for a more divisionalised structure within the Group.

In what have been very difficult circumstances the executive team have been doing an outstanding job. A great deal of the progress achieved since the beginning of July in re-establishing stability to the business is down to their dedication and ability. The credibility of the management team in our industrial markets has never been greater.

Our People 

It has been a time of great uncertainty for all the people who work in the Group. We have seen a number of our colleagues leave the business. I thank them for their involvement in helping to grow the company and wish them well for the future and I personally thank all those people remaining in the business for their continuing dedication and support. 



Consolidated Income Statement 

 

 

 

For the six months ending 30th June 2008

 




 




Six months

Six months

Year to


to 30 Jun 08

to 30 Jun 07

31 Dec 07


(unaudited)

(unaudited)

(audited)

 

£000's

£000's

£000's


 




 



Continuing operations

 



Revenue

92,785

36,826

123,288


 



Changes in inventories of finished goods and WIP

(3,896)

257

8,702

Raw materials and consumables used

(53,374)

(18,291)

(87,980)

Staff costs

(16,971)

(8,563)

(23,667)

Depreciation and amortisation expense

(1,400)

(827)

(2,724)

Other operating income

  - 

  - 

2,769

Other operating expenses

(6,858)

(4,135)

(7,560)

Profit from operations

10,286

5,267

12,828

Impairment of Goodwill

(33,155)

  - 

  - 

Impairment of Intangible assets

(15,260)

  - 

  - 

Impairment of Inventories

(15,325)

  - 

  - 

Impairment of Receivables

(11,549)

  - 

  - 

Restructuring costs

  - 

  - 

(1,270)

(Loss) / Profit from continuing operations

(65,003)

5,267

11,558


 



Finance costs

(549)

(80)

(331)

Interest receivable

288

171

1,210

(Loss) / profit before taxation

(65,264)

5,358

12,437

Income tax expense

(2,807)

(1,500)

(560)


 



Net (loss) / profit from continuing operations

(68,071)

3,858

11,877


 



Discontinued operations

 



(Loss) from discontinued operations

  - 

  - 

(1,484)


 



(Loss) / profit for the period

(68,071)

3,858

10,393


 




 



Earnings per share before exceptional items

 



From continuing operations

 



Basic (pence)

1.95

1.32

3.14

Diluted (pence)

1.88

1.26

2.99


 



From continuing and discontinued operations

 



Basic (pence)

1.95

1.32

3.14

Diluted (pence)

1.88

1.26

2.99



Consolidated Balance Sheet 

 

 

 

As at 30th June 2008

30 Jun 08

30 Jun 07

31 Dec 07


(Unaudited)

(Unaudited)

(Audited)

 

£000's

£000's

£000's

ASSETS




Non Current Assets




Property, plant and equipment

8,106

4,389

6,098

Goodwill

0

5,143

32,244

Intangible assets

13,110

7,417

22,685

Deferred tax asset

785

-

785

 

22,001

16,949

61,812

Current Assets




Inventories

61,300

21,936

60,352

Trade and other receivables

46,197

23,568

47,197

Investments

130

94

120

Current tax assets

-

-

1,459

Cash and cash equivalents

12,009

4,938

27,952

 

119,636

50,536

137,080

Total Assets

141,637

67,485

198,892

LIABILITIES




Current liabilities




Trade and other payables

32,169

13,373

26,406

Tax liabilities

1,293

2,678

  - 

Obligations under finance leases

671

402

684

Bank loans and overdrafts

  - 

203

  - 

Other creditors

3,728

1,532

467

Provisions

  - 

-

  - 

 

37,861

18,188

27,557

Non Current Liabilities




Bank loans

  - 

931

  - 

Other creditors 

5,066

288

5,021

Deferred tax liability

  - 

19

  - 

Obligations under finance leases 

800

384

1,100

Convertible loan notes

  - 

-

  - 

Provisions

  - 

262

  - 

 

5,866

1,884

6,121

Total Liabilities

43,727

20,072

33,678

Equity




Share capital

3,704

2,930

3,703

Share premium account

138,511

29,646

138,493

Share option reserve

992

255

992

Loan stock equity reserve

  - 

-

  - 

Merger reserve

1,534

1,534

1,534

Translation reserve

1,627

67

879

Capital reduction reserve

7,228

7,228

7,228

Profit and loss account

(55,686)

5,754

12,385

Total Equity

97,910

47,413

165,214

Total Equity and Liabilities

141,637

67,485

198,892






Consolidated Cash Flow Statement

 

 

 

