Hampson Industries PLC : - Half Yearly Report

November 16, 2011 at 07:15 am

MarketScreener.com By

Hampson Industries PLC

Half Year Report 2011

Chairman's Statement

Revenues and trading profit in the continuing businesses in the first half of the year, at £76.7 million and £4.3 million respectively, were lower than the prior year equivalent period, but similar on a constant currency basis. New orders received over the six months were ahead of revenues by 20%.

In the core tooling segment, Coast performed as expected. Much management effort has been expended on improving the operating performance of the Michigan operations and the primary issue at Odyssey is now one of available order cover. However, implementation of efficiency and cost reduction measures are bringing the activity into balance and management believes that the unit should be operating at a breakeven run-rate by fiscal year end although this remains dependent on order intake. The Board has reviewed the continuing situation at Odyssey and believes it prudent to impair the goodwill associated with the acquisition by an additional £28.3 million.

Elsewhere, performance was also mixed, with Composites Horizons Inc. performing well while Texstars Inc. was somewhat weaker against a reduction in US defence orders. The Board is reviewing its strategic options in respect of the Indian operation and BHW in the UK.

The completion of the Shims businesses disposals, announced on 4 October 2011, provided a welcome gross cash inflow of US$84 million. The disposal and operating cash flow improvements resulted in a significant reduction in group indebtedness. With much of the Group's debt facilities expiring in April 2013, a refinancing process is underway.

No industry is immune from either macro-economic or industry-specific uncertainties, but Hampson is positioned to benefit from both the anticipated strong recovery in the civil aerospace cycle and the trend to greater use of composite materials in aircraft. With a primary focus on composites and tooling the Group intends to take steps to position itself more closely to the aircraft manufacturers and Tier 1 suppliers who are its key customers.

In the near term the Group has overall order cover or pipeline opportunities adequate to deliver, subject as always to customer scheduling, a full year performance consistent with the first half.

John Poulter

Chairman

16 November 2011

In addition to the "statutory" measures of profit, reference is made throughout this announcement to the impact on the continuing Group's profit before tax and earnings per share of excluding the following items; restructuring and rationalisation charges, impairment charges, gains and losses on disposal or closure of businesses, amortisation of intangible assets arising on acquisition, changes in the net fair value of financial instruments and the results of discontinued operations. The Directors believe that exclusion of these items allows trends in the performance of the Group's continuing business to be more easily identified and understood. Reference is made throughout to the terms "trading profit", "adjusted profit before tax" and "adjusted earnings per share", which are defined, respectively, as operating profit, profit before tax and earnings per share adjusted to exclude all of the fore-going items.

Business Review

Group Performance

Revenue from continuing operations for the six month period to 30 September 2011 was £76.7 million, a decrease of £6.6 million (8%) compared with the first half of the previous year. This decrease was driven by lower revenues from our tooling division, in particular at our Odyssey facility, where revenues were nearly 20% lower. On a like-for-like, constant currency basis, total Group revenue was £1.8 million (2%) lower than the previous year.

Over the six month period the Group's total order book from continuing operations increased from £107 million to £119 million, an increase of 11%, with £53 million falling due for delivery within the next six months.

For continuing operations group trading profit at £4.3 million was a 4% increase compared with the equivalent period in 2010, on constant currency basis.

Tooling

The Tooling division comprises Coast Composites Inc. "Coast", Global Tooling Systems Inc. "GTS" and Odyssey Industries Inc "Odyssey".

Revenue in the Tooling division decreased by £5.5 million (8%) to £59.5 million compared to the prior year. However, on a constant currency basis this was a decline of 2%.

Trading profit improved over the period by £0.9 million (15%) to £7.1 million as a result of revenue and margin growth at Coast more than offsetting declines in profitability at GTS and Odyssey. On a constant currency basis this was a 22% improvement.

Coast revenues grew by 10% compared to the prior year equivalent period. Trading profit and profit margins also increased due to improved operational leverage. Excluding the impact of the large tooling order, Coast had an order book of £11 million at the end of the reporting period, compared to £9 million at the end of March, 2011 and £23 million at the end of September, 2010.

GTS experienced a reduction in revenues and decline in trading profit compared to the prior year. Improvements in labour utilisation/overtime levels, material purchases and subcontracting levels as well as lean initiatives improved gross margins in the latter part of the reporting period. At the end of the reporting period, GTS had an order book of £38 million compared to £22 million at the end of March, 2011 and £11 million at the end of September, 2010.

Results at Odyssey were down approximately 20% in the period and order book levels declined. As a result of this and future projections for this business, a £28.3 million impairment of goodwill was taken in the period. During the half year a number of operational changes were introduced including headcount reductions. It is targeted that Odyssey will start to break even by year end. At the end of the reporting period, Odyssey had an external order book of £4 million compared to £10 million at the end of March, 2011 and £13 million at the end of September, 2010. However, this excludes activity being conducted on behalf of Coast and GTS in substitution for sub-contracting.

Aerostructures & Composites

The Aerostructures & Composites division comprises BHW (Components) Limited "BHW", the Group's Indian operations "India", Composites Horizons Inc."CHI" and Texstars Inc. "Texstars". The division also includes the Shims businesses, disclosed as discontinued operations due to the disposal of these businesses on 4 October 2011.

Revenue in the division decreased by £1.1 million (6%) to £17.3 million compared to the prior year. However, on a constant currency basis, revenue from continuing operations in the Aerostructures & Composites division decreased by 2% compared to the prior year.

Segment profitability improved in the period, with a trading profit of £0.1 million compared to a loss of £0.6 million in the prior year. This was primarily due to better performance at CHI offsetting weaker results at Texstars and BHW.

The first six months of the year at CHI have been very successful with revenues up 80% compared to the equivalent prior year period. A number of new wins have been achieved in the period, resulting in the order book for the business of £30 million at 30 September 2011 compared to £27 million at the end of March, 2011 and £29 million at the end of September, 2010

Profit margins have improved compared to the prior year through a combination of improved mix and continued operational improvements. With the ongoing growth of this business, the Board has approved a number of capital expenditure projects.

Texstars' performance was somewhat weaker as positive activity by the company was negated by postponement and reduction in US defence orders. At the end of the reporting period, Texstars had an order book of £15 million compared to £11 million at the end of March, 2011 and £14 million at the end of September, 2010.

During the period BHW experienced a reduction in revenues of over 20% and made a loss. The Board is undertaking a strategic review of this business.

The Indian operation has continued to operate at a small monthly loss and the future of this business is under review.

Finance Review

Operating Results

	Half year to 30 September 2011	Half year to 30 September 2010
	£m	£m
Continuing operations:
Revenue	76.7	83.3
Trading profit	4.3	4.5
Trading profit margin	5.6%	5.4%

For continuing operations group trading profit at £4.3 million was a 4% increase compared with the equivalent period in 2010, on constant currency basis.

Exchange rates

	Half year to 30 September 2011	Half year to 30 September 2010
Sterling to US Dollar (GBP 1 = US$):
Average for period	1.62	1.52
Period end	1.56	1.58

Revenue in the Tooling division decreased by £5.5 million (8%) to £59.5 million compared to the prior year. However, on a constant currency basis this was a decline of 2%. Revenue in the Aerostructures & Composites division decreased by £1.1 million (6%) to £17.3 million compared to the prior year. However, on a constant currency basis, revenue from continuing operations in the division decreased by 2% compared to the prior year.

The Tooling division's trading profit improved over the period by £0.9 million (15%) to £7.1 million. The Aerostructures & Composites division profitability improved in the period, with a trading profit of £0.1 million compared to a loss of £0.6 million in the prior year.

In light of the lower revenue, profitability and cash flow generation levels at Odyssey, an £28.3 million impairment of goodwill in relation to the tooling division has been taken in the period. Exceptional charges of £0.5 million include costs of termination of senior executives. On a statutory basis, operating profit decreased by £25.7 million over the equivalent period.

Net financing costs increased by £3.4 million over the six month period to 30 September 2011. This was primarily driven by £2.9 million of fees in relation to renegotiation of borrowing facilities. Interest payable on the Group's debt also increased in the period due to higher margins charged following the renegotiation.

Loss before tax for the six month period to 30 September 2011 increased by £29.1 million to £31.0 million on a statutory basis. The Group's overall effective rate of tax on continuing results for the period was a 39% credit, which benefitted from the recognition of deferred tax credits as a result of the goodwill impairment charge.

Earnings per share

Statutory earnings per share reduced from (0.28p) to (6.80p), although adjusted earnings per share increased from 0.50p to 1.53p.

Corporate Costs

Reported corporate costs increased in the period by £1.9 million to £2.9 million, which includes the impact of non-recurring management charges to discontinued businesses. Underlying corporate costs are slightly reduced as a reduction in salaries and benefits more than offset non-recurring benefits from an £0.8 million accrual release and £0.8 million foreign exchange gains in the prior year.

Operating Cash Flows, Liquidity and Funding

At 30 September 2011 net debt of the Group was £88.7 million, a reduction of £4.3 million from prior year end. The completion of the disposal of the Shims businesses on 4 October 2011 significantly lowered this balance to a proforma £49 million. The Group currently has undrawn committed borrowing facilities (excluding lease facilities) of £23.5 million.

The above net debt reduction of £4.3 million was primarily from improved operating cash flow generation as a result of the better working capital management.

Balance sheet gearing (net indebtedness expressed as a percentage of shareholders' equity) remained stable compared to 31 March 2011 at approximately 39%, with the reduction in shareholders' equity following the goodwill impairment largely matching the percentage reduction in net indebtedness. On a lender measured basis, the leverage ratio at 30 September 2011 was 3.92 times compared to a covenanted ratio of 4.25 times.

