Final Results
Hill & Smith Hldgs PLC
09 March 2005
Preliminary Results for the year ended 31 December 2004
Hill & Smith Holdings PLC ('the Group') has announced record profits and
turnover and a substantial increase in dividends.
The Group has reported that profit before taxation rose by 35.7% to £8.4
million. Adjusted profits before taxation, exceptional items and goodwill
amortisation grew by 30.1% to £11.8 million.
Adjusted earnings per share increased by 27.8% to 13.66p (2003: 10.69p).
The proposed final dividend is 2.75p (2003: 2.45p) resulting in total dividends
for the year of 5.00p (2003: 4.60p). The dividend is covered by adjusted
earnings 2.7 times (2003: 2.3 times).
Highlights
Year ended Year ended
31 December 2004 31 December 2003
++
Turnover £268.7m £241.7m
Profit before taxation £8.4m £6.2m
Adjusted profit before taxation+ £11.8m £9.1m
Dividend per share 5.0p 4.6p
Earnings per share - adjusted+ 13.66p 10.69p
Earnings per share - FRS 3 9.85p 7.04p
+ before exceptional items and goodwill amortisation.
++ restated to take account of the adoption of FRS 17.
The Group's culture of innovation and its strategy of investing in its key
businesses, where markets continue to be strong, have led to the further
improvements in profitability. The record results have been achieved despite
higher steel prices, which affected several of the Group's products.
The Building and Construction Products division increased its adjusted operating
profit by 17.0% in the year contributing 90.3% of the Group total.
Progress is being made in the integration of the Lionweld Kennedy businesses
which it acquired during the year. This acquisition is likely to bring
substantial benefits in the future.
Chairman David Winterbottom said: 'Our infrastructure products businesses
continue to benefit from public expenditure programmes, especially those related
to improved health and safety requirements, security and the reduction of road
congestion.
'Further expenditure in these areas, particularly relating to roads, has been
well signposted by Government agencies and should stimulate further demand for
our products and services in the future.
'The current year trading period has started in line with our expectations and,
subject to market conditions remaining favourable, I look forward to another
satisfactory performance in 2005'.
Ends
Further information:
Hill & Smith Holdings PLC
David Grove - Chief Executive
0121 704 7430
07973 325667
Quantum PR plc
Edward Carter
0121 633 7775
07770 378097
Chairman's Statement
General
The Group made further substantial progress in 2004, achieving record profits
and further increasing the scope and strength of its operations.
Turnover increased by 11.2% to £268.7 million. Operating profit before
exceptional items and goodwill amortisation was £15.1 million which represents a
19.8% improvement on the previous year (2003: £12.6 million) where the figures
have been restated to take account of the adoption of FRS17. Profit before
taxation increased from £6.2 million to £8.4 million, an increase of 35.7%.
Despite the higher interest rates during the year, profit before exceptional
items and goodwill amortisation increased by 30.1% to £11.8 million (2003:
£9.1 million). Adjusted earnings per share grew by 27.8% to 13.66p (2003:
10.69p).
Operations
We continued our strategy of investing in our growing businesses, where we
believe there are many opportunities for margin enhancement, cost reduction and
new product development. The success of this strategy and the culture of
innovation we have encouraged throughout the Group are clearly demonstrated by
the year's substantial increase in profits.
The Building and Construction Products division contributed 90.3% of our year's
operating profit and it continues to be our main focus for investment and future
growth. Operating profits of £13.6 million were 17.0% higher than 2003. We
continue to benefit from public expenditure programmes, especially those related
to improved health and safety requirements, security and the reduction of road
congestion. Further expenditure in these areas, particularly relating to roads,
has been well signposted by Government agencies which should stimulate further
demand for our products and services in the future.
The Industrial Products division continues to operate under a tight regime and
the active management of these businesses resulted in a much improved level of
profitability and cash generation during the year.
The majority of the Group's products are steel based and during 2004 we were
able to achieve our profit improvement and maintain our supplier-customer
partnerships and service despite substantially higher raw material prices and
even some material shortages.
