Final Results
Molins PLC
14 February 2002
2001 PRELIMINARY ANNOUNCEMENT
Molins PLC, the international specialist engineering company, announces its
results for the year ended 31 December 2001.
2001 2000
Full year Full year Increase
Turnover £111.3m £100.6m 11%
Operating profit (before goodwill and exceptional items) £9.4m £6.7m 40%
Profit before tax (after goodwill and exceptional items) £8.2m £5.7m 44%
Profit after taxation £7.0m £4.9m 43%
Operating cash flow £14.3m £13.3m 8%
Underlying earnings per share 39.3p 22.4p 75%
Basic earnings per share 37.1p 18.2p 104%
Dividend per share 7.5p 6.5p 15%
Highlights
• Growth in underlying earnings per share from 22.4p to 39.3p
• Tobacco Machinery underlying operating profit increased from £1.6m to
£8.5m
• Packaging Machinery improved to break even in the second half of the year
• Operating cash flow of £14.3m
• Net debt reduced from £8.7m to £2.7m
• Dividend increased by 15% to 7.5p
• Acquisition announced yesterday extends range of scientific services
Peter Byrom, Chairman, commented:
'We made good progress in 2001. We consolidated the gains made in the previous
year and developed the business for growth.
We expect to benefit this year from the closer association with our customers
and our continued commitment to high levels of service. Progressively we will
benefit also from the introduction of new products and the development of our
scientific services. We have a strong balance sheet and are well placed to make
incremental investments. We continue to evaluate opportunities as they arise.
Trading this year has started well and is in line with our expectations. We look
forward to the future with confidence.'
Enquiries: Molins PLC, Tel: 020 7638 9571
Peter Byrom, Chairman
David Cowen, Group Finance Director
Issued by: Citigate Dewe Rogerson, Tel: 020 7638 9571
Margaret George
CHAIRMAN'S STATEMENT
We made good progress in 2001. We consolidated the gains made in the previous
year and developed the business for growth.
Operating profit, before goodwill amortisation, increased from £6.7m to £9.4m,
an increase of 40%. Underlying earnings increased by 23% from £6.0m to £7.4m and
underlying earnings per share increased by 75% from 22.4p to 39.3p. Operating
cash flow was again very strong in 2001 at £14.3m.
In Tobacco Machinery, continued improvements in customer service led to
additional sales and service programmes and collaborative ventures to improve
customers' factory efficiency and product quality. Closer involvement with
customers has enabled us to launch new product development programmes which will
benefit both customers and Molins.
We have extended our capabilities at the same time as improving our operating
efficiency and flexibility. Our parts production facility in the Czech Republic,
purchased in December 2000, has developed its skills base and increased its
production levels and our Brazilian subsidiary has also increased its production
of parts. We continue to improve the performance of the specialist production
operations on the Saunderton site which remains the centre for logistics,
customer service and design and development. We have progressively released some
65,000 square feet of buildings at Saunderton on short-term leases, generating
rental income of £0.4m in 2001 and increasing to £0.9m in 2002.
Cerulean, formerly Filtrona Instruments & Automation, contributed for a full
year and met the expectations we had at the time of acquisition in October 2000.
The packaging machinery businesses have been operating in a difficult market.
The slowdown in capital spending in the USA and more recently in Europe, our
principal markets, has been compounded by the significant consolidation in our
customer base over the last year. We have reduced costs to match capacity more
closely with demand whilst maintaining resources and flexibility to expand as
the economy recovers.
In April we purchased the business of Rose Forgrove, a manufacturer of flow-wrap
machinery. This business has now been successfully integrated into our Sandiacre
facility in Nottingham and is expected to contribute to profits in the current
year.
Developments
Tobacco Machinery
We will be launching a number of new products for the tobacco machinery market
in 2002. They are designed to offer customers considerable improvements in
factory efficiency, cigarette quality and conformance measurement.
