FINANCIAL PERFORMANCE
- Underlying sales growth of 2.9% year on year
- Adjusted operating profit of £41.0m down 9.9% year on year
- Adjusted operating profit margin of 8.2% (2014/15: 9.5%)
- Adjusted free cash flow at 8.4% of sales driven by strong working capital management
- Adjusted earnings per share of 6.4p down 11.1% on the prior period
- Full year adjusted operating profit now expected to be in the range £73m to £77m
STRATEGY REFOCUS AND OPERATIONAL REVIEW
- We will refocus on the fundamentals of distribution: product, pricing and proposition
- The Board has taken the decision to sell Akron Brass
- The Group will cease direct operations in Brazil due to sub-optimal returns and high costs of operation
- The Board’s operational review announced in July is progressing well and is targeted on the following areas: trading, operations, support and working capital
- Our ongoing global drive for efficiency is set to deliver £4m in annualised benefit for the current year
DIVIDEND
- Interim dividend of 2.6p per share, a reduction of 40.9% on the prior year interim
- The Group will target a sustainable and progressive dividend with cover of 1.5x to 2.0x
Val Gooding, Chairman, commented:
“The review announced in July is progressing rapidly. One of the key early decisions is to dispose of Akron Brass which, although an excellent business, does not fit strategically within the portfolio given the Group’s refocus on its core distribution activities. The Board has also given careful consideration to the current shape and capacity of the Group’s balance sheet and we have concluded that it is appropriate to rebase our dividend. The Board recognises the significance of the dividend to our shareholders, but also the importance of it being sustainable and progressive and we will therefore target dividend cover in the range 1.5x to 2.0x going forward.
The review has highlighted the extent of change in the business that is necessary to allow it to compete effectively in an increasingly digital market. Further work is required to determine the scale, timing, benefits and costs involved, and the Board expects to be in a position to provide this information at the time of its Q3 trading update in December 2015.”