Dividends
Since 2001 we have maintained a progressive dividend policy whilst increasing
dividend cover. In line with this policy, your Board is recommending a final
dividend of 2.75p per share (2003: 2.45p) subject to shareholders' approval,
making a total for the year of 5.0p per share (2003: 4.6p) which is covered 2.7
times by adjusted earnings (2003: 2.3 times).
Acquisition
In October we acquired the principal operations of Lionweld Kennedy Limited
which were complementary to several of our existing businesses and gave us
additional manufacturing capacity and geographic spread. Although it had no
material impact on the year's results, we are confident this acquisition will
provide more substantial revenue and profit benefits in the future.
Employees
I would like to thank all our employees for their dedicated contributions in
providing and maintaining our high quality product portfolio and in giving our
customers a premium service which have helped to sustain the momentum of
profitability across our Group.
Outlook
We will continue to invest both organically and, where appropriate, by
acquisition. We will concentrate on further strengthening our core businesses
and on improving our product offering into our major markets. The current
trading period has started in line with our expectations and, subject to market
conditions remaining favourable, I look forward to another satisfactory
performance in 2005.
David Winterbottom
Chairman
9th March 2005
Operational Review
The significant advance in profitability in 2004 vindicates our investment
strategy in recent years. This consists of an ongoing new or improved product
development programme in markets where we have leading positions and where there
is strong customer demand. Our management teams are focused on delivering
further developments in the future and it is part of our management culture that
we are the innovators in the majority of markets we supply. Furthermore, we are
continually investing in new equipment to improve efficiencies and reduce our
unit costs of production. We are confident that our programme for organic growth
will continue to deliver commensurate returns for shareholders. Acquisitions
will continue to be made where appropriate to complement the underlying growth
of our business units.
Against a background of rising prices and supply chain shortages, our business
units worked hard with our suppliers and customers to ensure that there was no
disruption to customer deliveries. I have to congratulate our management teams
for responding to the challenge in an innovative and professional manner.
Building and Construction Products
Turnover increased by 12.3% in 2004 to £229.8 million (2003: £204.7million), due
in part to the effect of the significant steel price increases we experienced
during the year. Adjusted operating profit increased by 17.0% in 2004 to £13.6
million (2003: £11.6 million). Hill & Smith Limited and its related companies in
the road infrastructure and security markets increased their contribution to
Group profits despite some margin pressures as we continued to sell on the basis
of quality and service. Further investment was made during the year expanding
our hire fleet of Varioguard temporary crash barrier, which is utilised in
protecting workzones across the road networks in the UK, where we are market
leader.
Our product development programme continues to provide our customers with
enhanced value solutions and we are ahead of schedule in developing a broad
portfolio of vehicle restraint systems which comply with the new regulatory
standards which are to be introduced in the near future. The Highways Agency has
been charged by the Government to reduce the number of deaths and serious
injuries on UK roads by 40% over the next five years. Our expanding product
portfolio is providing hardware which will assist in achieving this objective.
Government spending in the areas of road health and safety, both in terms of
travellers, traffic management personnel and contractors, plus expenditure on
security and the reduction of congestion continues to run well ahead of the
growth in GDP.
In our steel reinforcement operations we are working with our construction
industry partners to provide more off-site fabrication in order to improve their
supply chain productivity and increase the value added content and profitability
of our sales. We believe this development will secure a new competitive
advantage for us as the sales revenues generated by the Heathrow Airport
Terminal 5 Joint Venture reduce in line with expectations as the project nears
completion.
Redman Fisher Engineering was the subject of management changes and
restructuring in 2003 and the new senior management team produced a much more
robust performance. Their business will be further strengthened by the addition
of the well known Lionweld Kennedy brand which we acquired towards the end of
the year.
Following the significant start up costs of our new Ashzip standing seam product
range in 2003, Ash & Lacy Building Systems achieved substantial increases of
both sales and profits in 2004 on the back of favourable market conditions.
Thanks to our modern production facilities, in which we have invested heavily in
recent years, our Joseph Ash galvanizing and Birtley Building Products lintels
operations both made good contributions to Group results. This was despite
lively competition in the market place and our continuing drive towards lower
operating costs, which led to our decision to close the Southampton factory of
Joseph Ash.