Due to the Group's bank borrowing facilities maturing in April 2013, the Group expects to refinance its debts in the near term.

Dividend

As reducing the Group's indebtedness continues to be a priority, the Board has not declared an interim dividend.

Principal risks and uncertainties

In common with all trading businesses, the Group is exposed to a variety of risks in the conduct of its normal business operations. Set out on pages 18 to 22 of the Group's Annual Report for the year ended 31 March 2011 is a summary of some of the most important risks and uncertainties which, in the opinion of the Directors, could impact its performance. These are equally applicable to the current financial year of which the period covered by these condensed financial statements forms part. Although it is not possible to completely record or quantify every risk that the Group faces, on a short term, forward-looking basis over the remainder of this financial year, a key area of potential risk and uncertainty relates to the size and timing of receipt of further tooling orders, which have a significant impact on the Group's potential future revenue generation and profitability. Significant further delays by customers in the award of purchase orders could also increase the risk of an impairment of goodwill being required due to the carrying value of the assets of a cash generating unit being higher than their recoverable amount. Other principal risks and uncertainties include those related to the global economic environment, funding and liquidity, cyclical markets, market competition, customer concentration, programme dependencies & relationships, commercial dispute resolution and litigation and interest rate and foreign exchange risk. The Group seeks to put in place strategies and actions to mitigate the potential effect of these risks wherever practical.

Directors' Responsibility Statement

The Directors confirm that to the best of their knowledge:

· The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as endorsed and 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.

The Directors of Hampson Industries PLC as at 30 June 2011 are listed in the Group's Annual Report for the year ended 31 March 2011 on pages 28 and 29. During the period Chris Geoghegan resigned as Director on 28 October 2011, and John Poulter was appointed as Director and Chairman on 28 October 2011. There have been no other changes to Directors during the period.

By order of the Board:

John Poulter Norman Jordan Ram Swamy

Chairman Chief Executive Finance Director

16 November 2011 16 November 2011 16 November 2011

Condensed Consolidated Income Statement For the half year ended

		Unaudited
		30 September 2011	30 September 2011	30 September 2011
		Before adjustments*	Adjustments*	Total
	Notes	£'000	£'000	£'000
Continuing operations
Revenue	3	76,736	-	76,736

Operating profit/(loss)	4	4,323	(29,121)	(24,798)
Analysed as:
Trading profit		4,323	-	4,323
Restructuring and rationalisation charges	5	-	(540)	(540)
Impairment charges	5	-	(28,273)	(28,273)
Gains and losses on disposal or closure of businesses	5	-	-	-
Changes in net fair value of derivative financial instruments - non interest instruments	5	-	17	17
Amortisation of intangible assets on acquisition	5	-	(325)	(325)

Net financing costs		(3,887)	(2,334)	(6,221)
Analysed as:
Financial income		599	-	599
Financial expense		(4,486)	-	(4,486)
Restructuring and rationalisation charges	5	-	(2,852)	(2,852)
Changes in net fair value of derivative financial instruments - interest instruments	5	-	518	518

Profit/(loss) before taxation		436	(31,455)	(31,019)
Taxation	7			12,023
Loss after taxation				(18,996)
Discontinued operations
Post tax results from discontinued operations	8			2,097
Loss for the financial year				(16,899)
Attributable to:
- Equity shareholders of the parent company				(16,899)
				(16,899)

Earnings per 25p ordinary share
Continuing Operations:
Basic	10			(6.80p)
Diluted	10			(6.80p)
Discontinued Operations:
Basic	10			0.75p
Diluted	10			0.75p
Total Operations:
Basic	10			(6.05p)
Diluted	10			(6.05p)

* Adjustments relate to restructuring and rationalisation charges, impairment charges, gains and losses arising from the disposal or closure of businesses that do not meet the criteria to be classified as discontinued operations under IFRS 5, changes in net fair value of derivative financial instruments required under IAS 39 and amortisation of intangible assets on acquisition required under IFRS 3.

Condensed Consolidated Income Statement For the half year ended

		Unaudited and re-presented (note 1)
		30 September 2010	30 September 2010	30 September 2010
		Before adjustments*	Adjustments*	Total
	Notes	£'000	£'000	£'000
Continuing operations
Revenue	3	83,332	-	83,332

Operating profit/(loss)	4	4,520	(3,623)	897
Analysed as:
Trading profit		4,520	-	4,520
Restructuring and rationalisation charges	5	-	(707)	(707)
Impairment charges	5	-	(3,288)	(3,288)
Gains and losses on disposal or closure of businesses	5	-	-	-
Changes in net fair value of derivative financial instruments - non interest instruments	5	-	719	719
Amortisation of intangible assets on acquisition	5	-	(347)	(347)

Net financing costs		(3,480)	658	(2,822)
Analysed as:
Financial income		444	-	444
Financial expense		(3,924)	-	(3,924)
Restructuring and rationalisation charges	5	-	-	-
Changes in net fair value of derivative financial instruments - interest instruments	5	-	658	658

Profit/(loss) before taxation		1,040	(2,965)	(1,925)
Taxation	7			1,139
Loss after taxation				(786)
Discontinued operations
Post tax results from discontinued operations	8			(8,841)
Loss for the financial year				(9,627)
Attributable to:
- Equity shareholders of the parent company				(9,627)
				(9,627)

Earnings per 25p ordinary share
Continuing Operations:
Basic	10			(0.28p)
Diluted	10			(0.28p)
Discontinued Operations:
Basic	10			(3.18p)
Diluted	10			(3.18p)
Total Operations:
Basic	10			(3.46p)
Diluted	10			(3.46p)

Condensed Consolidated Income Statement For the year ended

		Re-presented (note 1)
		31 March 2011	31 March 2011	31 March 2011
		Before adjustments*	Adjustments*	Total
	Notes	£'000	£'000	£'000
Continuing operations
Revenue	3	170,069	-	170,069

Operating profit/(loss)	4	11,903	(40,621)	(28,718)
Analysed as:
Trading profit		11,903	-	11,903
Restructuring and rationalisation charges	5	-	(1,216)	(1,216)
Impairment charges	5	-	(38,726)	(38,726)
Gains and losses on disposal or closure of businesses	5	-	-	-
Changes in net fair value of derivative financial instruments - non interest instruments	5	-	(2)	(2)
Amortisation of intangible assets on acquisition	5	-	(677)	(677)

Net financing costs		(6,852)	(1,049)	(7,901)
Analysed as:
Financial income		1,086	-	1,086
Financial expense		(7,938)	-	(7,938)
Restructuring and rationalisation charges	5	-	(1,714)	(1,714)
Changes in net fair value of derivative financial instruments - interest instruments	5	-	665	665

Profit/(loss) before taxation		5,051	(41,670)	(36,619)
Taxation	7			19,854
Loss after taxation				(16,765)
Discontinued operations
Post tax results from discontinued operations	8			(10,721)
Loss for the financial year

Condensed Consolidated Statement of Comprehensive Income

For the periods ending

	Unaudited
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Loss for the financial period	(16,899)	(9,627)	(27,486)

Other comprehensive income:
- Foreign exchange translation differences	8,752	(16,558)	(21,407)
- Actuarial (losses)/gains on retirement benefit scheme - gross	(948)	(545)	184
- Deferred taxation related thereto	237	147	(48)
Total comprehensive expense for the period	(8,858)	(26,583)	(48,757)

Attributable to:
- Equity shareholders of the parent company	(8,858)	(26,583)	(48,757)
	(8,858)	(26,583)	(48,757)

Condensed Consolidated Balance Sheet

As at

	Unaudited
	30 September 2011	30 September 2010	31 March 2011
	£'000	£'000	£'000
Assets
Non-current assets
Goodwill	194,068	269,545	231,530
Intangible assets	18,878	21,203	21,626
Property, plant and equipment	33,973	37,710	36,659
Trade and other receivables - due after more than one year	514	-	748
Deferred tax assets	24,749	3,086	15,947
	272,182	331,544	306,510
Current assets
Inventories	15,774	23,531	22,075
Trade and other receivables - due within one year	38,170	41,916	47,971
Financial assets - derivatives	-	686	-
Current tax assets	-	-	-
Cash and cash equivalents	10,756	13,339	11,948
	64,700	79,472	81,994
Assets classified as held for sale	31,569	-	-
	96,269	79,472	81,994
Total assets	368,451	411,016	388,504
Liabilities
Current liabilities
Trade and other payables	(42,571)	(41,693)	(44,484)
Financial liabilities - derivatives	(842)	(2,861)	(1,377)
Current tax liabilities	(3,662)	(4,253)	(3,730)
Provisions	(1,023)	(2,933)	(4,113)
	(48,098)	(51,740)	(53,704)
Liabilities classified as held for sale	(3,704)	-	-
	(51,802)	(51,740)	(53,704)
Non-current liabilities
Financial liabilities - borrowings	(89,522)	(94,255)	(95,706)
Deferred tax liabilities	-	(6,750)	(3,483)
Provisions	(568)	(1,634)	(1,175)
Retirement benefit liabilities	(1,975)	(1,939)	(1,147)
	(92,065)	(104,578)	(101,511)
Total liabilities	(143,867)	(156,318)	(155,215)
Net assets	224,584	254,698	233,289

Equity
Called up share capital	69,824	69,432	69,824
Reserves	154,760	185,266	163,465
Total equity	224,584	254,698	233,289