In February of this year we announced the launch of an important upgrade
available for all the 2,000 Molins MK9 making machines. The upgrade permits an
increase of making speed from 5,000 up to 6,000 cigarettes per minute and
provides modern electronic controls and interfaces.
Later this year we will be launching a new version of our market-leading Concord
cigarette handling system which allows handling of cigarettes out of the
reservoir on a 'first-in, first-out' basis. At the same time, an enhanced
version of the Pegasus filter distribution system will be launched. This machine
will feature electrical and mechanical improvements to enhance further its
status as the highest performing system on the market.
We will also launch in 2002 important additions to our Passim range of machines
of which there are some 300 installed around the world. A new hopper will be
available to handle the modern and increasingly more challenging blends of
tobacco. New electronic controls and interfaces will also become available. Our
short-term objective is to ensure that the Passim is the most economic and
productive single-track maker in the industry, whilst also maintaining its
status as the producer of the highest quality cigarettes.
Scientific services
Cerulean has announced the launch of a new range of analysis equipment which
provides an extension to the analytical capabilities of its products.
The acquisition of Arista Laboratories, which we announced yesterday, extends
the range of services we are able to offer. Arista provides a fully independent
smoke constituent analytical facility to cigarette manufacturers and regulatory
authorities. Arista was formed by Battelle Memorial Institute to meet the
regulatory driven demand for the characterisation of tobacco smoke and leaf.
Packaging Machinery
Against a background of difficult trading conditions, all of the businesses in
the division continued to develop their product ranges. Developments include a
reciprocating jawed vertical form fill and seal bagging machine at Sandiacre, a
low cost standard cartoner at Langen and enhancements to the pyramid tea bag
machines at ITCM. Our packaging machinery businesses are all now structured to
cope with lower levels of market activity but will be able to respond to
increases in demand as the market recovers. Order intake has improved in recent
months and I am pleased to report that the division is profitable at current
levels of business.
Property
As announced on 7 January this year, we are making available for development 17
acres of our Saunderton site that we have identified as being surplus to the
long-term requirements of the tobacco machinery business. We intend to retain
the remaining 9 acres as our design and development, logistics (comprising
inventory warehousing and management, and customer service) and high technology
machining facility.
Dividend
The Board has recommended a final dividend of 5.0p per share making a total of
7.5p for the year, an increase of 15% over the previous year.
Prospects
We expect to benefit this year from the closer association with our customers
and our continued commitment to high levels of service. Progressively we will
benefit also from the introduction of new products and the development of our
scientific services.
We have a strong balance sheet and are well placed to make incremental
investments. We continue to evaluate opportunities as they arise.
Trading this year has started well and is in line with our expectations. We look
forward to the future with confidence.
Peter Byrom
Chairman
14 February 2002
OPERATING REVIEW
Tobacco Machinery
The division performed strongly, reflecting the benefits of the action taken
over the last two years to improve operational efficiencies and customer
service. Sales increased to £69.4m compared with £56.7m in the previous year.
The increase in sales largely reflects a full year contribution from Cerulean
following its acquisition in October 2000. The division made an operating
profit, before goodwill amortisation, of £8.5m in the year compared with £1.6m
in 2000.
To reflect a new era for the business under Molins' ownership, Filtrona
Instruments & Automation was rebranded in June 2001 to its new name, Cerulean.
The name was chosen to portray its heritage of supplying deep blue coloured
instruments, as seen in most of the cigarette manufacturing facilities around
the world. Cerulean had a good year maintaining strong sales of its main
flagship products. These include the QTM testing modules for cigarette and
filter rod manufacture and the ASM 500, the most innovative smoking machine in
the market. Building on its pre-eminent position in these fields, it continues
to work with customers to develop further its world leading status. The business
has integrated well with Molins, which has led to further opportunities for
growth, particularly in South America and China, where Molins' existing
relationships are strong.