Industrial Products
Sales last year were 4.9% ahead of the previous year at £38.8 million (2003:
£37.0 million). Operating profits at £1.5 million were 53.2% ahead (2003: £1.0
million). In general, across the businesses in this division, market conditions
remain challenging and the profit improvement in the year resulted mainly from
cost reduction and value added efficiency gains. Our Pipe Supports operation
expanded its activities with the construction of a new factory in Thailand.
Conclusion
We will continue to expand our core businesses supplying the infrastructure,
building and construction industries with niche products, innovative solutions
and excellent service to maintain our market leadership. With rising raw
material and energy costs we are increasingly outsourcing the manufacture of the
high labour content commodity type components of our product portfolio. This
will release our skilled people to concentrate on higher value added products
and make further developments to our product range. Management and employees
throughout the Group remain highly motivated and focused on achieving the
Group's objectives.
David Grove
Chief Executive
9 March 2005
Financial Review
Summary of Results
The year's results were the best ever recorded by the Company and were achieved
against a background of substantial increases in world commodity prices,
particularly steel. Steel is our most important raw material and our ability to
handle the supply situation was fundamental to our trading success in the year.
These higher raw material prices were a significant factor affecting our sales,
cost of sales and working capital. Underlying volumes were broadly similar to
last year. With relatively modest increases in wages and other overheads
adjusted operating profit increased strongly. Sales, profits, earnings per share
and operating cash flow were all at record levels.
The results cover the twelve months to 31 December 2004. They include the first
two months' trading of the Lionweld Kennedy operations which we acquired at the
end of October 2004. The prior year numbers include small contributions from the
SI Pressure Instruments and Wombwell Foundry businesses which were discontinued
in 2003.
The financial statements include the effects of the adoption for the first time
of FRS 17: Retirement Benefits, the accounting standard dealing with pension
costs. The prior year comparatives have been restated accordingly.
Sales and Operating Profit
Group turnover increased by 11.2% to £268.7 million (2003: £241.7 million).
Excluding acquisitions and the prior year disposals, like-for-like sales growth
was 11.5% in both divisions. Within the Building and Construction Products
division, sales by our Joint Venture with Laing O'Rourke reduced in line with
expectations as its Heathrow Terminal 5 contract progressed. However, higher
sales at Express Reinforcements more than offset this with the result that sales
of reinforcing products grew overall. Several other companies in this division
increased sales, in particular Ash & Lacy Building Systems, Barkers Engineering
and Varley & Gulliver which all recorded record sales with year on year
increases of more than 25%. The main growth in sales in the Industrial Products
division came from Bromford Iron & Steel and W&S Allely.
Operating margins in the Building and Construction Products division were
maintained and grew strongly in the Industrial Products division where Bromford
Iron & Steel and Ash & Lacy Perforators both had a much improved year. Group
adjusted operating profit increased by 19.8% to £15.1 million.
Net exceptional charges amounted to £1.7million. These related in the main to
the cost of business reorganisations at Joseph Ash, where we closed the
Southampton factory, and at the Industrial Flooring companies, including the
costs of integrating the newly acquired Lionweld Kennedy operations. They also
include £0.4 million (£0.1 million credit after tax) in respect of costs
associated with share option gains.
Interest
Net interest costs were unchanged at £3.8 million, the slightly lower average
borrowings offsetting the increase in general market rates. Adjusted net
interest cover improved to 4.0 times (2003: 3.4 times).
Profit before tax
After crediting £0.5 million of FRS 17 related other finance income, adjusted
pretax profit rose by 30.1% to a record £11.8 million (2003: £9.1 million).
Taxation
The effective tax rate on profits before exceptional items and goodwill
amortisation was 28.2% compared to the standard rate of 30%, mainly as a result
of the benefit of industrial buildings allowances which were no longer subject
to clawback.
Earnings per share
Adjusted earnings per share before exceptional items and goodwill amortisation
amounted to 13.66p, an increase of 27.8% compared to last year and the highest
ever achieved by the Group.