Condensed Consolidated Statement of Changes in Equity

		Reserves
	Share capital	Share premium	Share based payment reserve	Exchange reserve	Retained earnings	Total equity
Unaudited	£'000	£'000	£'000	£'000	£'000	£'000
At 1 April 2011	69,824	148,993	1,777	37,518	(24,823)	233,289
Total comprehensive income/(expense) for the period	-	-	-	8,752	(17,610)	(8,858)
Issue of ordinary share capital	-	-	-	-	-	-
Dividends	-	-	-	-	-	-
Share based payments charge	-	-	288	-	(135)	153
Issue of share options	-	-	-	-	-	-
At 30 September 2011	69,824	148,993	2,065	46,270	(42,568)	224,584

		Reserves
	Share capital	Share premium	Share based payment reserve	Exchange reserve	Retained earnings	Total equity
Unaudited	£'000	£'000	£'000	£'000	£'000	£'000
At 1 April 2010	69,432	148,993	914	58,925	5,027	283,291
Total comprehensive income/(expense) for the period	-	-	-	(16,558)	(10,025)	(26,583)
Issue of ordinary share capital	-	-	-	-	-	-
Dividends	-	-	-	-	(2,500)	(2,500)
Share based payments charge	-	-	490	-	-	490
Issue of share options	-	-	-	-	-	-
At 30 September 2010	69,432	148,993	1,404	42,367	(7,498)	254,698

		Reserves
	Share capital	Share premium	Share based payment reserve	Exchange reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 April 2010	69,432	148,993	914	58,925	5,027	283,291
Total comprehensive income/(expense) for the period	-	-	-	(21,407)	(27,350)	(48,757)
Issue of ordinary share capital	392	-	-	-	-	392
Dividends	-	-	-	-	(2,500)	(2,500)
Share based payments charge	-	-	1,082	-	-	1,082
Issue of share options	-	-	(219)	-	-	(219)
At 31 March 2011	69,824	148,993	1,777	37,518	(24,823)	233,289

Condensed Consolidated Cash Flow Statement

For the periods ending

	Unaudited
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Cash flows from operating activities
Cash generated from/(used in) operations	13,457	(314)	5,342
Interest received	415	291	799
Interest paid	(4,093)	(3,451)	(7,106)
Termination of interest financial instruments	-	(3,796)	(4,023)
Tax (paid)/received	(61)	2,864	3,297
Net cash from/(used in) operating activities	9,718	(4,406)	(1,691)
Cash flows from investing activities
Acquisitions - net of cash acquired	-	-	-
Disposals - net of cash disposed	-	1,607	1,607
Purchase of property, plant and equipment	(2,686)	(2,877)	(3,957)
Purchase of intangible assets	(167)	(748)	(1,669)
Proceeds on sale of property, plant and equipment	1,346	12	16
Development costs	(431)	(320)	(968)
Net cash used in investing activities	(1,938)	(2,326)	(4,971)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital	-	-	-
New borrowings	2,000	16,256	18,312
Costs of refinancing	(2,852)	-	(1,714)
Dividends paid	-	-	(2,187)
Finance lease principal payments	(281)	(1,279)	(1,592)
Finance lease interest payments	(58)	(135)	(160)
Repayments of loans	(8,000)	(10,705)	(9,760)
Net cash flow (used in)/from financing activities	(9,191)	4,137	2,899
Currency variations on cash and cash equivalents	330	(944)	(1,167)
Decrease in cash and cash equivalents	(1,081)	(3,539)	(4,930)
Cash and cash equivalents at beginning of the period	11,948	16,878	16,878
Cash and cash equivalents at end of the period	10,867	13,339	11,948

Reconciliation of movement in cash and cash equivalents to movement in net debt

For the periods ending

	Unaudited
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Movement in cash and cash equivalents	(1,081)	(3,539)	(4,930)
Net repayments/(proceeds) of borrowings	6,000	(5,551)	(8,552)
Currency variations on borrowings	(757)	1,317	1,650
Finance lease payments	281	1,279	1,592
New finance leases	-	(63)	(63)
Other movements in net debt	(163)	(163)	(326)
Movement in period	4,280	(6,720)	(10,629)
Net debt at beginning of period	(92,934)	(82,305)	(82,305)
Net debt at end of period	(88,654)	(89,025)	(92,934)

Other movements in net debt represent movements in the unamortised issuance costs in relation to borrowings within the Group.

Condensed Cash Flow from Operating Activities

For the periods ending

		Re-presented (note 1)
	Unaudited
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Continuing operations
Loss before tax	(31,019)	(1,925)	(36,619)
Add back: financial expense	6,221	2,822	7,901
Operating (loss)/profit	(24,798)	897	(28,718)
Depreciation of property, plant and equipment	2,066	2,396	4,356
Amortisation of intangible assets	833	869	1,765
Impairment charges	28,273	3,288	38,726
Results of discontinued operations	2,097	(7,550)	(8,609)
(Gain)/loss on sale of property, plant and equipment	(134)	-	20
Loss on sale of business	-	9,239	9,239
Share based payments	288	490	1,082
Purchase of shares in relation to exercise of share options	-	-	(219)
Decrease/(increase) in inventories	1,402	7,646	7,905
Decrease/(increase) in trade and other receivables	6,691	(11,231)	(18,330)
Increase/(decrease) in trade and other payables	586	(4,060)	301
(Decrease)/increase in provisions	(3,710)	(610)	116
Contribution to defined benefit pension schemes	(120)	(40)	(80)
Movements/cash settlements in relation to derivative financial instruments	(17)	(1,648)	(2,212)
Cash generated from/(used in) operations	13,457	(314)	5,342

Reconciliation of cash and cash equivalents and net debt

For the periods ending

	Unaudited
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Cash and cash equivalents within current assets	10,756	13,339	11,948
Cash and cash equivalents within assets held for sale	111	-	-
Bank overdrafts included within current liabilities	-	-	-
Cash and cash equivalents at end of period	10,867	13,339	11,948
Short term and secured loans within current liabilities	(9,396)	(7,439)	(8,614)
Finance lease and hire purchase obligations within current liabilities	(603)	(670)	(562)
Finance lease and hire purchase obligations within non-current liabilities	(1,079)	(1,606)	(1,401)
Long term secured loans within non-current liabilities	(88,979)	(93,511)	(95,004)
Unamortised debt issuance costs within non-current liabilities	536	862	699
Net debt at end of period	(88,654)	(89,025)	(92,934)

Cash and cash equivalents comprise of cash on hand, demand deposits and overdrafts. Unless an enforceable right of set-off exists, the components of cash and cash equivalents are reflected on a gross basis in the balance sheet.

Net debt is defined as the Group's borrowings (net of unamortised issuance costs) and finance leases, less cash and cash equivalents.

Notes to the Half Year Report

1. Basis of preparation

Basis of preparation

Hampson Industries PLC (the "Company") is a Company domiciled in the United Kingdom. The unaudited condensed consolidated half year financial statements for the six months ended 30 September 2011 comprise of the Company and its subsidiaries.

These half year condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 31 March 2011. The comparative figures for the year ended 31 March 2011 do not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 March 2011 has been delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Going concern

The Group meets its day-to-day working capital requirements and medium term funding requirements through a mixture of committed bank borrowing facilities, finance leases and loan notes. The bank borrowing and loan note facilities, which total approximately £128 million (post disposal of the Shims businesses £78 million), include certain covenant tests. The failure of a covenant test renders the entire facilities repayable on demand at the option of the Group's lenders. There have been no breaches in covenants during the period.

The Directors have assessed the Group's anticipated future results and working capital requirements having prepared detailed, bottom up financial forecasts in September 2011 which have been subject to detailed review with each of the Group's major business units. The forecasts make assumptions in respect of future trading conditions and the recovery of loss making businesses and in particular, in the immediate 12 months, assume no further significant slippage in the development of major aircraft programmes and a continuation of current working capital requirements.

Whilst for the next 12 months it is anticipated that there will be no covenant breaches, due to the tightening of the leverage and interest covenants from September 2012 onwards, for the quarters December 2012 to June 2013, current projections show a breach on the leverage covenant by approximately £2 million of EBITDA per covenant test.

Due to the Group's bank borrowing facilities maturing in April 2013, the Group expects to refinance its debts in the near term regardless of covenant position, and thus expects to address these potential breaches as part of future discussions.

The Group is currently in the early stages of refinancing its facilities with lenders with a target for completion before the announcement of the preliminary results for the year ended 31 March 2012. Based on current guidance from professional advisors as to the success of the refinancing efforts, and forecasting a reasonable downside scenario such as lower revenues, slower recovery of gross margin and higher working capital requirements prior to the refinancing completing, the Directors expect to meet the current covenants up to the refinancing event. Mitigating activities such as the deferral of non essential capital expenditure and the non payment of bonuses would also be available if required. For these reasons, the Directors continue to adopt the going concern basis in preparing these financial statements.

1. Basis of preparation continued

Measurement and performance reporting

In addition to the "statutory" measures of profit, reference is made throughout to the impact on the continuing Group's profit before tax and earnings per share of excluding the following items; restructuring and rationalisation charges, impairment charges, gains and losses on disposal or closure of businesses, amortisation of intangible assets arising on acquisition, changes in the net fair value of financial instruments and the results of discontinued operations. The Directors believe that exclusion of these items allows trends in the performance of the Group's continuing business to be more easily identified and understood. Reference is made throughout to the terms "trading profit", "adjusted profit before tax" and "adjusted earnings per share", which are defined, respectively, as operating profit, profit before tax and earnings per share adjusted to exclude all of the fore-going items.

Changes in accounting policies

Except as described below, the accounting policies and basis of consolidation applied by the Group in these unaudited half year condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements for the year ended 31 March 2011.

Standards, revisions and amendments to standards and interpretations

New standards, revisions and amendments to standards and interpretations required to be adopted in the period have had no material impact on the Group's results, assets and liabilities.

Re-presentation of prior period accounts

Disclosure of Attewell Limited, Lamsco West Inc. and Bolsan Company Inc.

