Interim Results

IMI PLC 05 September 2005 5 September 2005 IMI plc 2005 First Half Results IMI plc, the major international engineering group, today announced its interim results for the six months ended 30 June 2005. 2005 2004 % change Continuing businesses: Sales Â£641m Â£604m +6.1 Operating profit * Â£72.1m Â£62.9m +14.6 Total: Sales Â£824m Â£801m +2.9 Operating profit * Â£87.1m Â£79.1m +10.1 Total profit before tax * Â£82.4m Â£77.1m +6.9 Adjusted earnings per share ** 16.0p 14.2p +12.7 Exceptional loss on disposal/closure (Â£98.0m) - Basic (loss)/earnings per share (12.0p) 14.1p Basic earnings per share - continuing businesses 12.1p 11.0p +10.0 Dividend 6.65p 6.3p +5.6 * before intangible amortisation and exceptional items ** before change in fair value of financial instruments, intangible amortisation and exceptional items Norman Askew, Chairman, of IMI commented: 'I am pleased to report that continuing businesses maintained their steady progress with operating profit increasing by around 15%. The sale of the Polypipe businesses, also announced today, continues the Group's strategic development under the leadership of Martin Lamb. 'We remain confident that our continuing businesses in Fluid Controls and Retail Dispense are capable of delivering attractive long term growth.' CHAIRMAN'S STATEMENT In my first statement as Chairman, I am pleased to report that continuing businesses maintained their steady progress with operating profit increasing by around 15%. The sale of the Polypipe businesses, completed on 2 September 2005, continues the Group's strategic development under the leadership of Martin Lamb. This strengthens further our balance sheet capacity and we will continue to review our capital management programme together with our declared intention of growing our continuing businesses both organically and through acquisition. In February, we added to our Fluid Power business by acquiring US based Syron Engineering and we continue to pursue a number of acquisition targets which fit our strategic objectives. By the end of June we had spent Â£33.6m through the on-market share buy-back programme and we will look to purchase further shares into treasury as appropriate. In line with its policy of linking dividend growth to growth in adjusted earnings, the Board has decided to increase the interim dividend by 5.6% to 6.65p (2004: 6.3p). Sale of Polypipe The Polypipe businesses previously included under Building Products have been sold to a leading New York based private equity investment fund, Castle Harlan Partners IV L.P. The proceeds of the transaction are worth up to Â£293m comprising Â£219m payable in cash immediately on completion, a further Â£39m vendor loan note and a contingent consideration of Â£35m based on performance targets for the three years ending 31 December 2007. The results of the Polypipe businesses for the six months to June 30 are included in these interim results under discontinued businesses. The annual results for 2005 will include the results of the Polypipe businesses for the eight months to 31 August 2005. The book value of the goodwill and operating assets at the date of sale is expected to be Â£335-340m and the loss on sale has been estimated at Â£90m and shown as an exceptional item. In arriving at this estimate, the contingent consideration has not been recognised. The Polypipe Doors and Windows division has been closed at a cost of around Â£8m which is also shown as an exceptional item. Results summary The results have been prepared under International Financial Reporting Standards ('IFRS') and the 2004 comparatives have been restated. Following the announcement of the sale of Polypipe, the results have been analysed between continuing and discontinued operations. The impact of exchange rate movements on sales and profit for the period was not material. Sales from continuing businesses at Â£641m were 6% ahead of last year including Â£18m from acquisitions. Operating profit from continuing businesses before intangible amortisation was Â£72.1m, nearly 15% ahead, including Â£2.2m from acquisitions. Profit after intangible amortisation at Â£70.2m was 13% ahead. Discontinued businesses comprised a full six months trading of the Polypipe businesses except for the Doors and Windows division which was closed during the period. Sales at Â£183m and operating profit (before exceptional items) at Â£15.0m were both around 7% lower than last year. Total operating profit before goodwill amortisation and exceptional items was Â£87.1m compared to Â£79.1m, an increase of 10%. Interest costs on net borrowings were similar to last year and were covered 18 times. Other net financial costs, comprising the impact of pension fund financing under IAS 19 and the change in fair value of financial instruments under IAS 39, had the effect of increasing the net financing costs from Â£2.0m for the same period in 2004 to Â£4.7m. Total profit before tax, intangible amortisation and exceptional items was Â£82.4m (2004: Â£77.1m), an increase of 7%. Total profit before tax and exceptional items was Â£80.5m (2004: Â£76.3m). The effective tax rate for the year on profit before intangible amortisation and exceptional items is 32% compared to 33% in 2004. Adjusted earnings per share (excluding the change in the fair value of financial instruments, intangible amortisation and exceptional items) is 16.0p compared to 14.2p, an increase of 12.7%. The impact of exceptional items results in a basic loss per share of 12.0p (2004: 14.1p earnings). Cash flow Operating cash flow for the first half reflects the normal seasonal working capital outflow of around Â£49m (2004: Â£47m). Operating cash flow generated by discontinued businesses was Â£9m (2004: Â£2m). Payment of the EU fine in respect of the copper plumbing tube enquiry (Â£31m), acquisitions (Â£19m) and dividends (Â£36m), absorbed Â£86m and Â£34m was used to buy back shares. As a result, total cash outflow for the period was Â£100m. Balance sheet Closing net debt was Â£196m (June 2004: Â£159m), an increase of Â£120m from the start of the year including a Â£9m adverse impact caused by currency movements, mainly from a stronger US dollar. The debt to EBITDA ratio at the end of June was 0.8. Total shareholders' equity reduced by Â£103m from the start of the year, largely as a result of the exceptional items and the share buy back. Balance sheet gearing was 43%. Outlook Trading in the second half is expected to follow the same pattern as the first half with the US and Asian markets remaining robust and European end-markets subdued. Despite our concern about European markets, we expect to deliver further progress in the second half. We remain confident that our continuing businesses in Fluid Controls and Retail Dispense are capable of delivering attractive long term growth. OPERATIONS REVIEW The following is a review of our business areas for the six months to 30 June 2005. Comparisons are against the first half of 2004. Operating profit is stated before intangible amortisation and arrived at on the basis of IFRS. The comparative figures for 2004 have been restated where necessary. Severe Service Our Severe Service business continues to benefit from buoyant power and oil and gas markets. Although flattered by a comparatively weak 2004 shipment performance, sales and operating profit increased respectively by 19% to Â£88m (2004: Â£74m) and 25% to Â£10.0m (2004: Â£8.0m). Our current growth is being driven by winning new valve projects and this is reflected in the run rate of order intake which is some 15%-20% ahead of this time last year. The Asian and Middle East markets are particularly strong at present with planned new construction and production activity increasing. Our flexible approach to exploiting market demand means more of our