Dividends
In line with our progressive dividend policy, we again propose to increase the
level of the distribution to shareholders. The recommended final dividend,
together with the interim dividend already paid, makes a total for the year of
5.0p per share, an increase of 8.7% from last year. Based on adjusted earnings,
this level of dividend is covered 2.7 times (2003: 2.3 times).
Financing
Year end net borrowings increased slightly to £37.9 million (2003: £36.5
million). The balance sheet position was affected by the £2.5 million cash
acquisition of the Lionweld Kennedy operations towards the end of the year and
by a £3.0 million decrease during the year in the level of advance payments
received in connection with our Terminal 5 Joint Venture.
Despite the large increase in turnover, we restricted the increase in working
capital. We also maintained our vigorous programme of capital expenditure,
investing a total of £8.0 million, £2.4 million in excess of the depreciation
charge.
Year end net assets increased to £31.3 million (2003: £30.8 million).
Pensions
There was an increase of £2.1 million in the FRS 17 net pension liability.
Although investment returns exceeded expectations, improved mortality rates
increased liabilities by a greater amount, in line with the experience of most
other company occupational pension schemes.
International Financial Reporting Standards
European listed groups are required to adopt International Financial Reporting
Standards ('IFRS') for their financial statements from 2005, including
comparative information for 2004. Although the Group has not yet finalised its
assessment of the effects of the adoption of IFRS, it currently believes there
will be no material impact on its reported adjusted earnings or cash flow and
that the principal other changes will be restricted to the costs of share-based
payments such as share option grants, the non-amortisation of goodwill and the
non-accrual of the proposed final dividend.
Chris Burr
Finance Director
9th March 2005
Group Profit and Loss Account
For the year ended 31 December 2004
Year ended 31 December 2004 Year ended 31 December 2003 (Restated)
Before Before
exceptional exceptional
items and items and
goodwill Exceptional Goodwill goodwill Exceptional Goodwill
amortisation items amortisation Total amortisation items amortisation Total
£000 £000 £000 £000 £000 £000 £000 £000
Notes (see note 2)
Turnover
Continuing
operations:
Existing
operations 266,935 - - 266,935 241,665 - - 241,665
Acquisitions 1,717 - - 1,717 - - - -
-------- -------- -------- -------- -------- -------- -------- --------
Total
Turnover 1 268,652 - - 268,652 241,665 - - 241,665
======== ======== ======== ======== ======== ======== ======== ========
Operating Profit
Continuing
operations:
Existing
operations 15,105 (1,616) (1,674) 11,815 12,592 (5) (1,630) 10,957
Acquisitions (21) (268) - (289) - - - -
-------- -------- -------- -------- -------- -------- -------- --------
Operating
Profit 1 15,084 (1,884) (1,674) 11,526 12,592 (5) (1,630) 10,957
======== ======== ======== ======== ======== ======== ======== ========
Profit on sale
of businesses - - - - - 540 - 540
Profit on sale
of properties - 187 - 187 - 85 - 85
Loss on
termination of
operations - - - - - (1,851) - (1,851)
-------- -------- -------- -------- -------- -------- -------- --------
Profit on
ordinary
activities
before
interest 1 15,084 (1,697) (1,674) 11,713 12,592 (1,231) (1,630) 9,731
Net interest
payable (3,779) - - (3,779) (3,755) - - (3,755)
Other finance
income 502 - - 502 239 - - 239
-------- -------- -------- -------- -------- -------- -------- --------
Profit on
ordinary
activities
before
taxation 11,807 (1,697) (1,674) 8,436 9,076 (1,231) (1,630) 6,215
Tax on profit 3 (3,333) 991 18 (2,324) (2,486) 598 16 (1,872)
-------- -------- -------- -------- -------- ------- -------- --------
Profit on
ordinary
activities
after taxation 8,474 (706) (1,656) 6,112 6,590 (633) (1,614) 4,343
Minority
interests (8) - - (8) (3) - - (3)
-------- -------- --------- -------- -------- -------- -------- -------