Following shareholder approval on 19 September 2011, on 4 October 2011 the Group disposed of its entire 100% shareholding in Attewell Limited, Lamsco West Inc. and Bolsan Company Inc., also known as the Shims businesses. As a result, as at 30 September 2011 the assets and liabilities of the Shims businesses were presented as held for sale, and due to the Group exiting the shims market in accordance with IFRS 5 its results have been classified as a discontinued operation and the comparative periods have been amended accordingly.

Classification of operating segments

As a result the Group has two continuing operating segments: Aerostructures & Composites, which includes BHW (Components) Limited, the Group's Indian operations, the Shims businesses, Composites Horizons Inc. and Texstars Inc., and Tooling, which includes Coast Composites Inc., Global Tooling Systems Inc. and Odyssey Industries Inc. At a Group level there is no impact on the reported revenues, profits or net assets. Comparative periods have been amended to reflect the revised segmental structure.

The main change as part of this re-classification is that the results of the tooling businesses have been separated out from those of Composites Horizons Inc. and Texstars Inc., which have now been included within the Aerostructures & Composites segment (previously the Aerospace Components & Structures segment).

Critical accounting estimates and judgements

In the process of applying the Group's accounting policies, management has made a number of judgements. The process of preparing these unaudited half year condensed consolidated financial statements inevitably requires the Group to make estimates and assumptions concerning the future and the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and judgements that have the most significant effect on the amounts included with these unaudited half year condensed consolidated financial statements were the same as those that applied to the audited consolidated financial statements for the year ended 31 March 2011, along with the specific risks and uncertainties noted on page 4.

1. Basis of preparation continued

Seasonality

The Group does not have any revenue or results that are materially impacted by seasonality.

Approval of unaudited half year condensed consolidated financial statements

The unaudited half year condensed consolidated financial statements were approved for issue on behalf of the Board of Directors on 16 November 2011.

2. Exchange rates

The principal exchange rates used were as follows:

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
Sterling to US Dollar (GBP 1 = US$):
Average for period	1.62	1.52	1.56
Period end	1.56	1.58	1.60
Sterling to Indian Rupee (GBP 1 = INR):
Average for period	73.54	70.26	71.18
Period end	77.08	70.97	72.69

Assets and liabilities of overseas undertakings are translated at the rate of exchange ruling at the Balance Sheet date and the Income Statement is translated at the average rate of exchange.

3. Segmental analysis

During the period the Group amended its internal reporting structure to give better visibility to the chief operating decision maker as to the trading performance of certain businesses, and to more closely align segmental reporting to the management structure of the Group and the way the Group is marketed to external parties. As a result the Group has two continuing operating segments: Aerostructures & Composites, which includes BHW (Components) Limited, the Group's Indian operations, the Shims businesses, Composites Horizons Inc. and Texstars Inc., and Tooling, which includes Coast Composites Inc., Global Tooling Systems Inc. and Odyssey Industries Inc.

3. Segmental analysis continued

Segment information for revenue and profit:

Half year to 30 September 2011	Aerostructures & Composites	Tooling	Automotive Turbocharger	Segment Total	Corporate & Unallocated	Group Total
Half year to 30 September 2011	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations:
Revenue	17,281	59,455	-	76,736	-	76,736
Trading profit/(loss)	91	7,120	-	7,211	(2,888)	4,323
Restructuring and rationalisation charges	-	-	-	-	(540)	(540)
Impairment charges	-	(28,273)	-	(28,273)	-	(28,273)
Gains and losses on disposal or closure of businesses	-	-	-	-	-	-
Changes in fair value of derivative financial instruments	-	-	-	-	17	17
Amortisation of intangible assets on acquisition	(135)	(190)	-	(325)	-	(325)
Operating profit/(loss)	(44)	(21,343)	-	(21,387)	(3,411)	(24,798)
Net financing costs	-	-	-	-	(6,221)	(6,221)
Profit/(loss) before taxation	(44)	(21,343)	-	(21,387)	(9,632)	(31,019)
Taxation	-	-	-	-	12,023	12,023
Profit/(loss) for the period after taxation	(44)	(21,343)	-	(21,387)	2,391	(18,996)
Discontinued operations:
Post tax results from discontinued operations	2,097	-	-	2,097	-	2,097
Net profit/(loss) attributable to equity shareholders	2,053	(21,343)	-	(19,290)	2,391	(16,899)

Intra-segment sales for the half year to 30 September 2011 were £1,908,000 (half year to 30 September 2010: £12,000, year ended 31 March 2011: £1,422,000). Intra-segment sales are priced on an arm's length basis.

3. Segmental analysis continued

	Re-presented (note 1)
Half year to 30 September 2010	Aerostructures & Composites	Tooling	Automotive Turbocharger	Segment Total	Corporate & Unallocated	Group Total
Half year to 30 September 2010	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations:
Revenue	18,396	64,936	-	83,332	-	83,332
Trading profit/(loss)	(630)	6,189	-	5,559	(1,039)	4,520
Restructuring and rationalisation charges	(34)	(53)	-	(87)	(620)	(707)
Impairment charges	-	(3,288)	-	(3,288)	-	(3,288)
Gains and losses on disposal or closure of businesses	-	-	-	-	-	-
Changes in fair value of derivative financial instruments	-	-	-	-	719	719
Amortisation of intangible assets on acquisition	(144)	(203)	-	(347)	-	(347)
Operating profit/(loss)	(808)	2,645	-	1,837	(940)	897
Net financing costs	-	-	-	-	(2,822)	(2,822)
Profit/(loss) before taxation	(808)	2,645	-	1,837	(3,762)	(1,925)
Taxation	-	-	-	-	1,139	1,139
Profit/(loss) for the period after taxation	(808)	2,645	-	1,837	(2,623)	(786)
Discontinued operations:
Post tax results from discontinued operations	1,907	-	(10,684)	(8,777)	(64)	(8,841)
Net profit/(loss) attributable to equity shareholders	1,099	2,645	(10,684)	(6,940)	(2,687)	(9,627)

	Re-presented (note 1)
For the year ended 31 March 2011	Aerostructures & Composites	Tooling	Automotive Turbocharger	Segment Total	Corporate & Unallocated	Group Total
For the year ended 31 March 2011	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations:
Revenue	38,946	131,123	-	170,069	-	170,069
Trading profit/(loss)	393	15,309	-	15,702	(3,799)	11,903
Restructuring and rationalisation charges	(46)	(331)	-	(377)	(839)	(1,216)
Impairment charges	-	(38,726)	-	(38,726)	-	(38,726)
Gains and losses on disposal or closure of businesses	-	-	-	-	-	-
Changes in fair value of derivative financial instruments	-	-	-	-	(2)	(2)
Amortisation of intangible assets on acquisition	(281)	(396)	-	(677)	-	(677)
Operating profit/(loss)	66	(24,144)	-	(24,078)	(4,640)	(28,718)
Net financing costs	-	-	-	-	(7,901)	(7,901)
Profit/(loss) before taxation	66	(24,144)	-	(24,078)	(12,541)	(36,619)
Taxation	-	-	-	-	19,854	19,854
Profit/(loss) for the period after taxation	66	(24,144)	-	(24,078)	7,313	(16,765)
Discontinued operations:
Post tax results from discontinued operations	3,300	-	(10,684)	(7,384)	(3,337)	(10,721)
Net profit/(loss) attributable to equity shareholders	3,366	(24,144)	(10,684)	(31,462)	3,976	(27,486)

3. Segmental analysis continued

Segment information for assets:

Half year to 30 September 2011	Aerostructures & Composites	Tooling	Automotive Turbocharger	Segment Total	Corporate & Unallocated	Group Total
Half year to 30 September 2011	£'000	£'000	£'000	£'000	£'000	£'000
Segment assets	80,725	259,568	-	340,293	3,409	343,702
Unallocated assets:
- Current taxation assets	-	-	-	-	-	-
- Deferred taxation assets	-	-	-	-	24,749	24,749
Total assets	80,725	259,568	-	340,293	28,158	368,451

Half year to 30 September 2010	Aerostructures & Composites	Tooling	Automotive Turbocharger	Segment Total	Corporate & Unallocated	Group Total
Half year to 30 September 2010	£'000	£'000	£'000	£'000	£'000	£'000
Segment assets	91,974	312,636	-	404,610	3,320	407,930
Unallocated assets:
- Current taxation assets	-	-	-	-	-	-
- Deferred taxation assets	-	-	-	-	3,086	3,086
Total assets	91,974	312,636	-	404,610	6,406	411,016

For the year ended 31 March 2011	Aerostructures & Composites	Tooling	Automotive Turbocharger	Segment Total	Corporate & Unallocated	Group Total
For the year ended 31 March 2011	£'000	£'000	£'000	£'000	£'000	£'000
Segment assets	92,734	279,313	-	372,047	510	372,557
Unallocated assets:
- Current taxation assets	-	-	-	-	-	-
- Deferred taxation assets	-	-	-	-	15,947	15,947
Total assets	92,734	279,313	-	372,047	16,457	388,504

Corporate and unallocated costs represent corporate costs. Segment assets comprise all non-current and current assets (as per the balance sheet presentation) but exclude current and deferred tax assets. Balances relating to taxation are not allocated to specific segments as these resources are managed centrally and no segments have sufficient autonomy to manage these resources.