For the six months ending 30th June 2007









Six months

Six months

Year to


to 30 Jun 08

to 30 Jun 07

31 Dec 07


(unaudited)

(unaudited)

(audited)

 

£000's

£000's

£000's

Operating Activities


 


Profit / (loss) from continuing and discontinuing operations

10,286

5,267

10,594

Depreciation of property, plant and equipment

535

437

991

Amortisation of intangible fixed assets

865

390

1,752

(Gain) loss on disposal of fixed assets

(15)

  - 

57

Operating cash flows before movements in working capital

11,671

6,094

13,394

(Increase) decrease in debtors

(10,247)

(9,657)

(19,049)

Increase (decrease) in creditors

4,598

6,539

9,779

(Decrease) Increase in provisions

3,216

(701)

(4,416)

(Increase) decrease in inventories

(15,764)

(7,767)

(28,749)

Cash (used) generated from operations

(6,526)

(5,492)

(29,041)

Tax paid

(46)

  - 

(2,943)

Interest paid

(549)

(80)

(331)

Net Cash (used) generated from Operating activities

(7,121)

(5,572)

(32,315)





Investing Activities




Acquisition of subsidiaries, net of overdraft acquired

  - 

  - 

(44,564)

Purchase of property, plant and equipment

(2,513)

(1,090)

(1,851)

Proceeds from sale of property, plant and equipment

  - 

  - 

758

Purchase of investments

(3)

  - 

(23)

Purchase of intangible fixed assets

(6,417)

(2,016)

(2,949)

Interest received

288

171

1,210

Net cash used in investing activities

(8,645)

(2,935)

(47,419)





Financing Activities




Proceeds from issuance of ordinary shares

19

1

109,622

Increase in bank loans and other borrowings

  - 

52

  - 

Repayment of borrowings

  - 

  - 

(14,904)

Repayment of obligations under finance leases

(327)

(183)

(621)

Net cash used in financing

(308)

(130)

94,097





Net Increase/(Decrease) in Cash and Cash Equivalents

(16,074)

(8,637)

14,363

Cash and cash equivalents at beginning of the period

27,952

13,546

13,546

Effect of foreign exchange changes

131

  - 

43

Cash and cash equivalents at end of the period

12,009

4,909

27,952






Consolidated Statement of Changes in Equity

 

 

 

 

 

 

 

 

 

For the six month period ended 30th June 08

Share capital

Share Premium

Share Option Reserve

Loan Stock Reserve

Merger Reserve

Capital Reduction Reserve

Translation reserve

Profit and Loss Account

Total Equity

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's











Balance at 1 January 2008

3,703

138,493

992

  - 

1,534

7,228

879

12,385

165,214

Exercise of share options

1

18

  - 

  - 

  - 

  - 

  - 

  - 

19

Net gains/(losses) not recognised in the income statement

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Issue of new share capital

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Capital Reduction

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Conversion of convertible loan notes

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Foreign exchange differences on retranslation of investments

  - 

  - 

  - 

  - 

  - 

  - 

748

  - 

748

Shares issued for consideration

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Net (loss) for the period

  - 

  - 

  - 

  - 

  - 

  - 

  - 

(68,071)

(68,071)

Balance at 30 June 2008

3,704

138,511

992

  - 

1,534

7,228

1,627

(55,686)

97,910


 

For the six month period ended 30th June 07

Share capital

Share Premium

Share Option Reserve

Loan Stock Reserve

Merger Reserve

Capital Reduction Reserve

Translation reserve

Profit and Loss Account

Total Equity

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's











Balance at 1 January 2007

2,921

29,578

255

6

1,534

7,228

  - 

1,896

43,418

Exercise of share options

1

  - 

  - 

  - 

  - 

  - 

  - 

  - 

1

Net gains/(losses) not recognised in the income statement

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Issue of new share capital

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Capital Reduction

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Conversion of convertible loan notes

8

68

  - 

(6)

  - 

  - 

  - 

  - 

70

Foreign exchange differences on retranslation of investments

  - 

  - 

  - 

  - 

  - 

  - 

67

  - 

67

Shares issued for consideration

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

  - 

Net profit for the period

  - 

  - 

  - 

  - 

  - 

  - 

  - 

3,858

3,858

Balance at 30 June 2007

2,930

29,646

255

  - 

1,534

7,228

67

5,754

47,413



Earnings per Share

 

 

 

 

 

 

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

 

 

Six months

Six months

Year to

 

to 30 Jun 08

to 30 Jun 07

31 Dec 07

Continuing and discontinuing operations

 