Profit for the
year 8,466 (706) (1,656) 6,104 6,587 (633) (1,614) 4,340
======== ======== ========= ======== ======== ========
Dividends (3,112) (2,838)
-------- -------
Retained
profit for
the year 2,992 1,502
======== =======
Earnings per
share 4 13.66p (1.14p) (2.66p) 9.85p* 10.69p (1.03p) (2.62p) 7.04p
Diluted
earnings per
share 4 13.06p (1.09p) (2.56p) 9.42p* 10.61p (1.02p) (2.60p) 6.99p
* FRS 3
Group Balance Sheet
As at 31 December 2004
(Restated)
31 December 31 December
2004 2003
£000 £000
Fixed assets
Intangible assets 26,041 27,240
Tangible assets 44,860 41,437
Investments 25 25
---------- ----------
70,926 68,702
---------- ----------
Current assets
Properties held for resale 1,746 1,407
Stocks 27,004 23,641
Debtors 57,977 47,226
Cash and deposits 9,901 14,323
---------- ----------
96,628 86,597
---------- ----------
Creditors: amounts falling due within one year
Borrowings and finance leases (11,806) (10,370)
Other creditors (79,774) (66,768)
---------- ----------
(91,580) (77,138)
---------- ----------
Net current assets 5,048 9,459
---------- ----------
Total assets less current liabilities 75,974 78,161
Creditors: amounts falling due after one year
Borrowings and finance leases (36,003) (40,438)
Provisions for liabilities and charges (4,030) (4,343)
Net assets excluding pension liability 35,941 33,380
Pension liability (4,649) (2,569)
---------- ----------
Net assets 31,292 30,811
========== ==========
Share capital and reserves
Called up share capital 15,519 15,424
Share premium 3,519 3,423
Capital redemption reserve 238 238
Revaluation reserve 685 739
Other reserves 4,313 4,313
Profit and loss account 6,968 6,632
---------- ----------
Equity shareholders' funds 31,242 30,769
Equity minority interests 50 42
---------- ----------
31,292 30,811
========== ==========
Group Cash Flow Statement
For the Year Ended 31 December 2004
(Restated)
Year ended Year ended
31 December 31 December
2004 2003
Notes £000 £000
Net cash flow from operating activities 5a 18,097 20,925
Returns on investments and servicing of finance 5b (4,108) (4,040)
Taxation (2,258) (1,182)
Capital expenditure and financial investment 5c (6,286) (4,230)
Acquisitions and disposals 5d (2,533) 1,031
Equity dividends paid (2,846) (2,759)
---------- ----------
Cash flow before financing 66 9,745
Financing
Issue of new shares 191 89
Loan advances 1,500 50,406
Loan repayments (4,250) (57,539)
Redemption of loan notes (827) (328)
Repayments of capital element of finance leases (1,102) (861)
---------- ----------
(4,488) (8,233)
---------- ----------
(Decrease)/increase in cash in the year (4,422) 1,512
========== ==========
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash (4,422) 1,512
Cash outflow from borrowings 4,679 8,322
---------- ----------
Change in net debt resulting from cash flows 257 9,834
New finance leases (1,542) (1,414)
Amortisation of arrangement fees (138) (35)
---------- ----------
Movement in net debt in the year (1,423) 8,385
---------- ----------
Net debt at the start of the year 5e (36,485) (44,870)
---------- ----------
Net debt at the end of the year 5e (37,908) (36,485)
========== ==========
Statement of Group Total Recognised Gains and Losses
For the Year Ended 31 December 2004
(Restated)
Year ended Year ended
31 December 31 December
2004 2003
£000 £000
Profit for the year 6,104 4,340
Actuarial (loss)/gain recognised in the
pension scheme (3,920) 393
Deferred tax arising on losses / (gains)
in the pension scheme 904 (118)
Current tax arising on losses in the
pension scheme 272 -
Currency translation differences on overseas
net investments 34 (17)
---------- ----------
Total recognised gains and losses relating
to the year 3,394 4,598
Prior year adjustment (see note 6) (7,177) ==========
----------
Total recognised gains and losses since the
last annual report (3,783)
==========
Note of Group Historical Cost Profits and Losses
For the Year Ended 31 December 2004
There is no material difference between the results as shown in the profit and
loss account and their historical cost equivalent.