Segment information by geographical region:

		Re-presented (note 1)
	Half year to 30 September 2011	Half year to 30 September 2010	Year ended 31 March 2011	Half year to 30 September 2011	Half year to 30 September 2010	Year ended 31 March 2011
	Revenue	Revenue	Revenue	Assets	Assets	Assets
	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations:
UK	6,309	4,811	10,846	6,179	3,366	5,705
Europe	3,177	12,041	17,499	-	-	-
North America	66,252	65,365	139,458	331,440	399,118	363,507
Rest of World	998	1,115	2,266	2,674	2,126	2,835
Corporate and unallocated	-	-	-	28,158	6,406	16,457
	76,736	83,332	170,069	368,451	411,016	388,504

Segment revenue is disclosed by geographical location of the Group's customers. Segment assets are disclosed by geographical location of the Group's assets.

3. Segmental analysis continued

Segment information on major customers:

Revenues from the Group's major customers, which is defined as customers which provide greater than 10% of the Group's revenue for the period, is shown below:

For the half year to 30 September 2011 revenues from the Group's major customers did not exceed 10% of the Group's revenue for the period.

Half year to

30 September 2010

Aerostructures & Composites

Tooling

Automotive

Turbocharger

Segment

Total

Corporate & Unallocated

Group

Total

£'000

The Boeing Company

794

7,983

8,777

For the year ended

31 March 2011

Aerostructures & Composites

Tooling

Automotive

Turbocharger

Segment

Total

Corporate & Unallocated

Group

Total

£'000

The Boeing Company

1,575

26,983

28,558

4. Operating (loss)/profit

Reconciliation of revenue to total operating (loss)/profit:

		Re-presented (note 1)
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Revenue	76,736	83,332	170,069
Cost of sales	(59,762)	(71,043)	(137,640)
Gross profit	16,974	12,289	32,429
Other income	48	122	73
Distribution costs	(1,336)	(525)	(1,698)
Administrative expenses	(40,484)	(10,989)	(59,522)
Operating (loss)/profit	(24,798)	897	(28,718)

Trading profit for the year ended 31 March 2011 includes a net benefit of £1,317,000 arising from settlement of legal claims less legal costs paid in the year.

5. Adjustments

Restructuring and rationalisation charges

Charges of £540,000 (half year to 30 September 2010: £707,000, year ended 31 March 2011: £1,216,000) included within operating (loss)/profit relate primarily to employment termination, recruitment and legal costs.

Charges of £2,852,000 (half year to 30 September 2010: £nil, year ended 31 March 2011: £1,714,000) included within net financing costs relate to fees paid to the Group's senior lenders and professional and legal costs in relation to amendments to certain borrowing covenants.

Impairment charges

5. Adjustments continued

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Impairment of goodwill	28,273	-	34,617
Impairment of inventory	-	3,288	4,109
Total impairment charges	28,273	3,288	38,726

During the prior year an assessment of the carrying value of goodwill was undertaken, with an impairment charge of £34,617,000 recognised in relation to the Tooling cash generating unit (CGU). Further details on the assumptions used as part of the goodwill impairment assessment can be located in note 14 on pages 77 to 79 within the Group's Annual Report for the year ended 31 March 2011.

During the half year to 30 September 2011 a further review of the carrying value of goodwill was undertaken, with an impairment charge of £28,273,000 recognised in relation to the Tooling CGU. The key assumptions used as part of the assessment, such as discount rates, growth rates and assumptions specific to each CGU, were the same as those at the 31 March 2011 review, with the exception of the five year detailed projections of operating cashflows, which had been updated in September 2011. Due to the lower operating cashflow forecasts over the five year period within the Tooling CGU, this resulted in the recoverable amount of goodwill being lower than its carrying value, and thus an impairment was recognised.

Following a detailed review of inventory during the prior year at certain North American sites, the Group recognised impairment charges primarily in relation to loss-making contracts and onerous contracts where costs to complete would exceed revenues earned.

Gains and losses on disposal or closure of businesses

During the half year to 30 September 2011, half year to 30 September 2010 and year ended 31 March 2011 no disposals or closures of businesses that do not meet the requirements of IFRS 5 occurred.

Changes in net fair value of derivative financial instruments

IAS 39 requires derivative financial instruments to be valued at the balance sheet date and any difference between that value and the intrinsic value of the instrument to be reflected in the balance sheet as an asset or liability. Any subsequent change in value is reflected in the Income Statement unless hedge accounting is achieved. Such movements do not affect cash flow or the economic substance of the underlying transaction, and thus to aid in year-on-year comparability, the change in value has been identified separately. As a result the changes in net fair value of derivative financial instruments were:

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
(Credits)/charges included within operating (loss)/profit relating to non interest instruments	(17)	(719)	2
Credits included within net financing costs relating to interest instruments	(518)	(658)	(665)
	(535)	(1,377)	(663)

Amortisation of intangible assets on acquisition

As required under IFRS 3 'Business Combinations' and IAS 38 'Intangible Assets', intangible assets identified on acquisition have been amortised during the period - £325,000 (half year to 30 September 2010: £347,000, year to 31 March 2011: £677,000).

The net cash outflow from adjustments charged during the period amounted to £3,740,000 (half year to 30 September 2010: £707,000 outflow, year to 31 March 2011: £2,581,000 outflow).

6. Share based payments

Four new share scheme awards were issued during the half year to 30 September 2011, one under the Performance Share Plan (PSP), one under the Co-Investment Plan (CIP) and two under the Restricted Stock Plan (RSP) (half year to 30 September 2010: two awards under the PSP, year to 31 March 2011: two awards under the PSP). Further details of awards issued during the prior year can be located in note 9 on pages 69 to 73 within the Group's Annual Report for the year ended 31 March 2011. Options granted during the period have been valued at the date of grant by an independent third party, Kepler Associates Limited.

3 year PSP 2011 Award

During the period awards were made under the 3 year PSP 2011 Award in September 2011. Under these awards, options are granted on the condition of continued employment and the performance criteria being met over the measurement period.

65% of the conditional award is available if the average annualised growth in EPS (defined as earnings per share before restructuring and rationalisation charges, impairment charges, gains and losses on the sale or closure of businesses, changes in the net fair value of financial instruments and amortisation of intangible assets on acquisition) over each of the 3 years of the performance period (1 April 2011 to 31 March 2014) relative to the base EPS (EPS of the financial year immediately preceding the performance period) less the corresponding growth in the retail prices index (RPI) is at least 15%. Awards will start to accrue on a pro rata basis from 0-65% if EPS performance is at least 5%.

The further 35% becomes available if the Group's total shareholder return (TSR) over the performance period (1 April 2011 to 31 March 2014) exceeds the median TSR achieved by a select group of sector peers by 13%. Awards will accrue pro rata from 0-35% if the Group's TSR is at least equivalent to that of its peers.

For executive Directors and members of the Executive Committee of the Board of Directors of Hampson Industries PLC, the performance measures are split on a 50:50 basis between the EPS and TSR measures noted above to reflect the greater ability of these individuals to influence the Group's TSR.

Participants in the conditional award are required to retain 50% of vested awards (net of tax) until a minimum of 50% of salary is held, except for executive Directors who are required to hold a minimum of one times salary.

Co-Investment Plan

Executive Directors and members of the Executive Committee of the Board of Directors of Hampson Industries PLC are required to defer 25% of their earned annual bonus into trust shares. Participants are also entitled to voluntarily invest up to a further 25% of their bonus in shares. The Company will match shares on a one for one basis for both the mandatory and voluntary shares invested subject to achievement of performance conditions. Voluntarily invested shares will normally be released and mandatorily invested shares and matching shares will normally vest on the 3rd anniversary of the date of grant provided the participant is still an employee of the Group at that time. Mandatory and matching shares will vest if over three complete financial years (beginning in the financial year in which the award occurs) the following performance criteria are met:

50% of the award is available if the average annualised growth in EPS (defined as earnings per share before restructuring and rationalisation charges, impairment charges, gains and losses on the sale or closure of businesses, changes in the net fair value of financial instruments and amortisation of intangible assets on acquisition) over each of the 3 years of the performance period (1 April 2011 to 31 March 2014) relative to the base EPS (EPS of the financial year immediately preceding the performance period) less the corresponding growth in the retail prices index (RPI) is at least 15%. Awards will start to accrue on a pro rata basis from 0-50% if EPS performance is at least 5%.

The remaining 50% becomes available if the Group's total shareholder return (TSR) over the performance period (1 April 2011 to 31 March 2014) exceeds the median TSR achieved by a select group of sector peers by 13%. Awards will accrue pro rata from 0-50% if the Group's TSR is at least equivalent to that of its peers.

6. Share based payments continued

Two CIP participants received bonuses for the year ended 31 March 2011 and an award was therefore made under the CIP in September 2011.

3 year RSP 2011 Award

During the period two awards were made under the 3 year RSP 2011 Award in September 2011. Under these awards, options are granted on the condition of continued employment for a period of three years. For the Group Chief Executive only, the options are also conditional on the company arranging a material refinancing of its debt to the satisfaction of the Remuneration Committee of the Group.

Participants in the award are required to retain 50% of vested awards (net of tax) until a minimum of 50% of salary is held, except for executive Directors who are required to hold a minimum of one times salary.

The fair value of services received in return for share options granted is measured by reference to the fair value of share options granted:

Grant Date	2/9/11	2/9/11	2/9/11	27/9/11
Scheme	PSP	CIP	RSP	RSP
Share price at grant date	16.75p	16.75p	16.75p	13.00p
Exercise price	0.0p	0.0p	0.0p	0.0p
Number of employees	50	2	11	2
Number of share options	12,883,077	774,423	3,750,722	4,070,201
Vesting period	3 years	3 years	3 years	3 years
Expected volatility	58%	58%	58%	58%
Option life	3 years	3 years	3 years	3 years
Expected life	3 years	3 years	3 years	3 years
Risk free rate	1.29%	1.29%	1.29%	1.29%
Fair value per option	10.3p	11.7p	13.4p	10.4p

The number of share options granted to employees as part of the 27 September 2011 RSP award was based on the share price at grant date as at the 2 September 2011 award.