 

 

 

 

 

 

Earnings

 

 

 

Earnings for the purposes of basic earnings per share

(68,071)

3,858

10,393

Effect of dilutive potential ordinary shares:

 

 

 

- interest on convertible loan notes

-

-

-

Earnings for the purposes of diluted earnings per share

(68,071)

3,858

10,393

Impairment of Goodwill

33,155

-

-

Impairment of Intangible assets

15,260

-

-

Impairment of Inventories

15,325

-

-

Impairment of Debtors

11,549

-

-

Adjusted earnings for the purposes of earnings per share before exceptional items

7,218

3,858

10,393

 

 

 

 

 

 

 

 

Number of shares

 

 

 

Weighted average number of ordinary shares for the purposes of basic earnings per share

370,336,089

292,220,713

331,253,401

Convertible Loan Notes

-

-

-

Share Options*

13,759,411

14,353,671

16,584,411

Weighted average number of ordinary shares for the purposes of diluted earnings per share

384,095,500

306,574,384

347,837,812

 

 

 

 

Basic earnings per share (pence)

(18.38)

1.32

3.14

Diluted earnings per share (pence)

(18.38)

1.26

2.99

 

 

 

 

Basic earnings per share before exceptional items (pence)

1.95

1.32

3.14

Diluted earnings per share before exceptional items (pence)

1.88

1.26

2.99

 

 

 

 

From continuing operations

 

 

 

 

 

 

 

Earnings

 

 

 

Earnings for the purposes of basic earnings per share

(68,071)

3,858

11,877

Effect of dilutive potential ordinary shares:

 

 

 

- interest on convertible loan notes

-

-

-

Earnings for the purposes of diluted earnings per share

(68,071)

3,858

11,877

 

 

 

 

 

 

 

 

Basic earnings per share (pence)

(18.38)

1.32

3.59

Diluted earnings per share (pence)

(18.38)

1.26

3.41

 

 

 

 

Basic earnings per share before exceptional items (pence)

1.95

1.32

3.14

Diluted earnings per share before exceptional items (pence)

1.88

1.26

2.99

 

 

 

 

*Share options outstanding represent the no shares with an intrinsic value at 30th June 2008, at a share price of 31.75p. At 1 July 2008 the share price was 5.53 and the number of options with an intrinsic value was 1,000,000 shares.



Business and Geographical Segments

 

 

 

 

 

 

 

 

 

For the six months ending 30.06.08

Powered Access Platforms

Zero Emmission Vehicles

Other

Consolidated

 

£000's

£000's

£000's

£000's

Revenue

 

 

 

 

External Sales

72,900

15,600

4,285

92,785

Inter-segment sales

 

 

 

 

Total revenue

72,900

15,600

4,285

92,785

Result

 

 

 

 

Segment Result before restructuring and impairments

8,297

1,896

93

10,286

Impairments

(75,289)

-

-

(75,289)

Profit from operations

(66,992)

1,896

93

(65,003)

Finance costs

(251)

(8)

(2)

(261)

Profit before tax

(67,243)

1,888

91

(65,264)

 

 

 

 

 

Income tax expense

2,253

529

25

2,807

Profit after tax

(69,496)

1,359

66

(68,071)

Other information

 

 

 

 

Capital additions

2,437

6,471

22

8,930

Depreciation and amortisation

810

455

135

1,400

Balance Sheet

 

 

 

 

Assets:

 

 

 

 

Segment assets

108,055

29,113

4,469

141,637

Consolidated total assets

108,055

29,113

4,469

141,637

Liabilities:

 

 

 

 

Segment Liabilities

30,654

4,883

8,190

43,727

Consolidated total liabilities

30,654

4,883

8,190

43,727


 


Business and Geographical Segments

 

 

 

 

For the six months ending 30.06.07

Powered Access Platforms

Zero Emmission Vehicles

Other

Consolidated

 

£000's

£000's

£000's

£000's

Revenue

 

 

 

 

External Sales

19,124

13,085

4,617

36,826

Inter-segment sales

 

 

 

 

Total revenue

19,124

13,085

4,617

36,826

Result

 

 

 

 

Segment Result before restructuring

3,464

2,069

185

5,718

Unallocated corporate expenses

-

-

-

(451)

Profit from operations

3,464

2,069

185

5,267

Finance costs

56

30

5

91

Profit before tax

3,520

2,099

190

5,358

 

 

 

 

 

Income tax expense

986

588

53

1,500

Profit after tax

2,534

1,511

137

3,858

Other information

 

