Associated British Engineering : ABE Announcement re Results to 31 March 2018

Company Registration No. 00110663 (England and Wales)

ASSOCIATED BRITISH ENGINEERING PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED

31 March 2018

ASSOCIATED BRITISH ENGINEERING PLC	Company Registration No. 00110663 (England and Wales)
REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2018
CONTENTS	Page
Financial highlights	1
Chairmen'sstatement	2
Directors' report	3
Strategic report	7
Report of the independent auditor - Group	11
Group accounting policies	16
Consolidated income statement	23
Consolidated statement of comprehensive income	24
Group statement of financial position	25
Group statement of changes in equity	26
Group cash flow statement	27
Notes to the Group financial statements	28
Company statement of financial position	44
Company statement of changes in equity	45
Company cash flow statement	46
Notes to the Company financial statements	47
Statement of directors' responsibilities	53
Corporate governance report	54
Directors'remuneration report	60
Directors, registered office and advisers	63

The Directors' Report on pages3 to 6and the Directors' Remuneration Report on pages60 to 62 have each been drawn up in accordance with the requirements of English law and liability in respect thereof is also governed by English law. In particular, the responsibility of the directors for these reports is owed solely to Associated British Engineering plc.

The directors submit to the members their Report and Accounts for the Group for the period ended 31 March 2018. Pages 1 to 10 and 53 to 62, including the Financial Highlights, Chairmen's Statement, Directors' Report, Strategic Report, Corporate Governance Report, Directors' Remuneration Report and the Directors, RegisteredOffice and Advisers page form part of the Report of the Directors.

FINANCIAL HIGHLIGHTS

2018	2017
£'000	£'000
REVENUE	1,603	1,043
OPERATING LOSS	(525)	(906)
LOSS BEFORE TAXATION	(582)	(962)
NET ASSETS	976	1,020
BASIC LOSS PER 2.5p ORDINARY SHARE	(20.6p)	(46.8p)
EQUITY SHAREHOLDERS' FUNDS PER 2.5p ORDINARY SHARE	£0.48	£0.50
1

CHAIRMEN'S STATEMENT

FOR THE PERIOD ENDED 31 MARCH 2018

The changes we spoke about in 2017 have continued and as yet our business servicing the oil sector in the North Sea has not recovered and returned to previous levels. The loss for the period has decreased from £960,000 to £422,000 and some of this loss has been caused by the continued development of the new series of diesel engines that we have now started to sell. The disputes we spoke of in our last statement remain unresolved and continue to take up management time.

British Polar Engines Ltd (BPE), our principal subsidiary, continues to strive for new service and spares customers to compensate for the downturn in activity in the North Sea. BPE remains confident that over time they will be able to replace and exceed the lost sales and return the company to profitability. While we have to reluctantly acknowledge that this may take some time we remain confident that our products are competitive in price and value terms. BPE continues to address staffing issues, which are a necessary component of thechanges required. BPE's managing director Bill Girdwood was taken ill last year and was absent for manycritical months finally resigning in January this year. Rupert Pearce Gould, the Chairman of BPE, and the other senior staff are covering the gap, whilst the BPE Board is actively seeking further strengthening of the management team.

The Board continues to keep central costs under tight control. However at the operating level BPE has continued to recruit new staff to replace the retiring staff and re-structure middle management for the changed environment using the downturn to take on qualified staff. We have also continued to look at our sales processes and relatedKPI's with a view to improving sales efficiency. In summary we are building a base forthe future and we are beginning to notice some positive responses in our established markets.

As we have often commentated we continue to suffer from the vagaries of pension valuations in BPE. The number of active members continues to decline and the match between liability and bond markets is difficult to achieve; this means that we still experience swings in the net valuation. The net result is that the IAS 19 Pension Valuation still moves around and if the £ Sterling falls we may find a positive movement and vice a versa. In the current period the pension deficit for BPE has decreased from £1,380,000 to £1,354,000 as at 31 March 2018. Shareholders will appreciate that the calculations surrounding these figures result from a combination of facts and assumptions which are set out in much more detail in the notes to these accounts. Following the end of the year the directors of BPE agreed with the trustees of the pension fund that in order to conserve cash within the business they would agree to the suspension of the deficit repayment agreement for the year ending March 2019. This agreement also includes the company compensating the pension fund in respect to its contribution to the pension protection Fund. This agreement will be reviewed at the end of the accounting period March 2019. The directors of BPE and the trustees of the pension fund are also actively looking at ways to reduce the running costs of the pension fund that is now disproportionate to the number of members the fund has.

In addition to the organic opportunities, we remain open to the thought of a suitable corporate transaction to expand the Group; but accept that this may be difficult to find in current markets. Our other investments continue to show an increase over costs and generate useful increases in value from our latent resources.

As a small group we are reliant on the dedication of all our staff who despite the reduced activity are working well and looking hard at each and every opportunity. The Board thanks them all for their effort and commitment.

Rupert Pearce Gould and Colin Weinberg

Chairmen

Date: 30 July 2018

DIRECTORS' REPORT

FOR THE PERIOD ENDED 31 MARCH 2018

The directors submit their report and audited accounts for the period ended 31 March 2018.

RESULTS AND DIVIDENDS

The Group's loss after tax amounted to £422,000 (2017: £960,000). The directors are unable to recommend a dividend on the ordinary shares for the period (2017: £nil per ordinary share).

DIRECTORS

The names of the directors who served during the period from 4 April 2017 to 31 March 2018 are:

Mr C Weinberg

Mr R Pearce GouldDirector DirectorBiographical details of the directors are set out on page 63.

With regard to the appointment and replacement of directors, the Company is governed by its Articles of Association, the Corporate Governance Code, the Companies Act 2006 and related legislation.

In accordance with the Articles of Association Mr C Weinberg retires by rotation and, being eligible, offers himself for re-election.

SUBSTANTIAL HOLDINGS

As at 30 July 2018 and at 31 March 2018 the Company had been notified of the following substantial interests, in excess of 3%, in the issued ordinary share capital of the Company:

Shareholders

Notes

W B Nominees Limited

W B Nominees Limited owns 23.82% of issued ordinary shares.

Fiske Nominees Limited (FISKPOOL)

FISKPOOL owns 14.33% of issued ordinary shares.

R A Pearce GouldC WeinbergRulegale Nominees Limited (JAMSCLT)Hargreaves Lansdown (Nominees) Limited (HLNOM)

Mr Pearce Gould'sdirect holding is 7.61% of issued ordinary shares.

Mr Weinberg's direct holding is 7.88% ofissued ordinary shares.

JAMSCLT owns 5.28% of which MrR A Pearce Gould'shas all of the issued ordinary shares.

HLNOM owns 4.98% of issued ordinary shares.

Lynchwood Nominees Limited (DMOD)DMOD owns 4.20% of issued ordinary shares.

Barclayshare Nominees Ltd

Barclayshare Nominees Ltd owns 3.67% of issued shares.

Vidacos Nominees Limited (BBUCCC)BBUCCC owns 3.40% of issued ordinary shares.

HSBC Global Custody Nominee UK Limited (941346)

Made up of multiple interested parties of which 3.06% of issued ordinary shares are owned.