resources are currently focused on these opportunities and, although still healthy, our customer service business is showing comparatively modest growth. While oil and natural gas prices continue at high levels we expect demand for new valve projects to remain strong. Fluid Power The first half performance in Fluid Power maintained the encouraging momentum shown throughout last year. The success of our sector strategy continues and with the US and Asian markets remaining strong, we were able to achieve organic growth of 5% despite generally weak European end markets. Syron, acquired in February 2005, and FAS both performed well and between them contributed sales of Â£18m and operating profit of Â£2.2m. Total sales at Â£243m (2004: Â£214m) and operating profit at Â£28.7m (2004: Â£20.6m) were respectively around 14% and 39% ahead of last year. The global truck sector has been very strong for us in the US, UK and Germany and the presence of FAS has already strengthened our position in the medical sector. We are very encouraged by the success of the new products launched over the last year or so and this will continue to be a focus of our attention. Work also continues on ensuring that the manufacturing and engineering resource is properly aligned for the future needs of the business. Indoor Climate Overall volumes in Indoor Climate were flat with some modest growth in balancing valves and markets outside our core European heartland offset by lower thermostatic radiator valves (TRVs) in Germany. Sales were Â£83m (2004: Â£82m) and operating profit slightly lower than last year at Â£11.3m (2004: Â£11.8m). The recovery seen in sales of TRVs in the first half of 2004 was short lived and sales in the first half of 2005 are around 4% lower than last year. The German construction market remains weak with no sign of any improvement in the short term. We are enjoying some success in extending our balancing valve concept to selected markets with good momentum building in Eastern Europe, US and Middle East. We continue to win good UK project opportunities. Beverage Dispense In Beverage Dispense the US enjoyed another period of steady growth. Despite the anticipated slowdown in spend by one of our major customers, our brand owner and foodservice business performed well, helped by increased same store restaurant traffic leading to further releases of capital. Cornelius had the honour to be recognised by YUM! Brands as its 'Global Equipment Supplier of the Year'. In Europe, sales of carbonated soft drinks dispense equipment continued to slow while Asia Pacific recorded strong growth across the whole of the region. As expected, the beer market in Europe remained weak with little sign of any short term recovery. The UK beer market, following a period of decline, has recently been more encouraging. Eastern Europe continues to offer promise and we are developing our capability to access directly the growing Ukraine and Russian markets with specifically designed and locally made products. Operational efficiencies and low cost sourcing continue to make progress. Sales for the period were Â£141m (2004: Â£142m) and operating profit Â£14.0m (2004: Â£13.1m) an increase of 7%. Merchandising Systems The strong performance of our Merchandising Systems business in the first half of 2004, which benefited from the shipment of some large projects, was always going to be difficult to match. With the US automotive sector in particular affected by the absence of the Scion (Toyota) project, sales at Â£86m (2004: Â£92m) were 7% lower and operating profit at Â£8.1m (2004: Â£9.4m) 14% lower. With less project based sales expected in 2005 as a whole, underlying automotive sector activity will be centred around the traditional new model launches in the Autumn. Aided by customer product launches in Europe, sales in the cosmetics sector were ahead of last year and our visi-slide merchandising concept continues to do well in the beverage sector. In grocery, bulk food display systems and front end merchandising units achieved good results and there was some further growth in our traditional Cannon display carts. The input cost increases seen in the last eighteen months have now been largely mitigated by reductions in our US cost base and lower cost sourcing initiatives. Polypipe The markets for the Polypipe businesses were generally weaker than 2004 although the pricing environment improved. With its market position deteriorating the Doors and Windows division was closed. Polypipe achieved operating profit of Â£15.0m (2004: Â£16.2m). CONSOLIDATED INTERIM INCOME STATEMENT 6 months to 30 June 2005 6 months to 30 June 2004 Year to 31 December 2004 Before Before Before exceptional Exceptional exceptional exceptional items and items and items and items and intangible intangible intangible intangible amortisation amortisation Total amortisation Total amortisation Total (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Notes Â£m Â£m Â£m Â£m Â£m Â£m Â£m -------------------------------------------------------------------------------------------------- Revenue Continuing operations 2 641 641 604 604 1239 1239 Discontinued operations 3 183 183 197 197 372 372 ---------------------------------------- -------------------------- --------------------------- Total revenue 824 824 801 801 1611 1611 ---------------------------------------- -------------------------- --------------------------- Operating profit/(loss) Continuing operations 2 72.1 (1.9) 70.2 62.9 62.1 137.2 131.4 Discontinued operations 3 15.0 - 15.0 16.2 16.2 27.2 27.2 ---------------------------------------- -------------------------- --------------------------- Total operating profit/(loss) 87.1 (1.9) 85.2 79.1 78.3 164.4 158.6 Estimated loss on disposal & closure costs 3 - (98.0) (98.0) - - - - European Commission enquiry 10 - - - - - - (33.1) ---------------------------------------- -------------------------- --------------------------- Profit/(loss) before financing costs 87.1 (99.9) (12.8) 79.1 78.3 164.4 125.5 ---------------------------------------- -------------------------- --------------------------- Net interest (4.8) - (4.8) (4.8) (4.8) (9.2) (9.2) Other financial income 3.0 - 3.0 2.8 2.8 5.9 5.9 Other financial expenses (2.9) - (2.9) - - - - ---------------------------------------- -------------------------- --------------------------- Net financing costs 4 (4.7) - (4.7) (2.0) (2.0) (3.3) (3.3) ---------------------------------------- -------------------------- --------------------------- Profit/(loss) before tax ---------------------------------------- -------------------------- --------------------------- Continuing businesses 67.4 (1.9) 65.5 60.9 60.1 133.9 128.1 Discontinued businesses 15.0 (98.0) (83.0) 16.2 16.2 27.2 (5.9) ---------------------------------------- -------------------------- --------------------------- Total profit/(loss) before tax 82.4 (99.9) (17.5) 77.1 76.3 161.1 122.2 Income tax expense 5 (26.4) 3.1 (23.3) (25.9) (25.6) (54.5) (52.9) ---------------------------------------- -------------------------- --------------------------- Profit/(loss) for the period ---------------------------------------- -------------------------- --------------------------- Continuing businesses 45.6 (1.3) 44.3 40.1 39.6 88.1 83.9 ---------------------------------------- -------------------------- --------------------------- Discontinued businesses 3 10.4 (95.5) (85.1) 11.1 11.1 18.5 (14.6) ---------------------------------------- -------------------------- --------------------------- Total profit/(loss) for the period 56.0 (96.8) (40.8) 51.2 50.7 106.6 69.3 ---------------------------------------- -------------------------- --------------------------- Attributable to: Equity holders of the parent (42.3) 49.9 67.5 Minority interest 1.5 0.8 1.8 ------- ------- ------- Total