The expected volatility is based on historical volatility over a period commensurate with the term of the awards. The expected life is the average expected period to exercise. The risk free rate of return is the rate attainable from government securities over a term consistent with the assumed option life.

The possibility of ceasing employment before vesting for the 3 year 2011 PSP, the CIP and both awards under the 3 year 2011 RSP has been assumed to be 51%. The expectation of meeting the EPS performance criteria has been estimated for the 3 year 2011 PSP, the CIP and both awards under the 3 year 2011 RSP at 75%. The expectation of meeting the TSR performance criteria has been estimated at 15% for both the awards under the 3 year 2011 PSP and the 3 year 2011 RSP.

Other transactions

No other share options vested or were exercised during the period.

7. Taxation

The taxation credit for the half year to 30 September 2011 from continuing operations was 39% (half year to 30 September 2010: 59% credit, year to 31 March 2011: 54% credit).

8. Discontinued operations

		Re-presented (note 1)
	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Discharge of liabilities associated with previously discontinued operations	-	(64)	(78)
Post tax results of discontinued businesses	2,097	462	1,855
Post tax loss on disposal of discontinued businesses	-	(9,239)	(9,239)
Costs associated with litigation and settlement relating to discontinued operations	-	-	(3,259)
Post tax results from discontinued operations	2,097	(8,841)	(10,721)

Discharge of liabilities associated with previously discontinued operations

Costs in order to discharge liabilities in relation to companies previously classified as discontinued operations relate to legal and property costs.

Disposal of Attewell Limited, Lamsco West Inc. and Bolsan Company Inc.

Following shareholder approval on 19 September 2011, on 4 October 2011 the Group disposed of its entire 100% shareholding in Attewell Limited, Lamsco West Inc. and Bolsan Company Inc., also known as the Shims businesses, to a company backed by the funds of Bridgepoint Development Capital. As a result, as at 30 September 2011 the assets and liabilities of the Shims businesses were presented as held for sale, and due to the Group exiting the shims market in accordance with IFRS 5 its results have been classified as a discontinued operation.

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	Total	Total	Total
	£'000	£'000	£'000
Revenue	14,595	12,803	27,418

Operating profit	2,646	3,198	5,412
Analysed as:
Trading profit	2,747	3,306	5,623
Amortisation of intangible assets on acquisition	(101)	(108)	(211)

Net financing costs	11	30	77
Analysed as:
Financial income	21	31	81
Financial expense	(10)	(1)	(4)

Profit before taxation	2,657	3,228	5,489
Taxation	(560)	(1,321)	(2,189)
Profit after taxation	2,097	1,907	3,300

The net cash flows in relation to the Shims businesses for the half year to 30 September 2011 were £42,000 inflow from operating activities (half year to 30 September 2010: £2,129,000 inflow, year to 31 March 2011: £5,413,000 inflow), £1,490,000 outflow from investing activities (half year to 30 September 2010: £84,000 outflow, year to 31 March 2011: £346,000 outflow) and £11,000 inflow from financing activities (half year to 30 September 2010: £30,000 inflow, year to 31 March 2011: £77,000 inflow).

Included within other debtors are professional and legal costs of £1,623,000 in relation to the disposal and £1,878,000 of costs in relation to the roll-over of foreign exchange contracts associated with the disposal. These costs will be deducted as part of the gain on disposal calculation.

8. Discontinued operations continued

Assets of the Shims businesses held for sale were as follows:

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Goodwill	15,942	-	-
Intangible fixed assets	2,893	-	-
Property, plant and equipment	2,685	-	-
Inventories	5,376	-	-
Trade and other receivables	4,562	-	-
Cash and cash equivalents	111	-	-
Assets held for sale	31,569	-	-

Liabilities of the Shims businesses held for sale were as follows:

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Trade and other payables	3,704	-	-
Taxation	-	-	-
Liabilities held for sale	3,704	-	-

Disposal of Hampson Precision Automotive Limited

On 23 June 2010 the Group disposed of its entire 100% shareholding in Hampson Precision Automotive Limited to a company backed by the directors of GIL Investments Limited. Due to the Group exiting the automotive turbocharger market, in accordance with IFRS 5 its results have been classified as a discontinued operation.

The results of Hampson Precision Automotive Limited, that are included within discontinuing operations, were as follows:

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	Total	Total	Total
	£'000	£'000	£'000
Revenue	-	2,494	2,494

Operating loss	-	(1,329)	(1,329)
Analysed as:
Trading loss	-	(1,329)	(1,329)

Net financing costs	-	(116)	(116)
Analysed as:
Financial income	-	-	-
Financial expense	-	(116)	(116)

Loss before taxation	-	(1,445)	(1,445)
Taxation	-	-	-
Loss after taxation	-	(1,445)	(1,445)

The net cash flows in relation to Hampson Precision Automotive Limited for the half year to 30 September 2011 were £nil from operating activities (half year to 30 September 2010: £176,000 outflow, year to 31 March 2011: £176,000 outflow), £nil from investing activities (half year to 30 September 2010: £4,000 outflow, year to 31 March 2011: £4,000 outflow) and £nil from financing activities (half year to 30 September 2010: £116,000 outflow, year to 31 March 2011: £116,000 outflow).

8. Discontinued operations continued

The Group's loss on disposal of Hampson Precision Automotive Limited was as follows:

	£'000
Consideration - satisfied by cash	2,485
Consideration - total	2,485
Goodwill	-
Intangible fixed assets	611
Property, plant and equipment	9,475
Inventories	596
Trade and other receivables	1,598
Taxation	231
Cash and cash equivalents	-
Trade and other payables	(1,665)
Net assets disposed	10,846
Loss on disposal before directly attributable costs	(8,361)
Directly attributable costs in relation to disposal	(878)
Loss on disposal of Hampson Precision Automotive Limited	(9,239)

Directly attributable costs relate to legal and other professional costs associated with the disposal.

As part of the disposal of Hampson Precision Automotive Limited, Hampson Industries PLC disposed of the freehold interest in the properties in Skelmersdale, UK occupied by the business to a company backed by the directors of GIL Investment Limited. The carrying value of the properties as at the date of disposal was £1,409,000. The properties were sold for £1,100,000, creating a loss on disposal of £309,000, which is included within the above disposal calculation.

An analysis of the net inflow of cash in respect of disposals is as follows:

	£'000
Cash consideration - Hampson Precision Automotive Limited	2,485
Directly attributable costs in relation to the disposal of Hampson Precision Automotive Limited	(878)
Net inflow of cash and cash equivalents for disposals	1,607

Costs associated with litigation and settlement relating to discontinued operations

Following the disposal of Hampson Precision Automotive Limited on 23 June 2010, legal proceedings were commenced by Erlson Precision Holdings Limited ("Erlson") regarding alleged misrepresentations made about a significant customer as part of the sale process. On 20 April 2011 the High Court found in favour of Erlson, and held that the contract should be rescinded and a percentage of Erlson's legal costs paid. The Group appealed the decision, however on 3 June 2011 the parties agreed that the Group would pay £1,500,000 by way of compensation plus a contribution towards legal fees.

During the year ended 31 March 2011 the Group incurred £459,000 of legal costs in relation to litigation and provided £2,800,000 in its financial statements for the year ended 31 March 2011 in relation to the settlement of this liability and additional legal costs incurred by the Group.

9. Dividends

	Half year to 30 September 2011	Half year to 30 September 2010	Year to 31 March 2011
	£'000	£'000	£'000
Equity dividends paid in the period:
Previous year final: 0.00p (2010: 0.90p) per 25p ordinary share	-	2,500	2,500
Current year interim: 0.00p (2010: 0.00p) per 25p ordinary share	-	-	-
	-	2,500	2,500

The Directors propose that no interim dividend be paid in respect of the financial year ended 31 March 2012.

10. Earnings per share

Basic Earnings per Share

Basic earnings per share is calculated by dividing the profit attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year.

Diluted Earnings per Share

Diluted earnings per share is calculated by dividing the profit attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year, adjusted for any dilutive potential ordinary shares, primarily share options. For share options issued under the Executive Share Options Schemes, the calculation is performed by determining the number of shares that could have been acquired at fair value and compared with the number of shares that would have been issued assuming the exercise of the share options. For share options issued under the Performance Share Plans, Restricted Share Plans and Co-Investment Plans, the calculation is performed by assessing what percentage of the terms and conditions of vesting had been achieved as at the balance sheet date to determine the number of shares that could have been issued.

	Half year to 30 September 2011	Half year to 30 September 2011	Half year to 30 September 2011
	Earnings	Weighted average number of shares	Earnings per 25 pence share
	£'000	Number	Pence
Continuing Operations:
Basic EPS	(18,996)	279,296,023	(6.80)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(18,996)	279,296,023	(6.80)
Discontinued Operations:
Basic EPS	2,097	279,296,023	0.75
Dilutive potential ordinary shares	-	-	-
Diluted EPS	2,097	279,296,023	0.75
Total Operations:
Basic EPS	(16,899)	279,296,023	(6.05)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(16,899)	279,296,023	(6.05)

For the period ended 30 September 2011, no potential ordinary shares have been included within the statutory diluted earnings per share calculations, due to these being anti-dilutive. The weighted number of potential ordinary shares would have been 601,157. The potential ordinary shares have been included within the diluted adjusted earnings per share noted below, due to these having a dilutive effect.