The main operational, development and logistics operations of the division are
controlled from Saunderton, Buckinghamshire, UK. Following a period focused on
the development of service products and performance kits, the division
concentrated in 2001 on the further development of the original equipment range
which will lead to the launch of new products in 2002. These include a new
automatic cigarette handling system and reservoir, which will be a 'first-in,
first-out' derivative of our world leading Concord cigarette handling system,
and also the development of the Pegasus filter distribution system, to be known
as Pegasus 3000. These developments keep Molins at the leading edge of design
and manufacture of handling systems and equipment.
Significant new work was undertaken in further developing Molins' cigarette
making technology. Emphasis has been placed on updating the control systems and
the rod formation process, with the objective of creating unique solutions that
will improve the manufacture of cigarettes from the increasingly more
challenging tobacco blends. Our short-term objective is to ensure that the
Passim is the most economic and productive single-track maker in the industry,
whilst maintaining its status as the producer of the highest quality cigarettes.
Development work has also been ongoing in respect of the MK9 cigarette maker
which is still one of the main workhorses of the industry. These machines
currently run at speeds of between 4,000 and 5,000 cigarettes per minute, and an
upgrade package to increase capacity to 6,000 cigarettes per minute was launched
in February 2002. This offers customers significant efficiency improvements. In
total, development expenditure in excess of £2m was spent in Tobacco Machinery
in 2001.
The original equipment business has been flat for the last few years, although
it is now showing some signs of revival as the cigarette manufacturers
re-evaluate their capital needs. Our sales in 2001 were at similar levels to the
previous year, including some particularly high margin business in the first
half. Whilst our expectations for 2002 do not lead us to believe that sales of
such equipment will be significantly higher than in 2001, the general easing in
this part of the market together with the new product offerings referred to
above, should lead to a steady increase in sales over the next few years.
The other main functions of the Saunderton site, logistics and manufacturing,
contributed significantly to the enhanced profitability of the division. Focus
was maintained through the year on improving delivery of products and service to
customers, which is leading to ever closer customer relationships and to a more
efficient organisation. This, together with the further development of
manufacturing operations in the Czech Republic and in Brazil, and sourcing of
parts through our Russian joint venture, resulted in improved margins in the
spares and service business. The high technology machining facility in
Saunderton has also performed more efficiently and contributed to the improved
performance.
The Molins Richmond operation saw sales growth in the year, mainly from
increased sales of original equipment and rebuilds to its North American
customers. In addition, a significant sale of Pegasus filter distribution
systems was made into China. Molins Richmond maintains a small assembly and
development arm, which is closely integrated with that of the Saunderton
operation.
Molins do Brasil continued to improve its operational performance and increased
its output of parts to the UK for onward sale. It maintains very close
relationships with all of the major manufacturers in South America.
Molins Far East, based in Singapore, maintained business levels in a very
competitive part of the world. Its prime focus remains on ensuring good service
delivery to its customers and, with a strong service team in that region, it
continues to perform well. It was particularly successful in 2001 in achieving a
good level of additional equipment sales, typically enhancements to Molins
machinery in customers' factories.
Molins sro, based in Plzen, Czech Republic, was a key supplier of spare parts to
the rest of the Molins organisation in 2001. This business was acquired by
Molins in December 2000 and it has steadily increased its manufacturing
capacity. It has also started the rebuilding of machines, in collaboration with
Molmac, and has established itself in a short period of time as an important
part of the Tobacco Machinery organisation.
Molmac, the main focus of the division's rebuild operations, has had an
excellent year, with both sales and profit ahead of the previous year. It
closely co-ordinates its activities with those of the other Molins operations in
the world, to ensure that the division offers the best development,
manufacturing and service solutions to its customer base.
Molins' Chinese joint venture, based in Kunming, Yunnan Province, further
established its operational credentials through the year. It reported its first
annual profit.