profit/(loss) for the period (40.8) 50.7 69.3 ------- ------- ------- Earnings per share Basic earnings per share 7 (12.0p) 14.1p 19.1p Continuing businesses 12.1p 11.0p 23.2p Adjusted earnings per share 7 16.0p 14.2p 29.5p Continuing businesses 13.1p 11.1p 24.3p Diluted earnings per share 7 (11.9p) 14.0p 18.9p CONSOLIDATED INTERIM BALANCE SHEET 2005 2004 30 June 30 June 31 Dec (unaudited) (unaudited) (unaudited) Â£m Â£m Â£m --------------------------------------------------- Assets Property, plant and equipment 185.6 280.4 279.7 Intangible assets 172.9 324.4 333.4 Deferred tax assets 55.8 63.3 61.7 --------------------------------------------------- Total non-current assets 414.3 668.1 674.8 --------------------------------------------------- Inventories 203.7 251.9 248.1 Trade and other receivables 285.0 364.9 307.7 Investments 8.6 8.3 8.0 Cash and cash equivalents 84.1 87.7 120.7 Disposal group assets classified as held for sale 300.2 - - --------------------------------------------------- Total current assets 881.6 712.8 684.5 --------------------------------------------------- Total assets 1295.9 1380.9 1359.3 --------------------------------------------------- Liabilities Bank overdraft (3.3) (16.7) (5.3) Interest-bearing loans and borrowings (62.2) (82.1) (55.2) Trade and other payables (303.8) (376.9) (364.3) Exceptional payables - EC fine - - (31.3) Disposal group liabilities classified as held for sale (59.7) - - --------------------------------------------------- Total current liabilities (429.0) (475.7) (456.1) --------------------------------------------------- Interest-bearing loans and borrowings (214.1) (147.7) (135.9) Employee benefits (130.0) (133.6) (131.4) Other payables (24.7) (29.0) (28.4) Provisions (34.2) (31.5) (41.3) Deferred tax liabilities (8.4) (7.1) (8.3) --------------------------------------------------- Total non-current liabilities (411.4) (348.9) (345.3) --------------------------------------------------- Total liabilities (840.4) (824.6) (801.4) --------------------------------------------------- Net assets 455.5 556.3 557.9 --------------------------------------------------- Equity Issued capital 89.2 88.5 88.7 Share premium 145.1 138.3 139.9 Treasury shares (33.6) - - Reserves 1.6 1.6 1.6 Retained earnings 248.4 323.8 323.7 --------------------------------------------------- Total equity attributable to equity holders of the parent 450.7 552.2 553.9 Minority interest 4.8 4.1 4.0 --------------------------------------------------- Total equity 455.5 556.3 557.9 --------------------------------------------------- CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 6 months to 6 months to Year to 30 June 30 June 31 Dec 2005 2004 2004 (unaudited) (unaudited) (unaudited) Â£m Â£m Â£m -------------------------------------------------- Cash generated from the operations (Note 8) 67.4 62.2 239.4 Interest paid (9.7) (9.1) (17.4) Income taxes paid (25.6) (28.0) (52.3) -------------------------------------------------- Net cash from operating activities 32.1 25.1 169.7 -------------------------------------------------- EC fine (31.3) - - -------------------------------------------------- Cash flows from investment activities Proceeds from sale of plant equipment & property 2.6 1.5 4.0 (Purchase of)/proceeds from sale of investments - (0.2) 0.2 Interest received 4.9 4.3 8.2 Acquisition of subsidiary, net of cash acquired (18.8) (1.4) (20.9) Acquisition of property, plant and equipment (21.4) (21.3) (50.8) Development expenditure (3.3) (1.3) (2.8) -------------------------------------------------- Net cash from investing activities (36.0) (18.4) (62.1) -------------------------------------------------- Cash flows from financing activities Proceeds from the issue of share capital 5.8 2.0 3.8 Purchase of own shares (33.6) - - Drawdown/(repayment) of borrowings 75.6 28.9 (9.8) Dividends paid to minorities (0.9) (0.3) (1.3) Dividends paid (36.2) (33.6) (55.9) -------------------------------------------------- Net cash from financing activities 10.7 (3.0) (63.2) -------------------------------------------------- Net (decrease)/increase in cash and cash equivalents (24.5) 3.7 44.4 Cash and cash equivalents at start of period 115.4 66.9 66.9 Effect of exchange rate fluctuations on cash held 0.4 0.4 4.1 -------------------------------------------------- Cash and cash equivalents at end of period 91.3 71.0 115.4 -------------------------------------------------- Reconciliation of net cash to movement in netborrowings Net(decrease)/increase in cash and cash equivalents (24.5) 3.7 44.4 (Drawdown)/repayment of borrowings (75.6) (28.9) 9.8 -------------------------------------------------- Cash (outflow)/inflow (100.1) (25.2) 54.2 Currency translation differences (9.2) 10.8 14.5 -------------------------------------------------- Movement in net borrowings in the period (109.3) (14.4) 68.7 Disposal group assets classified as held for sale (10.5) - - Net borrowings at the start of the period (75.7) (144.4) (144.4) -------------------------------------------------- Net borrowings at the end of period (195.5) (158.8) (75.7) -------------------------------------------------- CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE 6 months to 6 months to Year to 30 June 2005 30 June 2004 31 Dec 2004 (unaudited) (unaudited) (unaudited) Â£m Â£m Â£m -------------------------------------------------- Foreign exchange translation differences 0.2 - 2.3 Actuarial (losses)/gains on defined benefit plans (net of deferred tax) (2.3) 0.4 3.9 Net gain/(loss) on hedge of net investment in foreign subsidiaries 3.9 (2.3) (4.5) -------------------------------------------------- Income and expense recognised directly in equity 1.8 (1.9) 1.7 (Loss)/profit for the period (40.8) 50.7 69.3 -------------------------------------------------- Total recognised income and expense for the period (39.0) 48.8 71.0 -------------------------------------------------- Attributable to: Equity holders of the parent (40.5) 48.0 69.2 Minority interest 1.5 0.8 1.8 -------------------------------------------------- Total recognised income and expense for the period (39.0) 48.8 71.0 ---------------------------------------------------------------------------------------------- STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 6 months to 6 months to Year to 30 June 2005 30 June 2004 31 Dec 2004 (unaudited) (unaudited) (unaudited) Â£m Â£m Â£m -------------------------------------------------- Shareholders' equity at start of period 553.9 535.1 535.1 Total recognised income and expense for the period (40.5) 48.0 69.2 Dividends (36.2) (33.6) (55.9) Share based payments (net of deferred tax) 1.3 0.7 1.7 Issue of ordinary shares net of costs 5.8 2.0 3.8 Purchase of own shares into treasury (33.6) - - -------------------------------------------------- (62.7) (30.9) (50.4) -------------------------------------------------- Shareholders' equity at end of period 450.7 552.2 553.9 -------------------------------------------------- NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Basis of preparation EU law (IAS Regulation EC 1606/2002) requires that the next annual consolidated financial statements of the Group, for the year ending 31 December 2005, be prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the EU ('adopted IFRS'). The transition date for the application of IFRS is 1 January 2004. The comparative figures for 30 June 2004 and 31 December 2004 have been restated to reflect the transition to IFRS and reconciliations of profit and equity from UK GAAP to IFRS are presented in Appendix 2, as well as a reconciliation of equity at 1 January 2004. This interim financial information has been prepared on the basis of the recognition and measurement requirements of IFRS in issue that either are