10. Earnings per share continued

	Re-presented (note 1)
	Half year to 30 September 2010	Half year to 30 September 2010	Half year to 30 September 2010
	Earnings	Weighted average number of shares	Earnings per 25 pence share
	£'000	Number	Pence
Continuing Operations:
Basic EPS	(786)	277,727,933	(0.28)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(786)	277,727,933	(0.28)
Discontinued Operations:
Basic EPS	(8,841)	277,727,933	(3.18)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(8,841)	277,727,933	(3.18)
Total Operations:
Basic EPS	(9,627)	277,727,933	(3.46)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(9,627)	277,727,933	(3.46)

For the period ended 30 September 2010, no potential ordinary shares have been included within the statutory diluted earnings per share calculations for discontinued or total operations, due to these being anti-dilutive. The weighted number of potential ordinary shares would have been 669,953. The potential ordinary shares have been included within the diluted adjusted earnings per share noted below, due to these having a dilutive effect.

	Re-presented (note 1)
	Year to 31 March 2011	Year to 31 March 2011	Year to 31 March 2011
	Earnings	Weighted average number of shares	Earnings per 25 pence share
	£'000	Number	Pence
Continuing Operations:
Basic EPS	(16,765)	278,475,461	(6.02)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(16,765)	278,475,461	(6.02)
Discontinued Operations:
Basic EPS	(10,721)	278,475,461	(3.85)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(10,721)	278,475,461	(3.85)
Total Operations:
Basic EPS	(27,486)	278,475,461	(9.87)
Dilutive potential ordinary shares	-	-	-
Diluted EPS	(27,486)	278,475,461	(9.87)

10. Earnings per share continued

Adjusted Earnings per Share

Earnings per share based on continuing activities before restructuring and rationalisation charges, impairment charges, gains and losses on the sale or closure of businesses, changes in the net fair value of financial instruments and amortisation of intangible assets on acquisition, which the Directors consider allows trends in the performance of the Group to be more easily identified and understood, is calculated on the earnings of the year adjusted as follows:

	Half year to 30 September 2011	Half year to 30 September 2011
	Earnings	Earnings per 25 pence share
	£'000	Pence
Continuing operations:
Loss attributable to equity shareholders	(18,996)	(6.80)
Adjustments for:
- Restructuring and rationalisation charges	3,392	1.21
- Impairment charges	28,273	10.12
- Gains and losses on disposal or closure of businesses	-	-
- Changes in net fair value of derivative financial instruments	(535)	(0.19)
- Amortisation of intangible assets on acquisition	325	0.12
Taxation on adjustments	(8,178)	(2.93)
Adjusted earnings per share attributable to equity shareholders	4,281	1.53
Diluted adjusted earnings per share attributable to equity shareholders	4,281	1.53

	Re-presented (note 1)
	Half year to 30 September 2010	Half year to 30 September 2010
	Earnings	Earnings per 25 pence share
	£'000	Pence
Continuing operations:
Loss attributable to equity shareholders	(786)	(0.28)
Adjustments for:
- Restructuring and rationalisation charges	707	0.26
- Impairment charges	3,288	1.18
- Gains and losses on disposal or closure of businesses	-	-
- Changes in net fair value of derivative financial instruments	(1,377)	(0.49)
- Amortisation of intangible assets on acquisition	347	0.12
Taxation on adjustments	(801)	(0.29)
Adjusted earnings per share attributable to equity shareholders	1,378	0.50
Diluted adjusted earnings per share attributable to equity shareholders	1,378	0.50

10. Earnings per share continued

	Re-presented (note 1)
	Year to 31 March 2011	Year to 31 March 2011
	Earnings	Earnings per 25 pence share
	£'000	Pence
Continuing operations:
Loss attributable to equity shareholders	(16,765)	(6.02)
Adjustments for:
- Restructuring and rationalisation charges	2,930	1.05
- Impairment charges	38,726	13.91
- Gains and losses on disposal or closure of businesses	-	-
- Changes in net fair value of derivative financial instruments	(663)	(0.24)
- Amortisation of intangible assets on acquisition	677	0.24
Taxation on adjustments	(11,668)	(4.19)
Adjusted earnings per share attributable to equity shareholders	13,237	4.75
Diluted adjusted earnings per share attributable to equity shareholders	13,237	4.75

11. Goodwill

During the six months ended 30 September 2011 the Group acquired goodwill with a cost of £nil (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil) through acquisition of subsidiaries.

Goodwill with a net book value of £nil was disposed during the six months ended 30 September 2011 (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil) through disposal of subsidiaries.

Goodwill with a net book value of £15,942,000 was reclassified as assets held for sale during the six months ended 30 September 2011 (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil).

During the six months ended 30 September 2011, goodwill with a net book value of £28,273,000 was subject to impairment (half year to 30 September 2010: £nil, year ended 31 March 2011: £34,617,000). For further details, see note 5.

All remaining movements in goodwill relate to exchange adjustments between financial reporting periods due to the majority of the Group's goodwill being held in US Dollars.

12. Intangible assets

During the six months ended 30 September 2011 the Group acquired assets with a cost of £598,000 (half year to 30 September 2010: £1,068,000, year ended 31 March 2011: £2,637,000). £nil of assets were acquired through acquisition of subsidiaries (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil).

Assets with a net book value of £nil were disposed during the six months ended 30 September 2011 (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil). In addition, assets with a net book value of £nil were disposed through the process of disposal of subsidiaries (half year to 30 September 2010: £611,000, year ended 31 March 2011: £611,000).

Assets with a net book value of £2,893,000 were reclassified as assets held for sale during the six months ended 30 September 2011 (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil).

During the six months ended 30 September 2011, assets with a net book value of £nil were subject to impairment (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil).

13. Property, plant and equipment

During the six months ended 30 September 2011 the Group acquired assets with a cost of £2,686,000 (half year to 30 September 2010: £2,940,000, year ended 31 March 2011: £4,020,000). £nil of assets were acquired through acquisition of subsidiaries (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil).

Assets with a net book value of £1,212,000 were disposed during the six months ended 30 September 2011 (half year to 30 September 2010: £12,000, year ended 31 March 2011: £36,000). In addition, assets with a net book value of £nil were disposed through the process of disposal of subsidiaries (half year to 30 September 2010: £9,475,000, year ended 31 March 2011: £9,475,000).

Assets with a net book value of £2,685,000 was reclassified as assets held for sale during the six months ended 30 September 2011 (half year to 30 September 2010: £nil, year ended 31 March 2011: £nil).

14. Pension and post-retirement benefits

During the period to 30 September 2011, the triennial actuarial valuation of the Group's defined benefit scheme as at 31 March 2010 was finalised. As part of this process, the Company agreed with the scheme trustees a recovery plan to make good the shortfall on the scheme over a period of 16 years from the valuation date. Contributions of £200,000 per annum will be paid by the Company, plus an amount equivalent to 8% of any future dividends paid out to shareholders, subject to minimum and maximum thresholds.

For the period to 30 September 2011, the Group has estimated the scheme valuation by using the latest actuarial valuations at 31 March 2011 and rolling forward on a year to date basis. The assumptions used are the same as those included in note 31 on page 94 - 97 within the Group's Annual Report for the year ended 31 March 2011, with the exception of the RPI inflation rate which has been reduced from 3.50% to 3.20%, CPI inflation rate which has been reduced from 2.70% to 2.40%, discount rate which has been reduced from 5.60% to 5.20% and mortality assumptions based on the SAPS (S1NA) tables with medium cohort projections and a minimum rate of improvement of 1% per annum compared to the PA92 medium cohort year of birth tables. As a result of these changes in assumption the Group has recognised a liability of £1,576,000 as at 30 September 2011.

As at 30 September 2011 there have been no significant fluctuations or one-off events during the period to the unfunded post-retirement medical scheme that would require adjustments to be made to its assumptions or valuation.

15. Financial risk management

As at 30 September 2011 the Group had committed bank and loan note facilities of £128,061,000, made up of £101,317,000 bank facilities and £26,744,000 loan note facilities. All bank facilities expire in April 2013. All loan note facilities expire in May 2015, although the lender has the option to advance maturity to April 2013 if certain forward looking projections about the Group's leverage, net indebtedness and undrawn available facilities are not achieved. The Group has available lease facilities, which are reviewed and potentially renewed on a rolling basis if undrawn, of £1,682,000.

As at 30 September 2011 the Group had undrawn committed bank facilities, on a floating rate basis, of £23,473,000 and no undrawn committed loan note facilities. As at 30 September 2011 £1,682,000 of the lease facilities had been drawn by the Group.

During the period there have been no breaches of covenants on the Group's main committed facilities.

15. Financial risk management (continued)

As part of the disposal of the Shims businesses the Group took out a US Dollar foreign exchange contract to hedge the transactional risk, due to the proceeds being paid in US Dollars and the majority of the repayment of the Group's debts being in sterling. Due to the disposal not occurring by 30 September 2011, the foreign exchange contract was rolled over, such that as at 30 September 2011 the Group had entered into a forward contract to sell US$65,259,000 at a rate of US$1.5577:£1.

On 4 October 2011 the Group disposed of its entire 100% shareholding in the Shims businesses, for further details see note 8. Under the terms of the Group's senior borrowing facilities, the proceeds (net of transaction expenses and taxation) were utilised to pay down part of the Group's external borrowings, and the total facilities available to the Group were reduced by an amount equal to the prepayment. In addition the covenants under the bank and loan note facilities were adjusted to reflect the updated Group's structure, being:

Covenant test date:	Net indebtedness to EBITDA	EBITA to net interest
31 December 2011	3.25x	2.30x
31 March 2012	3.20x	2.30x
30 June 2012	3.20x	2.70x
30 September 2012	2.60x	3.25x
31 December 2012	2.50x	3.75x
31 March 2013	2.50x	4.00x

16. Called up share capital

	As at 30 September 2011
	Number	£'000
Allotted, called up and fully paid:
Ordinary shares of 25p each - equity	279,296,023	69,824

	As at 30 September 2010
	Number	£'000
Allotted, called up and fully paid:
Ordinary shares of 25p each - equity	277,727,933	69,432

	As at 31 March 2011
	Number	£'000
Allotted, called up and fully paid:
Ordinary shares of 25p each - equity	279,296,023	69,824

Under the Companies Act 2006 and authority obtained at the 2009 Annual General Meeting the Company does not have an authorised share capital.