Overall, the division has continued to deliver improved levels of operational
efficiency and service delivery to its customers, the benefits of which are seen
through a significant increase in its operating profit. Following a number of
years of retrenchment, 2001 saw a stable level of spares sales, with evidence of
some ongoing improvements, and strong service and rebuild equipment sales. With
improved profitability on the sale of original equipment and the full year
contribution of Cerulean, the division returned an operating profit margin in
excess of 11% compared with low single digit margins in 2000. Given the
stability in business levels through 2001 and the opportunities for further
development through 2002 and beyond, the division increased the number of people
it employs for the first time in a number of years, particularly in areas of
lower cost manufacturing such as Brazil and the Czech Republic. Overall the
number of employees increased from 782 in 2000 to 830 by the end of 2001.
Packaging Machinery
The division had a difficult year, facing unfavourable market conditions in all
of its main product areas. Overall, sales in the year fell to £41.9m from £43.9m
in the previous year, although the division increased its profitability to break
even in the second half of the year.
Order intake was lower than anticipated and was rather erratic, reflecting the
relatively low level of activity from the multi-national fast moving consumer
goods companies. Typically these companies contribute a significant proportion
of the division's sales. 2002 has started with a slightly lower order book
compared with the previous year, despite a relatively high level of activity in
the second half of 2001.
Langen Packaging, based in Mississauga, Ontario, is a world leading manufacturer
of cartoning and case packing equipment. Approximately 90% of its sales are into
the North American market which suffered from the extremely difficult
conditions. Sales were significantly lower than in 2000, although 2000 benefited
from one particularly large sale in the early part of that year. Order intake
was however slightly higher than in 2000 and the business has been re-structured
significantly to ensure that its capacity is properly aligned with projected
activity levels. A major re-organisation was carried out in the summer of 2001
to reduce costs, whilst ensuring that the business maintained all of its
capabilities to innovate and deliver quality machinery and service to its
customer base. The business is well positioned to withstand the continuing
difficult market conditions while still maintaining the leading position in its
product area and the ability to grow strongly as demand increases. Langen has
continued to develop its business in South America, where co-operation with
Molins do Brasil provides added support. It is also developing a low cost
cartoner for standard cartoning requirements, which will complement Langen's
existing product range.
Langenpac, based in Wijchen, The Netherlands, is a smaller sister company to
Langen, and it too has been subject to very difficult market conditions. Its
main customer base is in continental Europe, where demand was low throughout the
year. Being relatively small, Langenpac is particularly vulnerable to low
activity levels. It has taken steps to reduce its cost base to match capacity
more closely with current demand. Langenpac has been leading a co-ordinated
approach with Langen to develop a new generation cartoner, which will be
launched in the first half of the current year. We expect this product to
enhance Langenpac's presence in the European market.
Sandiacre, based in Nottingham, UK, a manufacturer of vertical form fill and
seal bagging equipment, also faced difficult market conditions and overall its
sales levels were lower than in 2000. Although the UK and the US remained
relatively strong, significantly reduced sales in continental Europe affected
the overall result. Margins remain under pressure, particularly in continental
Europe. Sandiacre's product range has been significantly enhanced over the last
18 months, culminating in the launch of a new reciprocating bagging machine in
2001. The new machine has enjoyed early success and provides Sandiacre with the
most complete range of vertical form fill and seal bagging equipment in the
market.
Despite the market outlook in Packaging Machinery, we took the opportunity in
April last year to acquire certain assets of Rose Forgrove Limited, a company in
receivership, for £1.1m. Rose Forgrove is a world leader in the manufacture of
flow-wrapping machinery, which is often specified on the same production lines
as cartoning machinery, as supplied by Langen and Langenpac. The Rose Forgrove
operation has been moved into the Sandiacre factory in Nottingham and the
integration has gone well. The business has manufactured several of each of the
three main machine types and delivered them on time at the high standards of
quality expected of these products, reflecting the successful transition of the
business. Rose Forgrove's machines cover a broad spectrum of applications; the
high end, hermetic sealing capability of the Integra; the mid-range Minerva, one
of the most successful flow-wrapping machines ever produced; and the lower end
highly robust and efficient Merlin. The Rose Forgrove operation did not
contribute to profit in 2001, during the integration period, but we do expect it
to contribute in the current year.
