Final Results

Hill & Smith Hldgs PLC 18 March 2003 Embargoed Until 7.00 am on Tuesday 18 March 2003 HILL & SMITH HOLDINGS PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 HIGHER PROFITS AND DIVIDENDS, REDUCED BORROWINGS Hill & Smith Holdings PLC ('Hill & Smith' or 'the Group') has announced substantially increased profits, a higher dividend and a significant reduction in Group borrowings. The Group has reported that profit before taxation increased to Â£6.5m compared with the previous year's Â£1.6m, calculated on an annualised pro rata basis from the prior 15 month period. On a similar basis, Group turnover increased by 10.0 per cent to Â£212.7m. Operating profit before exceptional items and goodwill amortisation rose by 11.6 per cent to Â£14.0m compared with the prior period annualised equivalent of Â£12.6m. The Board is recommending a final dividend of 2.4p a share, which means that the total dividends for the year will have effectively risen on an annualised basis by 3.2 per cent to 4.5p. Earnings per share before exceptional items and goodwill amortisation rose to 11.79p, an increase of 22.7 per cent compared with the previous period's annualised figure. Highlights Year Ended 31 Pro rata Year Ended 31 15 Months Ended 31 December 2002 December 2001 December 2001 Turnover Â£212.7m Â£193.5m Â£241.8m Operating profit + Â£14.0m Â£12.6m Â£15.7m Profit before taxation + Â£10.0m Â£8.1m Â£10.1m Profit before taxation + Â£6.5m Â£1.59m Â£1.99m Earnings per share + 11.79p 9.61p 12.01p Dividends 4.50p 4.36p 5.45p Net borrowings Â£44.9m Â£52.1m Â£52.1m + before exceptional items and goodwill amortisation + FRS3 The previous accounting period was one of 15 months ended 31 December 2001, as a result of the change during that period to a 31 December financial year end. Comparative figures above are stated both for the 15 month prior period and an annualised pro rata equivalent of 12 months. Hill & Smith's Chairman, David Winterbottom, said: 'We have delivered improved profits on increased sales as we continued to see success from our strategy of developing our building and construction businesses through organic growth and selective acquisitions. Operating margins in these businesses showed encouraging growth in the year. We have effectively increased the dividend again this year and dividend cover has improved further to 2.6 times. Gearing has also reduced substantially, leading to a corresponding reduction in interest costs. We are continuing to benefit from growing demand in infrastructure and construction markets, particularly as a result of the increased public expenditure. All the indications are that this market will continue to grow and our investment and acquisitions will help us to take advantage of opportunities in this sector. The current trading period has started in line with our expectations and if market conditions remain stable I look forward to another satisfactory performance this year.' For further information : Hill & Smith Holdings PLC: David Grove (Chief Executive) Tel 0121 704 7430 Mobile 07973 325 667 Quantum PR plc: Edward Carter Tel: 0121 633 7775 Mobile 07770 378097 Chairman's Statement General I am pleased to report another year of solid progress in 2002. Turnover at Â£212.7m was 10.0% ahead of the previous twelve months (annualised pro rata for the fifteen month accounting period to December 2001). More importantly, operating profit before exceptional items and goodwill amortisation rose to Â£14.0m representing an annualised year on year improvement of 11.6%. There was also a substantial 24.2% improvement in profit before exceptional items, goodwill amortisation and tax to Â£10.0m against the annualised figure for the fifteen month period to December 2001. The reduction in debt levels over the last two years resulted in interest charges of Â£4.0m compared with Â£4.5m annualised for the twelve month period to December 2001. Adjusted earnings per share of 11.79p for the year (9.61p annualised for the fifteen months to December 2001) represent an improvement of 22.7% year on year. Borrowings at December 2002 were Â£44.9m, representing a Â£7.2m reduction during the year. This has been achieved against the background of a continued programme of capital investment, mainly targeted at our core growth businesses. Also, two significant acquisitions were made by the Infrastructure Products Group during the year, namely Mallatite Limited and the trade and assets of Brifen Limited. The Group's stated strategy remains focussed on investing both organically and by selective acquisitions into the building and construction sectors and divesting itself of non-core activities wherever possible, details of which are given in the Operating and Financial Reviews. Dividends The Board is recommending an increase in