 

 

 

Capital additions

1,060

2,012

26

3,098

Depreciation and amortisation

303

387

156

846

Balance Sheet

 

 

 

 

Assets:

 

 

 

 

Segment assets

33,306

20,092

14,087

67,485

Consolidated total assets

33,306

20,092

14,087

67,485

Liabilities:

 

 

 

 

Segment Liabilities

10,491

5,714

3,867

20,072

Consolidated total liabilities

10,491

5,714

3,867

20,072

 

 


Business and Geographical Segments

 

 

 

 

For the twelve months ending 31.12.07

 

 

 

 

 

Powered Access Platforms

Zero Emmission Vehicles

Other

Consolidated

 

£000's

£000's

£000's

£000's

Revenue

 

 

 

 

External Sales

90,064

26,109

7,115

123,288

Inter-segment sales

 

 

 

 

Total revenue

90,064

26,109

7,115

123,288

Result

 

 

 

 

Segment Result before restructuring

9,486

2,848

177

12,511

Restructuring costs

1,270

0

0

1,270

Segment result

8,216

2,848

177

11,241

Unallocated corporate expenses

0

0

0

317

Profit from operations

8,216

2,848

177

11,558

Finance costs

625

217

37

879

Profit before tax

8,841

3,065

214

12,437

 

 

 

 

 

Income tax expense

502

58

0

560

Profit after tax

8,339

3,007

214

11,877

Other information

 

 

 

 

Capital additions

2,825

3,025

122

5,972

Depreciation and amortisation

1,484

933

307

2,724

Balance Sheet

 

 

 

 

Assets:

 

 

 

 

Segment assets

164,412

25,762

8,718

198,892

Consolidated total assets

164,412

25,762

8,718

198,892

Liabilities:

 

 

 

 

Segment Liabilities

26,225

4,150

3,303

33,678

Consolidated total liabilities

26,225

4,150

3,303

33,678


 



Impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The impairment losses recognised in the Consolidated Income Statement result from impairment reviews triggered by the significant changes in the market outlook for the Powered Access division, experienced during June 2008.

 

 

 

 

 

 

 

 

 

 

 

 

 

In particular, the company addressed the valuation of the Intangible Assets and Goodwill arising from the acquisition of Snorkel International Inc and it subsidiaries August 2007.  


In accordance with IAS 36 the Group values Goodwill at the lower of its carrying value or its recoverable value, where the recoverable value is the higher of the value if sold and its value in use. In addition IAS38 requires intangible assets with finite useful lives to follow the same impairment testing as Goodwill including the use of value in use calculations.  


The impact of market changes in June and the uncertainty within this market going forward, described elsewhere in this statement, have meant that the value in use calculations, prepared to support previous valuations, are significantly altered. 


For the impairment review, the Group's value in use calculations were prepared using revised pre-tax cash flow projections for the next five year period based on current trading levels, with conservative growth assumptions, given current uncertainty. The Group considers Snorkel and its subsidiaries as a cash generating unit for the purposes of IAS 36. The value in use for this cash generating unit has been compared with the assets for that unit and the impairments calculated accordingly.

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on the value in use calculations, the Group has determined that the value of the Goodwill has been fully impaired and as such an impairment charge of £33.2m (2007: nil) has been made to fully write down the carrying value of the asset.

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on the value in use calculations the Group has determined that the value of the intangible assets has been impaired and as such an impairment charge of £15.3m (2007: nil) has been made.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for doubtful receivables

 

 

 

 

 

 

 

 

 

 

A provision has been made against accounts that in the estimation of management may be impaired. Within each of the business segments an assessment has been made as to the recoverability of accounts receivable based on a range of factors including the age of the receivable, creditworthiness of the customer, any credits required to release payments, and changes in that customer's access to credit to fund their purchases. When determining the recoverability of an account the Group has made an estimation as to the financial condition of the customer and their ability to subsequently make payment. 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Group holds a provision for impairment of receivables at 30 June 2008 amounting to £11.5 million (2007: £nil)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories

 

 

 

 

 

 

 

 

 

 

 

In accordance with IAS2 the group regularly reviews its inventory to ensure it is carried at the lower of cost or net realisable value. At 30 June 2008 the management believes the carrying value of inventories to be impaired by £15.3m due to slow moving and obsolete items arising from changes in the product mix demanded by customers, reductions in overall volumes, supplier failures and strategic resourcing decisions. Obsolescence provisions have been calculated based on current market values and future sales of inventories.




This information is provided by RNS
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