ITCM, based in Coventry, UK, increased both sales and profit during 2001,
despite the difficult market and financial environment. During the year it
delivered extra machines to meet the increased demand for the PG Tips Pyramid
Tea Bag and further adapted machines to enable the tea bag to be launched into
the 'out of home' market, a project undertaken in conjunction with Sandiacre.
Machines for manufacturing pyramid tea bags with string and tag were also
supplied in the year. Considerable development work has been carried out on tea
bag machinery to enable product enhancements. This is expected to result in
demand for machine conversion and new machinery in the near future.
Significant progress has been made at ITCM in establishing partnerships within
the pharmaceutical industry, resulting in the development and manufacture of
machines to increase capacity and to reduce operational costs. Work has also
continued in the personal products and security printing industries, with the
supply of equipment and services to enable product changes and gain additional
business. These activities demonstrate the complete range of services offered by
ITCM.
Cerulean is also active in the packaging machinery market, with its tube
packing, can strapping and filter packing machinery. Sales of these machines
were in line with expectations.
The division suffered a sharp reversal in its profitability levels in 2001. We
have addressed this by reducing the capacity and the cost base in Langen,
increasing activity levels in Sandiacre following the purchase of Rose Forgrove
and extending the product range that the division can offer. In reducing
capacity levels we have ensured that we retain all of the technical, commercial
and manufacturing capabilities necessary to increase the levels of business as
the market improves. All of the businesses in the division remain committed to
innovation and to market and product leadership in their fields. Whilst the
order outlook for 2002 remains subdued, the businesses are in a position to
deliver a profit on the expected reduced sales levels.
FINANCIAL REVIEW
Reflecting the progress made in 2001, underlying earnings per share increased in
the year to 39.3p, from 22.4p in 2000, an increase of 75%. Underlying earnings
increased from £6.0m to £7.4m. Operating cash flow was strong, with a £14.3m
inflow.
Operating results
The trading performance of the Group is discussed in the Operating review. In
summary, turnover increased by 11% to £111.3m reflecting a full year
contribution from Cerulean, purchased in October 2000. Turnover in the Tobacco
Machinery division increased by 22% to £69.4m, while in Packaging Machinery the
difficult market conditions led to a decrease in turnover of 5% to £41.9m. The
operating profit for the year was £9.4m before a goodwill charge of £0.4m (2000:
£6.7m before goodwill of £0.1m and an exceptional charge of £1.0m). The
operating profit of Tobacco Machinery after goodwill amortisation was £8.1m
(2000: £1.5m) and the operating loss of Packaging Machinery was £1.7m (2000:
£2.4m profit). The net pension credit contributed a further £2.6m (2000: £2.7m)
to operating profit.
Acquisitions
Certain assets of Rose Forgrove Limited, a company in receivership, were
purchased in April 2001 for £1.1m. The assets purchased were primarily inventory
and work in progress and included intellectual property rights. No goodwill
arose on this acquisition. On 13 February 2002, we announced that Molins had
agreed to purchase Arista Laboratories Inc., an independent smoke constituent
analytical laboratory based in Richmond, Virginia, for £2.7m, with a further
£0.5m payable on certain performance criteria being achieved. Arista reported
sales of $1.9m in its first full year of operations and is expected to show
significant growth in the current year.
Property
In January 2002 we announced plans to develop 17 acres of land at Saunderton,
the site of our main Tobacco Machinery operation. It is planned to produce
300,000 sq. ft. of modern office accommodation in a landscaped business park.
Wilks Head & Eve, Chartered Surveyors, have estimated the value of the 17 acres
at £13.2m on an open market basis, increasing to £22.5m if the development
profits accrue to Molins. The land and buildings which the Company plans to
retain have been valued by Wilks Head & Eve at £6.5m on an existing use basis.