our dividend payments with a final dividend of 2.4p, making a total for the year of 4.5p (2001: 5.45p for fifteen months), compared to an annualised figure of 4.36p in the previous period. Progress Since the Board changes in 1998 substantial progress has been made in terms of shareholder value. Adjusted earnings per share have increased by 240.8% to 11.79p (1998: 3.46p). Dividends, which were held at 4.2p between 1997 and 2000 because of the lack of dividend cover, were increased by 3.8% in 2001 and 3.2% in 2002. Dividend cover has improved each year since 1998 when it was uncovered by earnings, so that in 2002 the dividend is covered 2.6 times. Employees I would like to thank all our employees for their support and efforts during 2002. As I have said before, they are indeed our most valuable asset. Outlook We are continuing to benefit from growing demand in the infrastructure and construction markets, particularly as a result of the increased public expenditure. The current trading period has started in line with our expectations and if market conditions remain stable I look forward to another satisfactory performance this year. David Winterbottom Chairman 18 March 2003 Operational Review The operating management team has delivered a robust financial performance in 2002 by implementing the clearly defined strategy of focussing on construction, building and transport infrastructure products where we continue to identify opportunities for growth and cross-selling on major construction projects, particularly in the United Kingdom. Building and Construction Products Substantial progress was made during the year in our core Building and Construction Products activities with sales of Â£162.7m and operating profits of Â£13.3m, representing a return on sales of 8.2% compared with 7.2% in 2001. On an annualised basis adjusted operating profits in 2002 were 31.6% ahead of the comparable figure for 2001. The Infrastructure Products Group ('IPG') trades individually under various brand names - Hill & Smith (vehicle restraint systems), Berry Systems (off road highway safety barriers), Brifen (wire rope vehicle restraint systems), Varley & Gulliver (bridge parapet railings and gantries), Varioguard (temporary highway safety barriers), Barkers (security fencing), Weholite (flood water storage tanks), Mallatite (street lighting columns). This business is continuing to expand both organically and by acquisition in the safety and security products market supplying the construction industry. Demand for these products was very buoyant in 2002 resulting from increased public expenditure in the transport network in the UK. A major safety barrier contract was completed on the M2/A2 during the year and a wire rope restraint system was supplied on the new Silverstone by-pass (A43). Further investment was committed to our Varioguard rental fleet in order to supply a major project on the M8 in Scotland and the A12 at Brentford. Two strategic acquisitions were completed during the year, which further enhance IPG's product portfolio. In July we acquired the wire rope safety restraint business of Brifen. This patented system is the market leader in the UK and the product is licensed to many countries around the world. Brifen has been relocated into one of our existing manufacturing facilities, thus eliminating duplicated overheads and has been speedily integrated into IPG. We intend to expand the number of overseas licensees and we have recently entered into a new licence agreement in the USA, which further extends the worldwide application for the Brifen system. Our strategic intention to enter the lighting column market was successfully concluded in August with the acquisition of Mallatite Limited. This business is an excellent fit with the IPG portfolio and is well positioned to take advantage of the increased spending on lighting columns over the next few years. The Joseph Ash galvanising business performed well during the year despite having to absorb a 70% increase in insurance premiums. A record performance was achieved by the Bilston plant, although a few problems were experienced at two of our smaller locations due to falling demand patterns and competitive pressures. We continue to invest in our facilities across the UK in order to enhance our reputation for delivery, service and quality. Ash & Lacy Building Systems achieved a much improved performance in 2002 and clearly the rationalisation measures and management changes in 2001 have created a solid base for the future. We have identified a number of products which can be supplied to our current customer portfolio and the management is clearly focussed on organic growth in 2003. The majority of our products supply the commercial roofing market where growth is continuing albeit