endorsed by the EU and effective (or available for early adoption) or are expected to be endorsed and effective (or available for early adoption) at 31 December 2005, the Group's first annual reporting date at which it is required to use adopted IFRS. Based on these IFRS the directors have made assumptions about the accounting policies expected to be applied when the first annual IFRS financial statements are prepared for the year ending 31 December 2005. In particular, the directors have assumed that the EU will endorse the amendment to IAS19 'Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures' issued in December 2004 electing to present actuarial gains and losses arising on defined benefit pension schemes in the Statement of Recognised Income and Expense. However, the adopted IFRS that will be effective (or available for early adoption) in the annual financial statements for the year ending 31 December 2005 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period will be determined finally only when the annual financial statements are prepared for the year ending 31 December 2005. The accounting policies used in the preparation of these financial statements under IFRS are provided in Appendix 1. As permitted, these interim financial statements have been prepared in accordance with the UK listing rules and not in accordance with IAS34 'Interim Financial Reporting'. The comparative figures for the year ended 31 December 2004 are not the Company's statutory accounts for that financial year. Those accounts, which were prepared under UK GAAP, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the Auditors was unqualified and did not contain statements under S237(2) or (3) of the Companies Act 1985. A reconciliation has been provided in Appendix 2. The consolidated interim financial statements were authorised by the Board for issuance on 5 September 2005. When preparing the Group's IFRS balance sheet at 1 January 2004, the date of transition, the following optional exemptions from full retrospective application of IFRS accounting policies have been adopted: a) Business combinations - the provisions of IFRS 3 'Business Combinations' have been applied prospectively from 1 January 2004. As a result; â€¢ goodwill recognised as an asset under UK GAAP as at 31 December 2003 has not been revised retrospectively to identify and extract intangible assets to berecognised separate from goodwill. The carrying amount of goodwill brought forward in the opening IFRS balance sheet is that recorded under UK GAAP; and â€¢ goodwill written-off directly to reserves under UK GAAP will not be taken into account in determining any gain or loss on the disposal of acquired businesses on or after 31 December 2003. b) Employee benefits - the accumulated actuarial gains and losses in respect of employee defined benefit plans have been recognised in full through reserves. In addition, the Group has chosen to restate comparative information with respect to IAS32 'Financial Instruments: Disclosure and Presentation', IAS39 'Financial Instruments: Recognition and Measurement' as allowed under IFRS1 'First-time Adoption of IFRS' applied and IFRS2 'Share Based Payment' to share options granted on or after 7 November 2002. 2. Segmental analysis Segment reporting Segment information is presented in the consolidated interim financial statements in respect of the Group's business segments, which are the primary basis of segment reporting. The business segment reporting format reflects the Group's management and internal reporting structure. Revenue Operating Profit -------------------------- -------------------------- 6 mths 6 mths Year 6 mths 6 mths Year to to to to to to 30 June 30 June 31 Dec 30 June 30 June 31 Dec 2005 2004 2004 2005 2004 2004 Â£m Â£m Â£m Â£m Â£m Â£m -------------------------- -------------------------- before exceptional items and intangible amortisation Fluid Controls 414 370 784 50.0 40.4 90.3 --------------------------------------------------------------------------------------- Severe Service 88 74 177 10.0 8.0 22.5 Fluid Power 243 214 439 28.7 20.6 43.5 Indoor Climate 83 82 168 11.3 11.8 24.3 --------------------------------------------------------------------------------------- Retail Dispense 227 234 455 22.1 22.5 46.9 --------------------------------------------------------------------------------------- Beverage Dispense 141 142 267 14.0 13.1 24.9 Merchandising Systems 86 92 188 8.1 9.4 22.0 --------------------------------------------------------------------------------------- Total continuing operations 641 604 1239 72.1 62.9 137.2 --------------------------------------------------------------------------------------- after intangible amortisation Fluid Controls 48.5 40.0 85.2 --------------------------------------------------------------------------------------- Severe Service 9.9 8.0 22.4 Fluid Power 27.5 20.4 38.9 Indoor Climate 11.1 11.6 23.9 --------------------------------------------------------------------------------------- Retail Dispense 21.7 22.1 46.2 --------------------------------------------------------------------------------------- Beverage Dispense 13.6 12.7 24.2 Merchandising Systems 8.1 9.4 22.0 --------------------------------------------------------------------------------------- Total continuing operations 70.2 62.1 131.4 -------------------------- The results in respect of discontinued operations are set out in note 3. Acquisitions of subsidiaries Of the reported increase in revenue and operating profit of continuing operations (before exceptional items and intangible amortisation), Â£18m and Â£2.2m revenue and operating profit respectively result from the 2005 acquisition of Syron Engineering and Manufacturing LLC (Fluid Power), together with the extra months from the 2004 acquisition of Fluid Automotive Systems (Fluid Power). 3. Discontinued operations Discontinued operations comprise the Polypipe businesses previously reported in Building Products. The sale of Polypipe excluding Doors and Windows which has been closed, was completed on 2 September 2005. The sale and profits from discontinued operations were as follows: 6 months to 30 6 months to 30 Year to 31 Dec June 2005 June 2004 2004 Â£m Â£m Â£m Â£m Â£m Â£m ------------------ --------------- -------------- Revenue 183 197 372 ------- ------ ------ Operating profit 15.0 16.2 27.2 Less tax (4.6) (5.1) (8.7) ------- ------- ------ 10.4 11.1 18.5 Estimated loss on disposal (90.0) Closure costs (8.0) ------- (98.0) Less tax 2.5 ------- (95.5) - - ------- ------- ------- (85.1) 11.1 18.5 ------- ------- EC fine relating to copper tube businesses sold in 2002 (33.1) ------- (14.6) ------- During the six months to 30 June 2005 the discontinued operations had cash inflows of Â£9m (2004: Â£2m). 4. Net financing costs 6 months to 30 6 months to Year to June 2005 30 June 2004 31 Dec 2004 Â£m Â£m Â£m -------------------------------------------- Interest income 3.5 3.2 6.0 Interest expense (8.3) (8.0) (15.2) Interest charge impact of IAS19 3.0 2.5 5.1 Change in fair values of financial instruments under IAS39 (2.9) 0.3 0.8 -------------------------------------------- (4.7) (2.0) (3.3) -------------------------------------------- 5. Taxation The interim taxation charge of 32% is calculated by applying the directors' best estimate of the annual tax rate to the taxable profit for the period (six months ended 30 June 2004: 33%) in respect of profit before exceptional items. The estimated tax relief on exceptional items is Â£2.5m. 6. Dividends The directors have declared an interim dividend for the current year of 6.65p per share (2004: 6.3p) which will be paid on 21 October 2005 to shareholders on the register on 14 September 2005. In accordance with IAS10 'Events after the Balance Sheet Date', this interim dividend has not been reflected in the interim accounts. 