This amount is approximately equivalent to the present carrying value of the
whole site in the books of the Company. Some of the existing buildings on the
area for re-development are currently being let on short-term leases. These
leases produced rental income of £0.4m in 2001. Rental income is expected to
increase to £0.9m in 2002.
Interest and taxation
Net interest expense in 2001 was £0.8m, compared with net interest income in
2000 of £0.1m. The charge reflects the increased borrowings taken on by the
Group consequent to its acquisition programme and share buy-backs in 2000. The
2001 Group taxation charge was £1.2m (2000: £0.8m), giving an effective rate of
taxation on profit of 14.6% (2000: 14.0%). Tax losses brought forward in the UK
are now much reduced, reflecting the significant improvements made in
profitability in the UK. We expect that the Company will become tax paying on
current year trading profits in the UK.
Earnings per share
Underlying earnings per share, based on profit for the financial year before
goodwill and exceptional items, amounted to 39.3p (2000: 22.4p), an increase of
75%. Basic earnings per share amounted to 37.1p (2000: 18.2p). Diluted earnings
per share amounted to 35.9p (2000: 17.9p).
Dividend
The Board recommends the payment of an increased final dividend of 5.0p (2000:
4.0p), which together with the interim dividend of 2.5p makes a total for the
year of 7.5p (2000: 6.5p), an increase of 15%. The dividend is covered nearly
five times by basic earnings per share.
Share purchases
During the year the Company purchased 1,350,000 (2000: 11,255,025) of its own
shares for cancellation, representing 6.4% of the issued share capital
outstanding at the beginning of the year. The aggregate cost, including fees,
was £2.0m (2000: £14.2m) and the average price at which the shares were
purchased was 147.5p. Shares in issue at 31 December 2001 were 19,875,459 (2000:
21,223,612).
Average shares in issue in the year, excluding those held in trust for the
benefit of certain employees, were 18,577,664 (2000: 26,307,293).
Cash treasury and funding activities
Group net debt at the end of 2001 amounted to £2.7m (2000: £8.7m). Net cash
inflow from operating activities was £14.3m (2000: £13.3m). Working capital
reduced in the year by £4.9m (excluding the effect of the pension prepayment)
largely reflecting a reduction of £4.0m in inventory (excluding acquisitions)
and an increase in customer deposits from £6.6m to £8.0m.
Operating cash inflow was offset by net capital expenditure of £2.1m, the
acquisition of Rose Forgrove for £1.1m, interest paid of £0.7m, taxation of
£0.8m and the purchase of own shares for cancellation of £2.0m. Dividends of
£1.3m were paid in the year.
There were no significant changes during the year in the financial risks to
which the business is exposed and Group treasury policy has remained unchanged.
The Group does not trade in financial instruments and enters into derivatives
(principally forward foreign exchange contracts) solely for the purpose of
minimising currency exposures on sales or purchases not in the functional
currencies of its various operations.
The Group has maintained bank facilities to meet its short-term funding
requirements. Committed facilities, which in the UK have recently been renewed
to an expiry date in 2005, are subject to covenants covering net worth, gearing
and interest cover. Any draw-down against facilities is as an individual
contract, and the interest rate is determined for the duration of the contract
based on prevailing bank base rates. Short-term overdrafts and borrowings are
utilised within the Group to meet local cash requirements. These are typically
denominated in local currencies. Foreign currency borrowings are used to hedge
investments in overseas subsidiaries where appropriate.
Pension valuations
The triennial valuations of the UK Pension Fund and Scheme were carried out as
at 30 June 2000 and adopted by the Company for the 2001 financial year. The Fund
and the Scheme were merged in 2000 and the actuary has reported that the
combined fund is adequately funded. The Company does not expect to contribute to
the combined fund in the foreseeable future.
Reporting standards
The transitional disclosures required by FRS 17 Retirement benefits will be
shown in the Group's statutory accounts for the year ended 31 December 2001.