against the usual competitive pressures. The industrial flooring, grating and handrail business trading under the Redman Fisher, Eurogrid and Access Design brands had a difficult year with profits below the 2001 performance. Competitive pressures and a lack of large contracts were indeed challenging in 2002 and further cost reduction and rationalisation measures were incurred in the year. Birtley achieved an excellent improvement in profit albeit from a low base and against a very competitive market. The problems with the new automatic lintel line in 2001 have now been resolved and the production performance was materially improved in 2002. Although galvanised lintels is our major driver at Birtley, the smaller but complementary residential doors activity made further progress in the year. Express Reinforcements had a difficult year with a fall in selling prices early in 2002 and the demise of its major UK supplier in the middle of the year. Also, delays in some larger contracts were a challenging experience for our major production facility at Neath where the capital expenditure programme was completed during the year. The modern and updated facility can now accommodate our future product expansion plans particularly into areas of more added value. Following further investment in plant our new Rollmat product was launched in late 2002 and has been well received in the market. During the year we formed a new joint arrangement company with Laing O'Rourke for the purpose of supplying the total reinforcing bar requirements on the Terminal 5 project at Heathrow, which is due to be completed in 2008. We have a 50% share in the profits of this business, which started to make a contribution in the last quarter of 2002. Industrial Products This portfolio of businesses operates in different markets to the building and construction products companies. There are some cross-selling and sourcing opportunities but these are not significant. Overall adjusted operating profits of Â£0.7m were achieved on sales of Â£50.0m including two loss making businesses, the closures of which have since been announced. Most of the businesses in this division operate in difficult markets and our primary objective is to maximise cash flow and improve the returns on capital employed. Ash & Lacy Perforators had a satisfactory year but profits were lower than anticipated. The perforating and enclosures markets were very soft in the year and competitive pressures increased as our competitors tried to maintain volumes. Our product portfolio needs to be expanded in the future. Ash & Lacy Pressings had a difficult year against a very competitive background in the sub contract pressings market. Profits were down on the previous year but some new business was confirmed during the second half which should help an improvement in 2003. The Bromford re-rolling activity continued to concentrate its target market on specialised and niche products. In the early part of the year the assets and order books were acquired from two small competitors and this helped to improve the 2002 profitability despite significant pressure from increased raw material prices and imports. The stockholding businesses of Allely, Eden and D & J achieved a profitable outcome for the year and generated further cash from stock reduction initiatives. Trading conditions remain very depressed and there is too much capacity in the market. Pipe Supports suffered some major losses in the year, mainly in the USA, where the market deteriorated significantly. As a result of these losses and our forward view of future prospects for our US manufacturing operation, we decided in December to close this facility. The costs of closure are shown as an exceptional charge in the Accounts. Following some rationalisation and cost cutting, the UK operation has now returned to profitability. SI improved profits in 2002 and achieved a near 10% return on sales of Â£3m. This pressure instrumentation business is non-core and it was decided to market the company for sale. I am pleased to report that after the year end contracts were exchanged for the sale of this business for a sum in excess of Â£3m, which is well above the asset value. Wombwell suffered from a further deterioration in the UK iron foundry industry and the decision by a number of buyers to source castings from low cost areas abroad. Significant losses were incurred during the year although the business remained cash generative. Because of the decision by its largest customer early in 2003 to move production to Central Europe, we have since taken the decision to close this business. As explained in the Finance Director's report, this has caused us to make an impairment provision against the fixed assets in these accounts. Further exceptional closure costs