REG-Dialight PLC Interim Results – Part 2
Date/Range: 29-JUL-2008
Short Abstract: REG-Dialight PLC Interim Results – Part 2
£’000
£’000 £’000 £’000 £’000
£’000
Balance at 1 January 2008 591 546 (1,697) 60 31,349 30,849
Profit for the period – – – – 1,306 1,306
Net expense recognised directly in equity (See Statement
of Recognised Income and Expense)
– – 317 – – 317
Dividends to shareholders
Share based payments
B Shares redeemed – – – – (1,187) (1,187)
Own shares purchased – – – – 51 51
– – – 2,021 (2,021) –
(191) (191)
Balance at 30 June 2008 591 546 (1,380) 2,081 29,307 31,145
Balance at 1 January 2007 591 546 (1,890) 48 30,395 29,690
Profit for the period – – – – 788 788
Net expense recognised directly in equity (See Statement
of Recognised Income and Expense)
Dividends to shareholders – – (402) – (58) (460)
Share -based payments
B Shares redeemed – – – – (1,093) (1,093)
– – – – 104 104
– – – 10 (10) –
Balance at 30 June 2007 591 546 (2,292) 58 30,126 29,029
Balance at 1 January 2007 591 546 (1,890) 48 30,395 29,690
Profit for the period – – – – 2,729 2,729
Net expense recognised directly in equity (See Statement
of Recognised Income and Expense)
Dividends to shareholders – – 193 – (272) (79)
Share -based payments
B Shares redeemed – – – – (1,687) (1,687)
– – – – 196 196
– – – 12 (12) –
Balance at 31 December 2007 591 546 (1,697) 60 31,349 30,849
8. Principal Exchange Rates
Six months ended 30 June 2008 Six months ended 30 June Year ended 31 December
2007 2007
Average for the period
Euro 1.29 1.48 1.47
USD 1.98 1.97 2.00
30 June 30 June 31 December 2007
2008 2007
Spot rate
Euro 1.26 1.49 1.36
USD 1.99 2.00 1.96
9. Related Party Transactions
There have been no changes in the nature of related party transactions to those
described in the 2007 Annual Report that could have a material effect on the
financial position or performance of the group in the period to 30 June 2008.
Principal Risks and Uncertainties
As required by DTR 4.2.7R of the Disclosure and Transparency Rules we have
described below the principal risks and uncertainties which may impact on the
performance of the Group during the next six months.
Macro-economic conditions
A major slowdown in economic conditions globally and in certain territories such
as North America could have a material effect on sales and operating profit in
particular for the LED Indication business. Management of the LED Indication
business monitor the general electronics demand index as well as industry
forecasts so as to remain aware of market trends. In addition the monthly Point
of Sales data which is provided by US customers is reviewed on a monthly basis
as this is also considered to provide valuable information on market demand.
Increasing inflationary pressures on areas such as raw material and sub contract
costs may have a adverse impact on operating margins.
The adverse economic conditions may cause both private and public organisations
to reduce their capital spending budgets which may impact on sales of almost all
of our product lines.
Foreign exchange
The Group is exposed to translation exchange rate risk as a significant
proportion of the Group’s results and assets and liabilities are reported in US
Dollars and Euros and are therefore subject to translation to Sterling for
incorporation into the Group’s results. In addition, transactions are carried
out by Group companies in currencies other than Sterling leading to
transactional foreign exchange risk. Where possible the Group nets such
exposures and maintains a hedging programme utilising foreign exchange forward
contracts and currency overdrafts to cover specific contracts and such
proportion of other anticipated exposures as can be estimated with reasonably
certainty.
Disposal of businesses
During the last five years the Group has sold businesses in three separate
transactions to major US corporations. In each transaction the Company was
required to provide certain warranties and indemnities to the purchaser. The
terms and nature of the warranties and indemnities were not unusual for these
types of transactions. A number of the indemnities principally in relation to
taxation are still in place and will expire over time with the last expiring in
December 2011. The Company has not received any claims and has not been notified
of any potential claims by any of the purchasers in relation to these warranties
and indemnities. Management considers that the risk of a material claim by the
purchasers to be remote and accordingly no provision is required to be made.
Competitive environment
We operate in competitive markets and there exists a threat that existing
competitors or potential new entrants will be successful in taking market share.
The threat may, for example, come from an extremely aggressive pricing policy
for larger traffic contract bids in US and Europe.
Our focus on identifying, developing and maintaining sales routes to market,
servicing strong customer relationships, competitive and leading edge product
portfolios and cost efficient manufacturing plants supports the Group as a major
player in our chosen markets and helps to reduce the risk of losing market share
to competition.
Group Strategy for Revenue Growth
The strategy of the Group is to grow sales by compound double-digit percentage.
The achievement of this goal is dependent in growing sales in the chosen markets
within the Signals/Illumination business such as industrial white lighting. The
adoption by the market of LEDs for new applications is principally dependent on
the acceptance of current value propositions offered by LED lighting.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
* The condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU;
* The interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining six
months of the year; and
(b) DTR 4.2 8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board
Roy Burton, Group Chief Executive
Cathy Buckley Group Finance Director
29 July 2008
Independent Review Report to Dialight Plc
Introduction
We have been engaged by the Company to review the condensed set of financial set
of financial statements in the half-yearly financial report for the six months
ended 30 June 2008 which comprises the Consolidated Income Statement,
Consolidated Balance Sheet, Consolidated Cash Flow Statement, the Consolidated
Statement of Recognised Income and Expense and the related explanatory notes. We
have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Disclosure
and Transparency Rules (“the DTR”) of the UK’s Financial Services Authority
(“the UK FSA”). Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors’ Responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the Directors. The Directors are responsible for preparing the half-yearly
financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the EU. The condensed set of
financial statements in this half-yearly financial report has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of Entity issued by the Auditing Practices
Board for use in the UK. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2008 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK
FSA.
KPMG Audit Plc
Chartered Accountants
Birmingham B3 2DL
29 July 2008
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