17. Related party transactions

Related party transactions with key management personnel

Key management personnel is defined as the main Board of Directors of Hampson Industries PLC and the Executive Committee of the Board of Directors of Hampson Industries PLC, which includes, in addition to the Executive Directors, a number of other senior managers with operational or functional responsibility within the Group.

Other than the remuneration of each individual, there have been no other transactions with key management personnel during the year.

17. Related party transactions (continued)

Related party transactions with other senior personnel

Composites Horizons Inc. leases part of its facility from a company that is part owned by a member of local senior management. This is considered a related party since Mr Jeffrey Hynes is President and CEO of Composites Horizons Inc. Mr Hynes does not sit on the main Board of Directors of Hampson Industries PLC or the Executive Committee of the Board of Directors of Hampson Industries PLC. Details of related transactions with Mr Hynes are as follows:

	Relationship of Mr Hynes			Total value of transaction for period ending
				30 September 2011	30 September 2010	31 March 2011
Counterparty		Transaction	Note	$'000	$'000	$'000
1517 Building LLC	33.3% owned	Lease of one factory as part of Composites Horizons Inc. facility - 1517 Industrial Park Street	(a)	95	91	184

(a) Composites Horizons Inc. leases part of its facilities from 1517 Building LLC. Under the terms of the seven year lease, which commenced on 1 July 2006, Composites Horizons Inc. is required to make total monthly rental payments of US$16,060 plus the payment of property taxes, maintenance and insurance, which was assessed as market value at the date of the lease. Monthly rental payment increases 4% each 1 July, and payments are due by the first of each month.

Other than transactions noted above and the remuneration of each individual, there have been no other transactions with senior personnel.

Related party transactions with significant shareholders

Related party transactions with businesses owned by Mr Randal Bellestri

As part of, and subsequent to, the acquisitions of Odyssey Industries Inc. and Global Tooling Systems Inc., the Group entered into various contracts with the principal vendor of both companies. These are considered to be related party transactions as the vendor, Mr. Randal Bellestri, continues to own approximately 3% of the Ordinary shares of the Company as of 30 September 2011. Details of related transactions with Mr Bellestri are as follows:

Relationship

of Mr Bellestri

Total value of transaction for period ending

30 September 2011

30 September 2010

31 March 2011

(a) During the period Odyssey Industries Inc. leased its principal facilities from RSS Holdings LLC. Under the terms of the five year lease, which commenced on 1 May 2008, Odyssey Industries Inc. is required to make total monthly rental payments of US$100,000 plus the payment of property taxes, maintenance and insurance, which was assessed as market value at the date of the acquisition. Payment terms of this lease are payable within one month of invoice.

Odyssey Industries Inc. has the ability to extend the lease under two five year option terms provided appropriate notice is given under the terms of the lease. For the five year period commencing 1 May 2013 total monthly rental payments would be US$110,000 plus property taxes, maintenance and insurance, and for the five year period commencing 1 May 2018 total monthly rental payments would be US$121,000 plus property taxes, maintenance and insurance.

17. Related party transactions continued

(b) During the period Global Tooling Systems Inc. leased its facilities from SSS Holdings LLC. Under the terms of the five year lease, which commenced on 1 October 2008, Global Tooling Systems Inc. is required to make total monthly rental payments of US$118,000 plus the payment of property taxes, maintenance and insurance from 1 January 2009, which was assessed as market value at the date of the lease agreement. Payment terms of this lease are payable within one month of invoice.

Global Tooling Systems Inc. has the ability to extend the lease under two five year option terms provided appropriate notice is given under the terms of the lease. For the five year period commencing 1 January 2014 total monthly rental payments would be US$130,000 plus property taxes, maintenance and insurance, and for the five year period commencing 1 January 2019 total monthly rental payments would be US$143,000 plus property taxes, maintenance and insurance.

(c) During the prior period Odyssey Industries Inc. leased this warehouse space from 1 January 2009 under a two year lease, whereby Odyssey Industries Inc. was required to make total monthly rental payments of US$30,000 plus the payment of property taxes, maintenance and insurance. Payment terms of this lease were payable within one month of invoice. Rental and lease costs were in line with market value of similar warehouse units in the surrounding area to Odyssey Industries Inc.

Related party transactions with close family of Mr Randal Bellestri

A number of close family members of Mr Randal Bellestri worked or previously worked at either Odyssey Industries Inc. or Global Tooling Systems Inc., over whom he may have been able to exert influence. Other than the transactions noted above, the only other transactions are the remuneration of each individual.

The aggregated compensation of Mr Bellestri and close family was:

	30 September 2011	30 September 2010	31 March 2011
	£'000	£'000	£'000
Salaries and short term employee benefits	49	137	271

Salaries and short term employee benefits comprise annual salary, benefits in kind, employer pension contributions and amounts accrued in respect of short term variable remuneration schemes. No members of Mr Bellestri's family were part of any post retirement defined benefit pension or healthcare schemes. No share options have been granted to Mr Bellestri or his family during the period.

Other than transactions noted above and the remuneration of each individual, there have been no other transactions with significant shareholders.

17. Related party transactions continued

Other related party transactions

During the six months ended 30 September 2011, the Company has entered into transactions with its subsidiaries in respect of internal funding loans and provision of Group services (including IT, accounting and procurement services). Recharges are made to those subsidiaries for Group services based on the utilisation of those services.

Annual management recharges are levied by the Company to subsidiaries to cover services provided, which for the half year ended 30 September 2011 amounted to £nil (half year to 30 September 2010: £nil, year ended 31 March 2011: £6,378,000). In addition to these services the Company acts as a buying agent for certain Group purchases e.g. insurance, which are recharged based on utilisation by the subsidiary.

Recharges are made to subsidiaries for Group loans based on funding provided at an interest rate linked to the prevailing base rate of the country where the undertaking is based. No recharges are made in respect of balances due to or from otherwise dormant companies. Total interest received by the Company from subsidiaries for the six months ending 30 September 2011 was £433,000 (half year to 30 September 2010: £447,000, year ended 31 March 2011: £850,000) and total interest paid by the Company to subsidiaries for the six months ending 30 September 2011 was £235,000 (half year to 30 September 2010: £133,000, year ended 31 March 2011: £296,000).

Dividends of £nil were received by the Company from subsidiaries during the six months to 30 September 2011, no dividends were paid by the Company to subsidiaries during the half year to 30 September 2011 (half year to 30 September 2010: received £3,371,000, paid £nil, year ended 31 March 2011: received £9,801,000, paid: £nil).

The amount outstanding from subsidiaries to the Company at 30 September 2011 totalled £20,276,000 (30 September 2010: £32,260,000, 31 March 2011: £31,521,000). Amounts owed to subsidiaries by the Company at 30 September 2011 totalled £18,324,000 (30 September 2010: £11,747,000, 31 March 2011: £11,472,000). The Company had no expense in respect of bad or doubtful debts of subsidiaries during the half year to 30 September 2011 (half year to 30 September 2010: £nil, year to 31 March 2011: £nil).

The Company acts as principal employer to the Group's defined benefit pension scheme, which is closed to accrual of further benefit.

18. Contingent liabilities

Multi-lateral cross-guarantees have been given by the Company and certain subsidiaries in respect of financial indebtedness under bank borrowing facilities. Contingent liabilities exist in respect of performance bonds, forward foreign exchange commitments and other guarantees which arise in the normal course of business and are not expected to give rise to any loss.

19. Other information

This statement will be posted to shareholders on or around 23 November 2011 and will be available for review at the Group's website shown below.

Group Headquarters and Registered Office

Hampson Industries PLC,

7 Harbour Buildings,

Waterfront West,

Dudley Road,

Brierley Hill,

West Midlands,

DY5 1LN.

Tel: +44 (0)1384 485345

Fax: +44 (0)1384 472962

Website: www.hampsongroup.com

Registrars and Transfer Office

Equiniti,

Aspect House,

Spencer Road,
Lancing,
West Sussex,
BN99 6DA.

Tel: +44 (0)871 384 2030

End-of-day quote London S.E. Other stock markets			5-day change	1st Jan Change
- ^GBX	-.--%		-.--%	-.--%

	1st Jan change	Capi.
HAMPSON INDUSTRIES PLC	-.--%	0
RTX CORPORATION	+23.82%	138B
GENERAL DYNAMICS CORPORATION	+15.15%	81.91B
NORTHROP GRUMMAN CORPORATION	+0.44%	69.59B
ROLLS-ROYCE HOLDINGS PLC	+39.51%	44.43B
L3HARRIS TECHNOLOGIES, INC.	+6.15%	42.41B
HINDUSTAN AERONAUTICS LIMITED	+68.71%	36.38B
RHEINMETALL AG	+78.40%	24.17B
AXON ENTERPRISE, INC.	+11.79%	21.79B
BHARAT ELECTRONICS LIMITED	+40.60%	21.78B

Hampson Industries PLC

Equities

HAMP

GB00B0P8RT68

Aerospace & Defense

Hampson Industries PLC : - Half Yearly Report

Latest news about Hampson Industries PLC

Chart Hampson Industries PLC

Company Profile

Sector Other Aerospace & Defense