will be incurred in 2003. Conclusion We believe that 2002 has been a year of solid achievement and that your group is in good shape to make further progress in the future, particularly in our building and construction products businesses. Provided the macro economic conditions of the UK do not deteriorate, we remain cautiously optimistic about prospects for the current year. David Grove Chief Executive 18 March 2003 Financial Review These results are for the period of twelve months to 31 December 2002. Because of the previous year's change in our financial year end the prior year comparative figures cover a fifteen month period. In order to give a more meaningful picture of this year's performance the 2001 comparatives shown below are pro rated from the previous period's figures. Summary of Results Despite some variable economic and market conditions and several significant cost increases, particularly in insurance and regulatory expenses, the Group achieved a satisfactory performance in 2002. Group turnover increased by 10.0% to Â£212.7m (2001: Â£193.5m) helped by a contribution from acquisitions of Â£4.3m. Excluding this effect, sales from existing businesses increased by Â£14.9m, representing underlying growth of 7.7%. However, there was a marked difference in the performances of our two divisions. Sales by our core Building and Construction Products businesses grew to Â£162.7m (2001: Â£139.9m), an increase of 16.4% of which 3.1% was due to acquisitions and 13.3% to underlying like for like growth. In contrast, sales in the Industrial Products division fell by 6.8% to Â£50.0m. Operating profits before exceptional items and goodwill amortisation grew overall by 11.6%, of which 2.4% was due to acquisitions. Operating margins in the Building and Construction Products division improved to 8.2% (2001: 7.2%), which more than offset the reduction in margins in the Industrial Products businesses. Net exceptional charges amounted to Â£1.8m. We generated Â£0.2m of gains from the sale of surplus properties and incurred charges of Â£0.4m in relation to redundancies and other costs arising from the restructuring of business acquired during the year, the major benefits of which will be gained in 2003 and beyond. In addition, we made provision for the costs of two significant restructuring actions representing in the main writedowns in the carrying value of related assets. We provided Â£1.1m for the costs of closure of our US operation, Pipe Supports USA Inc., and made an impairment provision of Â£2.2m against the fixed assets of Wombwell Foundry Limited. There were also exceptional credits of Â£1.7m relating mainly to a write back of provisions for environmental and leasehold dilapidations exposures. The closure of Pipe Supports USA Inc., our only significant overseas operation, was announced in December and should be completed by the end of April. The closure of Wombwell was announced after the year end and will lead to further one-off costs in the order of Â£1.5m, which will be provided as an exceptional item in 2003. Although in the short term these two closures will give rise to a moderate outflow of cash, in the long term the overall cash flow effect will be positive. Interest Annualised interest costs fell Â£0.5m mainly as a consequence of the lower average net borrowings, due in part to the effect of the previous year's property transactions but also to our continued strong cash flow generation. Based on operating profits before exceptional items and goodwill amortisation interest cover increased to 3.5 times (2001: 2.8 times). Taxation The effective tax rate on profits before exceptional items and goodwill amortisation at 28.0% was lower than the standard rate primarily as a result of adjustments in respect of prior years. The effective tax rate on the exceptional items was only 12.3% because we are unable to obtain relief on the losses arising from the closure of Pipe Supports USA Inc. Earnings Per Share Excluding the effects of exceptional items and goodwill amortisation, earnings per share amounted to 11.79p. This represents an increase of 22.7% over the last financial year's annualised equivalent of 9.61p. We believe this adjusted measurement of earnings provides a more meaningful view of the Group's underlying financial performance. When combined with the previous year's comparable increase of 26.0%, adjusted earnings per share have increased by 54.5% over the last two financial periods since the takeover of Ash & Lacy Plc. Dividends The proposed dividends for the year amount to 4.5p, a 3.2% increase over last year's annualised figure. Based on earnings before exceptional items and goodwill amortisation dividend cover increased to 2.6 times (2001: 2.2 times). Cash Flow and Borrowings Despite significant further