When fully adopted the standard requires, inter-alia, the value of any surplus
or deficit held by the Group's pension funds to be shown within the balance
sheet of the Group, net of a full deferred tax provision. The effect of FRS 17
would have been to increase the value of reported shareholders' funds. In
respect of the profit and loss account the requirement of FRS 17, when adopted,
will be to charge to operating profit the normal pension cost and to credit to
net interest the net return on the assets and liabilities of the scheme. This
contrasts with SSAP24 Accounting for pension costs, under which the net pension
credit is credited to operating profit.
Shareholders' funds
Group shareholders' funds at 31 December 2001 were £61.4m (2000: £58.1m). Profit
in the year of £7.0m was offset by dividends of £1.4m and the purchase of own
shares for cancellation of £2.0m.
Group profit and loss account for the year ended 31 December
2000
Before
2001 exceptional Exceptional
Total items items Total
£m £m £m £m
Notes Note 6
Turnover - continuing operations 3 & 4 111.3 100.6 - 100.6
Cost of sales (75.8) (73.1) - (73.1)
Gross profit 35.5 27.5 - 27.5
Distribution costs (9.7) (6.2) - (6.2)
Administrative expenses (16.8) (14.7) (1.0) (15.7)
Operating profit - continuing operations 3 & 5 9.0 6.6 (1.0) 5.6
Net interest (payable)/receivable (0.8) 0.1 - 0.1
Profit on ordinary activities before
taxation 8.2 6.7 (1.0) 5.7
Taxation (1.2) (0.8) - (0.8)
Profit for the financial year 7.0 5.9 (1.0) 4.9
Dividends (including non-equity) (1.4) (1.3) - (1.3)
Retained profit for the year 5.6 4.6 (1.0) 3.6
Underlying earnings per ordinary share 39.3p 22.4p
Basic earnings per ordinary share 37.1p 18.2p
Diluted earnings per ordinary share 35.9p 17.9p
Interim dividend paid October 2.5p 2.5p
Proposed final dividend 5.0p 4.0p
Total dividend 7.5p 6.5p
The calculations of earnings per share are based on the following weighted
average number of shares :
Underlying and basic - 18,577,664 (2000: 26,307,293). Diluted - 19,196,422
(2000: 26,887,080).
Group balance sheet as at 31 December
2001 2000
Note £m £m
Fixed assets
Intangible assets - goodwill 8.3 8.7
Tangible assets 20.9 22.2
Investments 3.9 4.1
33.1 35.0
Current assets
Stocks 23.1 26.2
Debtors - due within one year 22.7 23.6
Debtors - due after more than one year 5 22.1 19.2
Cash and short-term bank deposits 2.4 1.9
70.3 70.9
Creditors - amounts falling due within one year
Borrowings (3.0) (2.0)
Other creditors (32.5) (32.4)
Proposed dividend (0.9) (0.8)
(36.4) (35.2)
Net current assets 33.9 35.7
Total assets less current liabilities 67.0 70.7
Creditors - amounts falling due after more than one year
Borrowings (2.1) (8.6)
(2.1) (8.6)
Provisions for liabilities and charges (3.5) (4.0)
Net assets 61.4 58.1
Capital and reserves
Called up share capital 5.9 6.2
Share premium account 25.6 25.6
Revaluation reserve 5.7 5.7
Capital redemption reserve 3.9 3.6
Profit and loss account 20.3 17.0
Shareholders' funds (including non-equity interests) 61.4 58.1
Net debt (2.7) (8.7)
Net assets per ordinary share 304p 270p
Group cash flow statement for the year ended 31 December
Notes 2001 2000
£m £m
Net cash inflow from operating activities 7 14.3 13.3
Returns on investments and servicing of finance (0.7) 0.1
Taxation (0.8) 0.8
Capital expenditure (net) (2.1) (0.6)
Acquisitions and disposals (1.1) (13.0)
Equity dividends paid (1.3) (1.8)
Net cash inflow/(outflow) before management of
liquid resources and financing 8.3 (1.2)
Management of liquid resources 8 0.1 0.9
Financing 9 (8.6) (7.4)
Decrease in cash in the year (0.2) (7.7)
Reconciliation of net cash flow to movement in net (debt)/funds for the year
ended 31 December
2001 2000
£m £m
Decrease in cash in the year (0.2) (7.7)
Cash inflow from movement in liquid resources (0.1) (0.9)
Cash outflow/(inflow) from decrease/(increase) in debt and lease
financing 6.6 (8.3)
Change in net (debt)/funds resulting from cash flows 6.3 (16.9)
Translation movements (0.3) -
Movement in net (debt)/funds in the year 6.0 (16.9)
Net (debt)/funds at 1 January (8.7) 8.2
Net debt at 31 December (2.7) (8.7)
Statement of total recognised gains and losses for the year ended 31 December
2001 2000
£m £m
Profit for the year 7.0 4.9
Currency translation movements arising on foreign
currency net investments (0.3) 0.4
Total recognised gains for the year 6.7 5.3
Notes to preliminary announcement
1. The Group's accounts have been prepared in accordance with applicable
accounting and financial reporting standards.