Reconciliation of Group Movement in Shareholders' Funds
For the Year Ended 31 December 2004
(Restated)
Year ended Year ended
31 December 31 December
2004 2003
£000 £000
Profit for the year 6,104 4,340
Dividends (3,112) (2,838)
---------- ----------
2,992 1,502
Other recognised net gains and losses relating
to the year (2,710) 258
New ordinary share capital issued 191 89
---------- ----------
Net increase in shareholders' funds 473 1,849
Opening shareholders' funds
(original £37,946,000 restated for prior year
adjustment of £7,177,000) 30,769 28,920
---------- ----------
Shareholders' funds at the end of the year 31,242 30,769
========== ==========
Notes to the Financial Statements
1 Segmental Information
Year ended 31 December 2004 (Restated) Year ended 31 December 2003
Profit before Profit before
Operating interest Operating interest
Turnover profit* and tax Net assets Turnover profit* and tax Net assets
£000 £000 £000 £000 £000 £000 £000 £000
Continuing
operations:
Existing
operations 228,132 13,636 10,651 47,259 204,687 11,633 9,714 39,639
Acquisitions 1,717 (21) (282) 1,105 - - - -
-------- -------- -------- -------- -------- ------- -------- --------
Building and
Construction
Products 229,849 13,615 10,369 48,364 204,687 11,633 9,714 39,639
-------- -------- -------- -------- -------- ------- -------- --------
Continuing
operations:
Existing
operations 38,803 1,469 1,344 11,578 36,978 959 17 12,572
-------- -------- -------- -------- -------- ------- -------- --------
Industrial
Products 38,803 1,469 1,344 11,578 36,978 959 17 12,572
-------- -------- -------- -------- -------- ------- -------- --------
Continuing
operations:
Existing
operations 266,935 15,105 11,995 58,837 241,665 12,592 9,731 52,211
Acquisitions 1,717 (21) (282) 1,105 - - - -
-------- -------- -------- -------- -------- ------- -------- --------
Total Operations 268,652 15,084 11,713 59,942 241,665 12,592 9,731 52,211
======== ======== ======== ======== ======= ========
Tax and dividends (10,505) (7,929)
Long term debtors
and other
provisions (6,278) (4,226)
Net borrowings (37,908) (36,485)
Goodwill 26,041 27,240
--------- --------
Total Group 31,292 30,811
========= ========
By geographical
origin
UK 267,100 14,828 11,457 31,277 240,448 12,454 9,684 30,127
Rest of world 1,552 256 256 15 1,217 138 47 684
-------- -------- -------- -------- -------- ------- -------- --------
Total 268,652 15,084 11,713 31,292 241,665 12,592 9,731 30,811
======== ======== ======== ======== ======== ======= ======== ========
Turnover by
geographical
destination
UK 242,964 220,508
Rest of Europe 18,443 11,864
Asia 1,874 2,446
USA 770 1,135
Rest of World 4,601 5,712
World
-------- --------
Total 268,652 241,665
======== ========
* Operating profit is stated before exceptional items and goodwill amortisation.
2. Exceptional Items
Exceptional items from existing operations include £424,000 in respect of the
special bonus and associated costs incurred in connection with the exercise by
D L Grove of share options. The remainder relates primarily to costs arising
from the business reorganisation at Redman Fisher Engineering Limited and
Joseph Ash Limited.
Exceptional items on acquisitions relate to costs incurred in reorganising and
integrating the Lionweld Kennedy operations which were acquired during the year.
The profit on sale of properties of £187,000 relates to the sale of Bumpers
Farm, Chippenham.
3. Taxation
(Restated)
Year ended Year ended
31 December 31 December
2004 2003
£000 £000
UK corporation tax on profits of the year 2,558 1,315
Adjustments in respect of previous periods - (136)
Foreign tax 39 22
--------- ---------
2,597 1,201
Deferred taxation: origination and reversal of
timing differences
Current year (111) 820
Adjustments in respect of previous periods (162) (149)
--------- ----------
2,324 1,872
========= ======
4 Earnings per share
The weighted average number of shares in issue during the year was 61,999,081
(2003: 61,608,085), diluted for the effects of outstanding share options
64,805,705 (2003: 62,076,036). Earnings per share have been calculated on
earnings of £6,104,000 (2003: £4,340,000 as restated) and earnings per share
before exceptional items and goodwill amortisation on earnings of £8,466,000
(2003: £6,587,000 as restated). 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.