capital investment and acquisition activity in the year, we achieved a further reduction in our year end net borrowings from Â£52.1m to Â£44.9m. Year end gearing was 125% (2001: 152%). Net operating cash flow amounted to Â£26.1m. Stocks and creditors increased significantly as several of our businesses bought in steel stock towards the year end ahead of announced price rises. We also benefited from some one-off factors including Â£4.5m of advance payments received in connection with our new Terminal 5 Joint Venture and special extended supplier payment terms. During the year we spent a total of Â£6.7m on acquisitions (including Â£1.7m of debt acquired) all but Â£0.4m of which was financed via our existing borrowing facilities. The most significant acquisition was that of Mallatite Limited, one of the UK's leading manufacturers of street lighting columns. We also acquired the business of Brifen Limited, a manufacturer of wire rope vehicle restraint systems. Pensions Mainly as a result of the major falls in equity stock markets, our funding position on an FRS17 basis deteriorated during the year, although the impact was mitigated by our relatively high proportion of bond and bond-like investments, which sheltered us from some of the decrease in capital values. At 31 December 2002 there was a gross deficit of Â£3.7m. Chris Burr Finance Director 18 March 2003 Consolidated Profit and Loss Account For the year ended 31 December 2002 Year ended 31 December 2002 15 months ended 31 December 2001 Notes Before Exceptional Goodwill Total Before Exceptional Goodwill Total exceptional items amortisation Â£000 exceptional items amortisation Â£000 items Â£000 items and Â£000 and Â£000 goodwill Â£000 goodwill amortisation amortisation Â£000 Â£000 Turnover 1 Continuing operations: Existing 208,400 - - 208,400 241,849 - - 241,849 operations Acquisitions 4,340 - - 4,340 - - - - ---------- --------- ---------- --------- ----------- --------- ----------- ---------- Total 212,740 - - 212,740 241,849 - - 241,849 turnover ======= ======= ======= ======= ======= ======= ======= ======= Operating 1 profit Continuing operations Existing 13,704 (528) (1,521) 11,655 15,696 (6,387) (1,786) 7,523 operations Acquisitions 304 (388) (223) (307) - - - - ---------- --------- ---------- --------- ----------- --------- ----------- ---------- Total 14,008 (916) (1,744) 11,348 15,696 (6,387) (1,786) 7,523 operating profit ======= ======= ======= ======= ======= ======= ======= ======= Loss on - - - - - (1,106) - (1,106) sale of businesses Profit on - 223 - 223 - 1,179 - 1,179 sale of fixed assets Provision - (1,098) - (1,098) - - - - for loss on termination of operation ---------- --------- ---------- --------- ----------- --------- ----------- ---------- Profit on 1 14,008 (1,791) (1,744) 10,473 15,696 (6,314) (1,786) 7,596 ordinary activities before interest Net (3,989) - - (3,989) (5,611) - - (5,611) interest payable ---------- --------- ---------- --------- ----------- --------- ----------- ---------- Profit on 10,019 (1,791) (1,744) 6,484 10,085 (6,314) (1,786) 1,985 ordinary activities before taxation Tax on 2 (2,809) 221 45 (2,543) (2,933) 1,997 - (936) profit ---------- --------- ---------- --------- ----------- --------- ----------- ---------- Profit on 7,210 (1,570) (1,699) 3,941 7,152 (4,317) (1,786) 1,049 ordinary activities after taxation Minority 3 - - 3 (11) - - (11) interests ---------- --------- ---------- --------- ----------- --------- ----------- ---------- Profit 7,213 (1,570) (1,699) 3,944 7,141 (4,317) (1,786) 1,038 for the period ======= ======= ======= ======= ======= ======= Dividends (2,760) (3,792) --------- ---------- Retained 1,184 (2,754) profit / (loss) for the period ======= ======= Earnings 3 11.79p (2.57p) (2.77p) 6.45p* 12.01p (7.26p) (3.00p) 1.75p* per share Diluted 3 11.75p (2.56p) (2.77p) 6.42p* 11.98p (7.24p) (3.00p) 1.74p* earnings per share * FRS 3 Consolidated Balance Sheet As at 31 December 2002 31 December 31 December 2002 2001 Â£000 Â£000 Fixed assets Intangible assets 30,350 28,248 Tangible assets 42,748 44,399 Investments 125 225 ---------- ---------- 73,223 72,872 Current assets Properties held for resale 1,365 - Stocks 23,410 16,785 Debtors: due after one year 6,183 5,526 Debtors: due within one year 49,562 48,997 ---------- ---------- 55,745 54,523 Cash and deposits 12,811 4,664 ---------- ---------- 93,331 75,972 Creditors: amounts falling due within one year Borrowings and finance leases (10,377) (15,744) Other creditors (65,774) (49,990) ---------- ---------- (76,151) (65,734) Net current assets 17,180 10,238 Total assets less current liabilities 90,403 83,110 Creditors: amounts falling due after one year Borrowings and finance leases (47,304) (41,056) Provisions for liabilities and charges (7,208) (7,660) ---------- ---------- Net assets 35,891 34,394 ====== ====== Share capital and reserves Called up share capital 15,391 15,245 Share premium 3,367 3,338 Capital redemption reserve 238 238 Revaluation reserve 733 733 Other reserves 4,313 4,088 Profit and loss account 11,806 10,706 Equity shareholders' funds 35,848 34,348 ---------- ---------- Equity minority interests 43 46 ---------- ---------- 35,891 34,394 ====== ====== Group Cash Flow Statement For the Year Ended 31 December 2002 Notes Year ended 31 15 Months Ended December 2002 31 December 2001 Â£000 Â£000 Net cash flow from operating activities 4a 26,145 25,189 Returns on investments and servicing of 4b (4,383) (5,005) finance Taxation (432) (1,469) Capital expenditure and financial 4c (5,545) 6,517 investment Acquisitions and disposals 4d (5,455) (72,355) Equity dividends paid (2,044) (3,370) ---------- ---------- Cash flow before financing 8,286 (50,493) Financing Issue of new shares 49 5,874 Loan advances 5,976 67,500 Loan repayments (6,423) (15,349) Redemption of loan notes (341) (28) Proceeds from new finance leases secured 1,126 - on existing assets Repayments of capital element of finance (526) (381) leases ---------- ---------- (139) 57,616 ---------- ---------- Increase in cash in the period 8,147 7,123 ====== ====== Reconciliation of net cash flow to movement in net debt Increase in cash 8,147 7,123 Cash (inflow) / outflow from borrowings 188 (51,742) ---------- ---------- Change in net debt resulting from cash 8,335 (44,619) flows New finance leases (180) (1,169) Loan notes issued as part of acquisition (889) (1,759) ---------- ---------- Movement in net debt in the period 7,266 (47,547) ---------- ---------- Net debt at the start of the period 4e (52,136) (4,589) ---------- ---------- Net debt at the end of the period 4e (44,870) (52,136) ====== ====== Consolidated Statement of Total Recognised Gains and Losses For the Year Ended 31 December 2002 Year ended 31 15 Months ended 31 December 2002 December 2001 Â£000 Â£000 Profit for the period 3,944 1,038 Unrealised deficit on revaluation of properties - (146) Currency translation differences on overseas net (84) - investments ---------- ---------- Total recognised gains and losses relating to the period 3,860 892 ====== ====== Note of Consolidated Historical Cost Profits and Losses For the Year Ended 31 December 2002 There is no material difference between the results as shown in the profit and loss account and their historical cost equivalent. Reconciliation of Movement in Group Shareholders' Funds For the Year Ended 31 December 2002 Year ended 31 15 Months ended 31 December 2002 December 2001 Â£000 Â£000 Profit for the period 3,944 1,038 Dividends (2,760) (3,792) ---------- ---------- 1,184 (2,754) Goodwill previously written off to reserves - 387 Other recognised net gains and losses relating to the (84) (146) period New ordinary share capital issued 400 12,882 ---------- ---------- Net increase in shareholders' funds 1,500 10,369 Opening shareholders' funds 34,348 23,979 ---------- ---------- Shareholders' funds at the end of the period 35,848 34,348 ====== ====== Notes to the Financial Statements 1 Segmental Information Year ended 31 December 2002 15 Months ended 31 December 2001 Turnover Operating Profit Net Turnover Operating Profit Net assets Â£000 profit* before assets Â£000 profit* before Â£000 Â£000 interest Â£000 Â£000 interest and tax and tax Â£000 Â£000 Building and Construction Products Continuing operations: Existing 158,403 13,001 12,324 35,725 174,826 12,640 5,264 40,996 operations Acquisitions 4,340 304 (149) 2,411 - - - - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total 162,743 13,305 12,175 38,136 174,826 12,640 5,264 40,996 ====== ====== ====== ====== ====== ====== ====== ====== Industrial Products Continuing operations: Existing 49,997 703 (1,544) 18,475 67,023 3,056 2,332 22,198 operations Acquisitions - - (158) - - - - - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total 49,997 703 (1,702) 18,475 67,023 3,056 2,332 22,198 ====== ====== ====== ====== ====== ====== ====== ====== Total operations Continuing operations: Existing 208,400 13,704 10,780 54,200 241,849 15,696 7,596 63,194 operations Acquisitions 4,340 304 (307) 2,411 - - - - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total 212,740 14,008 10,473 56,611 241,849 15,696 7,596 63,194 ====== ====== ====== ====== ====== ====== ====== ====== Tax and (8,939) (6,003) dividends Long term 2,739 1,091 debtors and other provisions Net (44,870) (52,136) borrowings Goodwill 30,350 28,248 --------- ---------- Total 35,891 34,394 Group ====== ====== By geographical origin UK 209,230 14,072 10,524 35,203 237,643 15,696 7,602 33,537 Rest of 3,510 (64) (51) 688 4,206 - (6) 857 World ---------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- Total 212,740 14,008 10,473 35,891 241,849 15,696 7,596 34,394 ====== ====== ====== ====== ====== ====== ====== ====== Turnover by geographical destination UK 192,428 217,577 Rest of 10,818 9,907 Europe Asia 3,008 3,155 USA 4,243 8,434 Rest of 2,243 2,776 World ---------- ---------- Total 212,740 241,849 ====== ====== * Operating profit is stated before exceptional items and goodwill amortisation. 