7. Earnings per share The weighted average number of shares in issue during the period, net of shares purchased by the company and held as treasury shares, was 352.9m, 355.7m diluted for the effect of outstanding share options (six months to 30 June 2004: 353.6m, 356.1m diluted). Basic earnings per share have been calculated on losses of Â£42.3m, (2004: earnings of Â£49.9m). The directors consider that adjusted earnings per share figures, using earnings as calculated below, give a more meaningful indication of the underlying performance. Total 6 months to 6 months to 30 Year to 31 30 June 2005 June 2004 Dec 2004 Â£m Â£m Â£m ------------------------------------------- (Loss)/profit for the period attributable to equity holders of the parent (42.3) 49.9 67.5 Charges/(credits) included in profit for the period: Change in fair value of financial instruments 2.9 (0.3) (0.8) Intangible amortisation 1.9 0.8 5.8 Exceptional items 98.0 - 33.1 Taxation on charges/(credits) included in profit for the period (4.0) (0.2) (1.3) ------------------------------------------- Earnings for adjusted EPS 56.5 50.2 104.3 ------------------------------------------- From continuing operations 6 months to 6 months to 30 Year to 31 30 June 2005 June 2004 Dec 2004 Â£m Â£m Â£m ------------------------------------------- Profit for the period 44.3 39.6 83.9 Minority interest (1.5) (0.8) (1.8) Charges/(credits) included in profit for the period: Change in fair value of financial instruments 2.9 (0.3) (0.8) Intangible amortisation 1.9 0.8 5.8 Taxation on charges/(credits) included in profit for the period (1.5) (0.2) (1.3) ------------------------------------------- Earnings for adjusted EPS 46.1 39.1 85.8 ------------------------------------------- From discontinued operations 6 months to 6 months to 30 Year to 31 30 June 2005 June 2004 Dec 2004 Â£m Â£m Â£m ------------------------------------------- (Loss)/profit for the period from discontinued businesses (85.1) 11.1 (14.6) Exceptional items after income tax expense 95.5 - 33.1 ------------------------------------------- Earnings for adjusted EPS 10.4 11.1 18.5 ------------------------------------------- Weighted average number of shares 352.9 353.6 354.0 ------------------------------------------- 8. Reconciliation of cash generated from the operations 6 months to 6 months to Year to 30 June 30 June 31 Dec 2005 2004 2004 (unaudited) (unaudited) (unaudited) Â£m Â£m Â£m ---------------------------------------------- Cash flows from operating activities (Loss)/profit for the period (40.8) 50.7 69.3 Adjustments for: Depreciation 27.2 28.7 58.3 Amortisation 1.9 0.8 5.8 Estimated loss on disposal & closure costs 98.0 - - EU fine - - 33.1 Financing income (6.5) (6.0) (11.9) Financing expense 11.2 8.0 15.2 Employee benefit charge 1.0 0.8 1.6 Equity-settled share-based payment expenses 1.0 0.6 1.4 Income tax expense 23.3 25.6 52.9 ---------------------------------------------- Operating profit before changes in working capital and provisions 116.3 109.2 225.7 (Increase)/decrease in trade and other receivables (46.4) (61.8) 0.2 Decrease/(increase) in inventories 1.9 (13.0) (4.7) Increase in trade and other payables 5.0 35.1 17.9 (Decrease)/increase in provisions and employee benefits (9.4) (7.3) 0.3 ---------------------------------------------- Cash generated from the operations 67.4 62.2 239.4 ---------------------------------------------- 9. Exchange rates The profit and loss accounts of overseas subsidiaries are translated into sterling at average rates of exchange for the period, balance sheets are translated at period end rates. The main currencies are: Average period rates Balance sheet rates --------------------------------------------------------------------- 6 months to 30 June Year 30 June 30 June 31 Dec 2005 2004 2004 2005 2004 2004 --------------------------------------------------------------------- Euro 1.46 1.48 1.47 1.48 1.49 1.41 US Dollar 1.87 1.82 1.83 1.79 1.81 1.92 10. European Commission enquiry In September 2004, the European Commission announced the imposition of a fine of â‚¬44.98m on IMI in connection with its former copper tube business sold in 2002. Pending the outcome of an appeal made in January 2005, the full amount of the fine together with associated costs was provided and shown as an exceptional item of Â£33.1m at 31 December 2004. The fine was paid in February 2005. The European Commission is investigating allegations of anti-competitive behaviour among certain manufacturers of copper fittings. Notwithstanding IMI's disposal of its Copper Fittings businesses in 2002, it retains responsibility in relation to the European Commission's investigations in respect of those businesses. A Statement of Objections is expected to be issued by the Commission during 2005. It is not possible to give any reliable estimate of the likely level of fine. 11. Financial information This interim statement has been reviewed by the Group's auditors having regard to the bulletin Review of Interim Financial Information, issued by the Auditing Practices Board. A copy of their unqualified review opinion is attached. The Interim Report will be posted to shareholders on 12 September 2005 and will be available from the same date at the Company's registered office, Lakeside, Solihull Parkway, Birmingham Business Park, Birmingham, B37 7XZ. NEXT TRADING ANNOUNCEMENT Our next trading update will be issued on 16 December 2005. Enquiries to: Graham Truscott - Communications Director - Tel: 0121 717 3710 Press release available on the Internet at www.imiplc.com Issued by: Nick Oborne - Weber Shandwick Square Mile - Tel: 0207 067 0700 Independent review report by KPMG Audit Plc to IMI plc Introduction We have been engaged by the Company to review the financial information set out on pages 6 to 15 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Listing Rules of the Financial Services Authority. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual financial statements except where any changes and the reason for them are disclosed. As disclosed in note 1 to the financial information, the next annual financial statements of the Group will be prepared in accordance with IFRS adopted for use in the European Union. The accounting policies that have been adopted in preparing the financial information are consistent with those that the directors currently intend to use in the next annual financial statements. There is, however, a possibility that the directors may determine some changes to these policies are necessary, when preparing the full annual financial statements for the first time in accordance with these IFRS adopted for use by the European Union. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/ 4: Review of Interim Financial Information issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of Group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2005. KPMG Audit Plc Chartered Accountants Birmingham 5 September 2005 Appendix 1 Significant accounting policies IMI plc (the 'Company') is a company domiciled in the United Kingdom. The consolidated financial statements of the Company for the six months ended 30 June 2005 comprise the Company and its subsidiaries (together referred to as the 'Group'). a) Basis of accounting The financial statements are presented in pounds sterling, rounded to the nearest hundred thousand. They are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments, financial instruments held for trading, financial instruments classified as available for sale and assets and liabilities identified as hedged items. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell. The accounting policies have been applied consistently throughout the Group for the purposes of these consolidated financial statements. b) Basis of consolidation i) Subsidiaries Subsidiaries are those entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. ii) Transactions eliminated on consolidation Intragroup balances and transactions, and any unrealised gains arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. c) Foreign currencies i) Foreign currency transactions Monetary assets and liabilities denominated in foreign currencies have been translated into sterling at the rates of exchange ruling at the balance sheet date. The profit and loss accounts of overseas subsidiary undertakings are translated at the appropriate average rate of exchange for the year and the adjustment to year end rates is taken directly to reserves. Differences arising on revenue transactions in the year are reflected in profit before taxation. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to sterling at foreign exchange rates ruling at the dates the values were determined. ii) Net investment in foreign operations Exchange differences arising on the retranslation of the opening net assets of foreign subsidiaries, foreign currency loans used for overseas investment and transactions executed solely for the purpose of hedging foreign currency assets exposure are taken directly to reserves. Any differences that have arisen since 1 January 2004, the date of transition to IFRS, are presented as a separate component of equity. d) Financial instruments and fair value hedging Financial instruments are recorded initially at fair value. Subsequent measurement depends on the designation of the instrument, as follows: â€¢ Investments (other than fixed deposits) and short term investments (other than fixed deposits) are normally designated as available for sale. Where the exposure to a change in fair value of such an asset is substantially offset by the exposure to a change in the fair value of derivatives, the asset is generally classified as 'fair value through profit or loss'. â€¢ Fixed deposits, comprising principally funds held with banks and other financial institutions, and short term borrowings and overdrafts are classified as loans and receivables and held at amortised cost. â€¢ Derivatives, comprising interest rate swaps, foreign exchange contracts and options and embedded derivatives, are classified as held for trading. â€¢ Long term loans are generally held at amortised cost. Where the long term loan is hedged, generally by an interest rate swap, and the hedge is regarded as effective, the carrying value of the long term loan is adjusted for changes in fair value. Changes in the fair value of financial instruments are dealt with as follows: â€¢ For available for sale assets, exchange losses and impairments are taken to the income statement. All other changes in fair value are taken to reserves. On disposal of the related asset, the accumulated changes in fair value recorded in reserves are included in the gain or loss recorded in the income statement. â€¢ For long term loans effectively hedged, assets at fair value through profit or loss and assets held for trading, all changes in fair value are recognised in the income statement. e) Other hedging i) Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory), or a liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement. ii) Hedge of monetary assets and liabilities Where a derivative financial instrument is used to economically hedge the foreign exchange exposure of a recognised monetary asset or liability, no hedge accounting is applied and any gain or loss on the hedging instrument is recognised in the income statement. iii) Hedge of net investment in foreign operation Where a foreign currency liability or derivative financial instrument hedges a net investment in a foreign operation, foreign exchange differences arising on translation of the liability or derivative financial instrument are recognised directly in equity. f) Intangible assets i) Goodwill Goodwill arising on acquisitions from 1 January 2004 is recognised as an intangible asset at the date of acquisition. The asset recognised is measured as the excess of the consideration paid over the fair value of the net assets acquired and associated costs. On an ongoing basis the goodwill is measured at cost less impairment losses (see accounting policy on 'Impairment'). Fair value adjustments are always considered to be provisional at the first balance sheet date after acquisition to allow the maximum time to elapse for management to make a reliable estimate. Under the Group's previous accounting policies, which were consistent with UK GAAP, goodwill on acquisitions prior to 1 January 1998 was deducted from reserves in the year of acquisition. In accordance with IFRS3 'Business Combinations' such goodwill continues as a deduction from reserves and is not recognised in the income statement in the event of disposal of the cash-generating unit to which it relates. Goodwill arising on acquisitions after 1 January 1998 was previously capitalised as an intangible asset and amortised on a straight-line basis over a maximum 20 years. The un-amortised goodwill under UK GAAP at 31 December 2003 became the opening goodwill under the Group's transition to IFRS on 1 January 2004. ii) Research and development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy on 'Impairment'). iii) Other intangible assets Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy on 'Impairment'). Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred. Amortisation of intangible assets other than goodwill Amortisation is charged to the income statement on a straight-line basis (unless such a basis gives a significant distortion to anticipated benefit) over the estimated useful lives of intangible assets. Amortisation commences from the date the intangible asset becomes available for use. The estimated maximum useful lives are as follows: â€¢ Capitalised development costs 5 years â€¢ Patents Life of initial patent grant g) Property, plant and equipment Freehold land and assets in the course of construction are not depreciated. Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see accounting policy on 'Impairment'). Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment. Depreciation is calculated so as to write off the cost to residual values over the period of their estimated useful lives within the following ranges: â€¢ Freehold buildings 25 to 50 years â€¢ Leasehold land and buildings Period of lease â€¢ Plant and machinery 3-20 years h) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see above) and impairment losses (see accounting policy on 'Impairment'). Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense. The majority of leasing transactions entered into by the Group are operating leases. i) Trade and other receivables Trade and other receivables are stated at their cost less impairment losses (see accounting policy on 'Impairment'). j) Inventories Inventories are valued at the lower of cost and net realisable value. In respect of work in progress and finished goods, cost includes all direct costs of production and the appropriate proportion of production overheads. k) Long term contracts Long term contracts are stated at cost plus profit recognised to date (see accounting policy on 'Revenue') less a provision for foreseeable losses and less progress billings. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group's contract activities based on normal operating capacity. l) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. m) Impairment The carrying values of the Group's assets other than inventories (see accounting policy 'Inventories') and deferred tax assets (see accounting policy 'Income tax'), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Goodwill was tested for impairment at 1 January 2004, the date of transition to IFRS. i) Calculation of recoverable amount The recoverable amount of the Group's receivables is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration are not discounted. The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. ii) Reversals of impairment As required by IAS 36 'Impairment of Assets', any impairment loss of goodwill is non-reversible. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. n) Dividends Dividends are recognised as a liability in the period in which they are declared. o) Employee benefits i) Defined contribution pension plans Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. ii) Defined benefit pension plans Obligations under defined benefit plans are measured at discounted present value whilst plan assets are recorded at fair value. The operating and financing costs of such plans are recognised separately in the income statement; service costs are spread systematically over the lives of employees and financing costs are recognised in the periods in which they arise. Actuarial gains and losses are recognised immediately in the statement of recognised income and expense. iii) Long-term service benefits The Group's net obligation in respect of long-term service benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at balance sheet date on high quality bonds of the appropriate currency that have maturity dates approximating the terms of the Group's obligations. iv) Equity and equity-related compensation benefits The Group operates an Executive Share Option Scheme and a SAYE Share Option Scheme. For options granted on or after 7 November 2002, the fair value of the employee services received in exchange for the grant of the options is recognised as an expense each year. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. The fair value of the options is determined based on the Black-Scholes option-pricing model. At each balance sheet date, the Group revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. p) Provisions Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are valued at management's best estimate of the expenditure required to settle the present obligation at the balance sheet date. A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. q) Trade and other payables Trade and other payables are stated at their cost. r) Revenue i) Goods sold Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs, or the possible return of goods. ii) Long term contracts Income and profits on long term contracts are recognised in proportion to the value of work done on the contract after making an estimate of costs to complete and risks associated with the contract. Full provision is made for any losses in the year in which they are first foreseen. s) Net financing costs Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested, assumed returns on assets less interest on liabilities on employee benefit plans and gains and losses on hedging instruments that are recognised in the income statement (see accounting policy on 'Hedging'). Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. The interest expense component of finance lease payments is recognised in the income statement using the effective interest rate method. t) Income tax The charge for taxation is based on the profits for the year and takes into account taxation deferred because of temporary differences between the treatment of certain items for taxation and for accounting purposes. Full provision is made for the tax effects of these differences. No provision is made for unremitted earnings of foreign subsidiaries where there is no commitment to remit such earnings. Similarly, no provision is made for temporary differences relating to investments in subsidiaries since realisation of such differences can be controlled and is not probable in the foreseeable future. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. u) Non current assets held for sale and discontinued operations On initial classification as held for sale, non-current disposal groups are recognised at the lower of carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale are included in profit or loss, even for assets measured at fair value, as are gains and losses on subsequent re-measurement. A discontinued operation is a component of the Group's business that represents a separate major line of business. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. Appendix 2.1 -------------------------------------------------------------------------------------------- January 2004 opening balance sheet impact Non current assets Other Net assets -------------------------------------------------------------------------------------------- Â£m Â£m Â£m January 2004 opening balance sheet under UK GAAP 610.5 (67.5) 543.0 -------------------------------------------------------------------------------------------- IFRS2 Share-based Tax relating to payment expensing of employee share options over period between grant and vesting. 0.2 0.2 -------------------------------------------------------------------------------------------- IAS19 Employee Recognition of benefits pension deficits less associated deferred tax. (76.5) (76.5) -------------------------------------------------------------------------------------------- IAS32/39 Financial Movements arising instruments from recording financial instruments and derivatives at fair value. (1.2) (1.2) -------------------------------------------------------------------------------------------- IAS10 Events after Proposed final the balance dividend no longer 33.6 33.6 -------------------------------------------------------------------------------------------- IAS38 Intangible Capitalisation of assets certain development costs. 6.9 (2.5) 4.4 -------------------------------------------------------------------------------------------- IAS12 Income tax Classification of deferred tax assets, including additional deferred tax assets on goodwill and the pension deficit. 63.5 (28.3) 35.2 -------------------------------------------------------------------------------------------- January 2004 opening balance sheet under IFRS 680.9 (142.2) 538.7 -------------------------------------------------------------------------------------------- Opening adjustments carried forward under IFRS 70.4 (74.7) (4.3) -------------------------------------------------------------------------------------------- Appendix 2.2 -------------------------------------------------------------------------------------------- June 2004 6 months earnings impact Total profit for the EBIT* PBT * PBT period -------------------------------------------------------------------------------------------- Â£m Â£m Â£m Â£m 2004 Reported profit under UK GAAP 79.2 74.4 64.1 39.6 -------------------------------------------------------------------------------------------- IFRS2 Share-based Expensing of payment employee share options over period between grant and vesting. (0.6) (0.6) (0.6) (0.4) -------------------------------------------------------------------------------------------- IAS19 Employee Classification of benefits pension cost between operating cost and finance income. (0.8) 1.7 1.7 1.1 -------------------------------------------------------------------------------------------- IFRS3 Business Goodwill no combinations longer amortised. 10.3 9.9 -------------------------------------------------------------------------------------------- IAS32/39 Financial Movements arising instruments from recording financial instruments and derivatives at fair value. 0.3 0.3 0.2 -------------------------------------------------------------------------------------------- IAS38 Intangible Effect of assets capitalisation and amortisation of certain development costs. 