5 Notes to the Cash Flow Statement
(Restated)
Year ended Year ended
31 December 2004 31 December 2003
Before
exceptional Exceptional
items and items and
goodwill goodwill
amortisation amortisation Total Total
£000 £000 £000 £000
(a) Reconciliation of operating
profit to net cash inflow
from operating activities
Operating Profit 15,084 (3,558) 11,526 10,957
Depreciation 5,585 - 5,585 5,619
Amortisation of goodwill - 1,674 1,674 1,630
Profit on sale of fixed assets (36) - (36) (160)
Change in working capital:
Stocks (2,613) - (2,613) (573)
Debtors (10,284) - (10,284) 3,283
Creditors and 11,954 291 12,245 169
provisions -------- -------- -------- --------
(943) 291 (652) 2,879
-------- -------- -------- --------
Net cash inflow from 19,690 (1,593) 18,097 20,925
operating activities ======== ======== ======== ========
(b) Returns on investments
and servicing of finance
Interest received 95 417
Interest paid (4,016) (4,303)
Interest element of (187) (154)
finance lease rentals -------- --------
(4,108) (4,040)
======== ========
(c) Capital expenditure and
financial investment
Purchase of fixed assets (7,098) (5,442)
Sale of fixed assets 812 1,212
-------- --------
(6,286) (4,230)
======== ========
(d) Acquisitions and disposals
Purchase of (2,533) -
subsidiary undertakings
and businesses
Sale of businesses - 2,882
(net of disposal costs)
Termination of businesses - (1,851)
-------- --------
(2,533) 1,031
======== ========
(e) Analysis of net debt
Other non-
31 December cash 31 December
2003 Cash Flow changes 2004
£000 £000 £000 £000
Cash at bank and in hand 14,323 (4,422) - 9,901
Debt due within one year (9,563) (1,035) (138) (10,736)
Debt due after one year (38,369) 4,612 - (33,757)
Finance leases (2,876) 1,102 (1,542) (3,316)
leases -------- -------- -------- --------
Net debt (36,485) 257 (1,680) (37,908)
======== ======== ======== ========
6. Prior Year Restatement
The company has adopted FRS 17: Retirement Benefits. The comparative figures
have been restated accordingly.
The adoption of FRS 17 has resulted in a decrease in the Group's reported profit
before tax for the year ended 31 December 2003 of £750,000. There is an overall
decrease in the Group's shareholders' funds as at 31 December 2003 of
£7,177,000. The amount of the restatement credited directly to the Group's P&L
reserve for the year ended 31 December 2003 which is included in the movement in
shareholders funds above was £275,000.
Notes
1 The proposed final dividend will be paid on 13 July 2005 to shareholders on
the register on 10 June 2005 (ex-dividend date 8 June 2005).
2 The financial information set out in this preliminary announcement does not
constitute the Group's statutory accounts for the year ended 31 December
2004 or the year ended 31 December 2003. Group statutory accounts for 2003
have been delivered to the Registrar of Companies and those for 2004 will be
delivered following the Company's Annual General Meeting. The auditor has
reported on those accounts; its 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 8 April 2005, and will
be available from the Registered Office at 2 Highlands Court, Cranmore
Avenue, Shirley, Solihull, B90 4LE.
4 The Annual General Meeting will be held at The Balcony Suite, The National
Motorcycle Museum, Solihull at 10.30 a.m. on Friday 13 May 2005.
Financial calendar: 13 May 2005
Annual General Meeting 13 July 2005
Payment of proposed final dividend September 2005
Interim results announcement for the period to 30 June January 2006
2005
Payment of interim dividend
5 This preliminary announcement of results for the year ended 31 December 2004
was approved by the Directors on 9 March 2005.
End
March 9th 2005
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