2 Taxation on profit on ordinary activities Year ended 31 15 Months ended 31 December 2002 December 2001 Â£000 Â£000 UK corporation tax on profits of the period 2,330 424 Adjustments in respect of prior periods (250) (195) Foreign tax 33 - --------- ---------- 2,113 229 Deferred taxation: origination and reversal of timing differences Current period 514 707 Adjustments in respect of prior periods (84) - ---------- ---------- 2,543 936 ====== ====== 3 Earnings per share The weighted average number of shares in issue during the period was 61,157,774 (2001: 59,481,873), diluted for the effects of outstanding share options 61,399,912 (2001: 59,592,569). Earnings per share have been calculated on earnings of Â£3,944,000 (2001: Â£1,038,000) and earnings per share before exceptional items and goodwill amortisation on earnings of Â£7,213,000 (2001: Â£7,141,000). Earnings per share before exceptional items and goodwill amortisation have been shown because the Directors consider that this gives a more meaningful indication of the underlying performance of the Group. 4 Notes to the Cash Flow Statement Year ended 15 Months ended 31 December 2002 31 December 2001 Before exceptional Exceptional Total Total items and items and Â£000 Â£000 goodwill goodwill amortisation amortisation Â£000 Â£000 (a) Reconciliation of operating profit to net cash inflow from operating activities Operating 14,008 (2,660) 11,348 7,523 profit Income on - - - (805) investment properties Depreciation 5,993 2,092 8,085 7,225 Amortisation - 1,744 1,744 1,786 of goodwill Payments on - (193) (193) - the termination of business (Profit) on (64) - (64) (81) sale of fixed assets Change in working capital: Stocks (4,654) (42) (4,696) 3,998 Debtors (299) - (299) 7,408 Creditors 9,260 960 10,220 (1,865) and provisions ---------- ---------- ---------- ---------- 4,307 918 5,225 9,541 ---------- ---------- ---------- --------- - Net cash 24,244 1,901 26,145 25,189 inflow from operating activities ====== ====== ====== ====== (b) Returns on investments and servicing of finance Rents - 779 received Interest 211 194 received Interest (4,509) (5,916) paid Interest (85) (62) element of finance lease rentals ---------- --------- (4,383) (5,005) ====== ====== (c) Capital expenditure and financial investment Purchase of (7,146) (9,063) fixed assets Sale of 1,601 15,580 fixed assets ---------- --------- (5,545) 6,517 ====== ====== (d) Acquisitions and disposals Purchase of (3,781) (63,489) subsidiary undertakings and businesses Sale of - 661 businesses (net of disposal costs) Net (1,674) (9,527) overdraft acquired ---------- --------- (5,455) (72,355) ====== ====== (e) Analysis of net debt 31 December 2001 Cash Flow Other non-cash 31 Â£000 Â£000 changes December Â£000 2002 Â£000 Cash at 4,664 8,147 - 12,811 bank and in hand Debt due (15,417) (977) 6,611 (9,783) within one year Debt due (39,840) 1,765 (7,500) (45,575) after one year Finance (1,543) (600) (180) (2,323) leases ---------- ---------- ---------- --------- Net debt (52,136) 8,335 (1,069) (44,870) ====== ====== ====== ====== Notes 1 The proposed final dividend will be paid on 8 July 2003 to shareholders on the register on 6 June 2003 (ex-dividend date 4 June 2003). 2 The financial information set out in this preliminary announcement does not constitute the company's statutory accounts for the year ended 31 December 2002 or the period ended 31 December 2001. Statutory accounts for 2001 have been delivered to the Registrar of Companies and those for 2002 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. 3 The annual report will be posted to shareholders on 14 April 2003, and will be available from the registered office at 2 Highlands Court, Cranmore Avenue, Shirley, B90 4LE. 4 The Annual General Meeting will be held at The National Motorcycle Museum, Solihull at 10.30 hours on Tuesday 20 May 2003. Financial calendar: Annual General Meeting 20 May 2003 Payment of proposed final dividend 8 July 2003 Interim results announcement for the period to 30 June 2003 September 2003 Payment of interim dividend January 2004 5 This preliminary announcement of results for the period ended 31 December 2002 was approved by the Directors on 18 March 2003. This information is provided by RNS The company news service from the London Stock Exchange ROAAR

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