2. The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 December 2001 and 2000 but is
extracted therefrom. The Group's statutory accounts for 2001 will be sent to
shareholders by 11 March 2002. The Group's statutory accounts for 2001 and
2000 each received an unqualified auditors' report.
3. Segmental analysis for the year ended 31 December
Turnover Operating profit Net assets
2001 2000 2001 2000 2001 2000
£m £m £m £m £m £m
By activity :
Tobacco Machinery 69.4 56.7 8.1 1.5 33.2 35.0
Packaging Machinery 41.9 43.9 (1.7) 2.4 9.0 12.6
111.3 100.6
Net pension credit/
prepayment 2.6 2.7 21.9 19.2
Exceptional items (note 6) - (1.0)
Operating profit 9.0 5.6 64.1 66.8
Net debt (2.7) (8.7)
Net assets 61.4 58.1
4. Turnover by geographical destination of goods for the year ended 31 December
2001 2000
£m % £m %
United Kingdom 17.2 15 12.8 13
Continental Europe 21.4 19 18.6 18
North America 32.0 29 37.1 37
Asia 25.4 23 16.1 16
Rest of world 15.3 14 16.0 16
111.3 100 100.6 100
5. Operating profit includes a net pension credit of £2.6m (2000: £2.7m).
Debtors due after more than one year includes a pension fund prepayment of
£21.9m (2000: £19.2m)
6. The exceptional item of £1.0m in 2000 relates to the settlement of a long
running claim for unpaid royalty fees, the cessation of a partially customer
funded development contract at Langen Packaging and the profit on sale of a
property in Peterborough.
7. Reconciliation of operating profit to net cash flow from operating activities
2001 2000
£m £m
Operating profit 9.0 5.6
Amortisation of goodwill 0.4 0.1
Depreciation 2.7 3.2
Other movements 0.8 -
Movements in exceptional items :
- charges in the year - 1.0
- cash movements on charges in the year - 2.8
- cash movements on restructuring and rationalisation
provisions (0.8) (3.4)
Working capital movements :
- stocks 4.0 8.6
- debtors 0.4 7.5
- pension fund prepayment (2.7) (2.9)
- creditors and other provisions 0.5 (9.2)
Net cash inflow from operating activities 14.3 13.3
Cash flows from exceptional items excluding tax effect (0.8) (0.6)
Other cash flows 15.1 13.9
Net cash inflow from operating activities 14.3 13.3
8. Management of liquid resources
Management of liquid resources includes movements in cash deposits which
do not fall within the definition of cash for the purposes of FRS 1 Cash
flow statements (revised).
9. Financing
2001 2000
£m £m
Purchase of own shares for cancellation (2.0) (14.2)
Purchase of own shares for long term incentive plan - (1.5)
Debt due after more than one year: (decrease)/increase in borrowings (6.6) 8.3
(8.6) (7.4)
This information is provided by RNS
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