1.3 1.3 0.5 0.3 -------------------------------------------------------------------------------------------- 2004 profitunder IFRS 79.1 77.1 76.3 50.7 -------------------------------------------------------------------------------------------- * Before exceptional items and intangible amortisation. Appendix 2.3 -------------------------------------------------------------------------------------------- June 2004 closing balance sheet impact Non current assets Other Net assets -------------------------------------------------------------------------------------------- Â£m Â£m Â£m 2004 Reported balance sheet under UK GAAP 587.1 (24.6) 562.5 Opening Balance Sheet adjustment 70.4 (74.7) (4.3) -------------------------------------------------------------------------------------------- IFRS2 Share-based Tax relating to payment expensing of employee share options over period between grant and vesting. 0.3 0.3 -------------------------------------------------------------------------------------------- IAS19 Employee Recognition of pension benefits deficits less associated deferred tax. (0.3) 1.8 1.5 -------------------------------------------------------------------------------------------- IFRS3 Business Goodwill no longer combinations amortised. 9.9 9.9 -------------------------------------------------------------------------------------------- IAS32/39 Financial Movements arising from instruments recording financial instruments and derivatives at fair value. 0.9 (3.0) (2.1) -------------------------------------------------------------------------------------------- IAS10 Events after Proposed final the balance dividend no longer sheet date being recognised. (11.3) (11.3) -------------------------------------------------------------------------------------------- IAS38 Intangible Capitalisation of assets certain development costs. 0.4 0.4 -------------------------------------------------------------------------------------------- IAS12 Income tax Classification of deferred tax assets, including additional deferred tax assets on goodwill and the pension deficit. (0.6) (0.6) -------------------------------------------------------------------------------------------- 2004 Reported Balance Sheet under IFRS 668.1 (111.8) 556.3 -------------------------------------------------------------------------------------------- The difference between the movement in net assets (decrease of Â£6.2m) and the movement in retained profit (increase of Â£11.1m) reflects the items booked directly to reserves, principally actuarial experience gains and losses arising on pension schemes. Appendix 2.4 -------------------------------------------------------------------------------------------- December 2004 full year earnings impact Total * * profit for PBT EBIT PBT the period -------------------------------------------------------------------------------------------- Â£m Â£m Â£m Â£m 2004 Reported profit under UK GAAP 164.6 155.4 100.7 49.3 -------------------------------------------------------------------------------------------- IFRS2 Share-based Expensing of payment employee share options over period between grant and vesting. (1.4) (1.4) (1.4) (1.0) -------------------------------------------------------------------------------------------- IAS19 Employee Classification of benefits pension cost between operating cost and finance income. (1.6) 3.5 3.5 2.4 -------------------------------------------------------------------------------------------- IFRS3 Business Goodwill no combinations longer amortised. 21.6 20.8 -------------------------------------------------------------------------------------------- Other intangible asset amortisation re 2004 acquisition. (4.2) (3.1) -------------------------------------------------------------------------------------------- IAS32/39 Financial Movements arising instruments from recording financial instruments and derivatives at fair value. 0.8 0.8 0.5 -------------------------------------------------------------------------------------------- IAS38 Intangible Net effect of assets capitalisation less amortisation of certain development costs. 2.8 2.8 1.2 0.8 -------------------------------------------------------------------------------------------- IAS12 Income tax Tax effect of foreign exchange gains on deferred tax asset (0.4) -------------------------------------------------------------------------------------------- 2004 profitunder IFRS 164.4 161.1 122.2 69.3 -------------------------------------------------------------------------------------------- * Before exceptional items and intangible amortisation. Appendix 2.5 -------------------------------------------------------------------------------------------- December 2004 closing balance sheet impact Non current assets Other Net Assets -------------------------------------------------------------------------------------------- Â£m Â£m Â£m 2004 Reported balance sheet under UK GAAP 586.0 (47.8) 538.2 Opening Balance Sheet adjustment 70.4 (74.7) (4.3) -------------------------------------------------------------------------------------------- IFRS2 Share-based Tax relating to payment expensing of employee share options over period between grant and vesting. 0.7 0.7 -------------------------------------------------------------------------------------------- IAS19 Employee Recognition of benefits pension deficits less associated deferred tax. (1.0) 7.3 6.3 -------------------------------------------------------------------------------------------- IFRS3 Business Goodwill no longer combinations amortised. 20.8 20.8 -------------------------------------------------------------------------------------------- Other intangible asset amortisation re 2004 acquisition. (3.1) (3.1) -------------------------------------------------------------------------------------------- IAS32/39 Financial Movements arising instruments from recording financial instruments and derivatives at fair value. 1.7 (5.7) (4.0) -------------------------------------------------------------------------------------------- IAS10 Events after Proposed final the balance dividend no longer sheet date being recognised. 2.6 2.6 -------------------------------------------------------------------------------------------- IAS38 Intangible Capitalisation of assets certain development costs. 0.7 0.7 -------------------------------------------------------------------------------------------- IAS12 Income tax Classification of deferred tax assets, including additional deferred tax assets on goodwill and the pension deficit. (1.4) 1.4 -------------------------------------------------------------------------------------------- 2004 Reported balance sheet under IFRS 674.8 (116.9) 557.9 -------------------------------------------------------------------------------------------- Opening adjustments carried forward under IFRS 88.8 (69.1) 19.7 -------------------------------------------------------------------------------------------- The difference between the movement in net assets (increase of Â£19.7m) and the movement in retained profit (increase of Â£20.0m) reflects the items booked directly to reserves, principally actuarial experience gains and losses arising on pension schemes. This information is provided by RNS The company news service from the London Stock Exchange IR PKQKKBBKBPCK

Companies

IMI (IMI)

Friday, 20th December 2024

COMPANIES COVERED:

SRP NMT RPI

Serco extends Thursday’s gains as upbeat mood prevails and Raspberry Pi also advances off the back of stake building news, but Neometals under pressure as it plans cancellation of AIM listing to focus on ASX.

Full Archive

UK 100

Latest directors dealings

1 day ago The Renewables Infrastructure Group Limited
1 day ago The Renewables Infrastructure Group Limited
1 day ago Smurfit Westrock (DI)
1 day ago Menhaden Resource Efficiency
1 day ago BP

All directors dealings today