Final Results
Radstone Technology PLC
14 June 2004
For immediate release 14 June 2004
RADSTONE TECHNOLOGY PLC
Preliminary Results
Radstone Technology, the world's leading independent supplier of
high-performance, embedded computer products for defence and aerospace
applications today announces preliminary results for the year ended 31 March
2004.
Key Points
• New orders received during the year totalled £66.7m a 50% increase on
the previous year producing a £79.3m record order book.
• Normalised Earnings per share * up 9% to 20.50p (2002 : 18.77p)
• Group Profit before tax, goodwill and exceptional items increased 17%
to £7.4m (2003: £6.3m)
• UK facilities rationalised and upgraded. Including the successful
completion of a new purpose built freehold facility within Towcester
completed on schedule and to budget in early May and the EMS business moved
into a new facility in Milton Keynes
• A record 17 new product introductions in the Embedded Computing
business.
• Promising sales contribution from our acquisition of ICS Ltd in
September 2003 - £4.3m attributable to ICS.
• Final dividend of 2.25p per share increasing the total dividend by 50%
to 3.0p (2003: 2.0p).
* Calculated after adjusting profit after tax for the effect of goodwill
amortisation and exceptional items.
Jeff Perrin, Chief Executive commenting on the results said:
"We are very pleased to announce these results. Not only have we fulfilled a
number of major milestones in terms of our strategic development, but we have
also seen our profits grow for the seventh successive year.
Our order book ended the year at a record level giving us a solid platform for
the future and confidence in the continued growth and development of the company
going forward."
For further information:
Radstone Technology 01327-359444
Jeff Perrin, Chief Executive Web: http://www.radstone.co.uk
Kevin Boyd, Group Finance Director
Buchanan Communications 020 7466 5000
Tim Thompson or Nicola Cronk Email : nicolac@buchanan.uk.com
Chairman's Statement
for the year ended 31 March 2004
The past twelve months have been a period of substantial change within Radstone
and one in which there has been a steep decline in the value of the US dollar,
the most important trading currency for the Group. It is an indication of the
strength in depth and quality of the employees within the Group that these
changes were well managed leading to an improved financial performance.
We made good progress in the year both on the trading front and in the Group's
strategic development. Group profit before tax, goodwill and exceptional items
(see calculation in note 4) recorded its seventh successive year of improvement,
increasing by 17% to £7.4m from £6.3m last year. The major development in the
year was the acquisition of Interactive Circuits and Systems Ltd (ICS) based in
Ottawa, Canada.
Turnover of £43.7m (2003: £48.5m), reflected the non-recurrence of a significant
automotive test equipment contract in the Electronic Manufacturing Services
(EMS) business and the effect of the weak US dollar in the Embedded Computing
business. These negative factors were partially offset by the inclusion of the
ICS acquisition for approximately half the period under review.
During the year the decision was made to close our EMS facility at Hawarden and
concentrate resources in our plant at Milton Keynes. This resulted in an
exceptional cost in the year of £3.5m. Following the exceptional costs, the
post tax profit was £1.3m (2003: £4.3m).
Once again cash flow was strong, with £9.1m generated from operations in the
year.
The large exceptional item lowered the basic earnings per share under FRS14 to
5.00p (2003: 17.98p), by contrast normalised earnings per share (see calculation
in note 1) increased by 9% to 20.50p (2003: 18.77p).
New orders received during the year to 31 March 2004 totalled £66.7m, a 50%
increase over last year.
The order book ended the year at a record level of £79.3m, (2003: £62.7m), up
26% despite the effect of a £7.8m currency devaluation adjustment due to the
weak US dollar.
Dividend
In light of the underlying performance and prospects of the Group, your board is
recommending a final dividend of 2.25p per ordinary share, giving a dividend of
3.0p for the year, which represents an increase of 50%. This will be paid on 29
September to shareholders on the register on 10 September 2004.
New Product Development
With development expenditure of £4.5m at record levels, the period proved to be
a strong one for new product introductions, ensuring that Radstone retains its
technological leadership in its marketplace.
Acquisition
In September 2003 we completed the acquisition of ICS based in Ottawa, Canada,
for a total consideration of £21m. ICS designs and manufactures real-time data
acquisition sub-systems for radar, sonar, communications and signal intelligence
applications. This is a major step in the Group's strategy and will enable us
to provide defence customers with a complete set of system functions from sensor
data acquisition through to display controllers.
The business is currently performing in line with our expectations and I would
like to welcome the employees of ICS to the Radstone Group.
Facilities
In July 2003 our Towcester based EMS business moved into a specialised and
upgraded 31,000 sq. ft. leasehold facility in Milton Keynes, well suited to high
added value surface mount assembly. The move was well planned and executed,
with just one and a half working days lost to production. Following the closure
of the Hawarden facility, manufacturing assembly facilities have been
consolidated at our Milton Keynes site.
Construction of a new purpose built 75,000 sq. ft. freehold facility within
Towcester commenced in August 2003. This will house the Radstone Group's
headquarters and the Embedded Computing business and will replace our Towcester
facility at Water Lane, which is being sold for a cash consideration of £4.1m.
The new, fully integrated, state-of-the-art facility will greatly enhance our
capacity and efficiency. Construction was completed on schedule and to budget
in early May 2004. Our own internal fit-out took a further three weeks and we
relocated in early June, with minimal disruption to production.
Board and Management
As previously announced, Dr Charles Paterson retired from the position of Group
Managing Director on 10 September 2003, having led the company with vision and
drive for the past 15 years. We wish him a long and healthy retirement.
Jeff Perrin, who was Finance Director of the Group for 14 years, succeeded him.
Kevin Boyd joined the company in March 2003 and was appointed Group Finance
Director on 10 September 2003, succeeding Jeff Perrin.
In April 2004, Sir Alan Thomas joined the board as a non-executive director.
His general business experience and specific knowledge of the defence industry
will be a great asset to the Group.
Outlook
Our Embedded Computing business is strongly placed to build on its technical
leadership in the rugged embedded computing market. Although the precise timing
of specific defence programmes cannot be controlled, we believe demand for
rugged, high performance embedded computing products continues to grow due to
the increased requirement for battlefield digitisation.
The long-term order book and the increasing investment in product development,
provides an excellent foundation for the next stage of our growth.
Operations Review
Embedded Computing
2004 2003
£'000 £'000
Total sales (all external) 33,181 31,969
Gross profit 19,602 17,265
Contribution (Note 2) 10,046 8,481
In September 2003, Radstone acquired ICS Ltd, a Canadian company based in
Ottawa. The company designs and manufactures real-time data acquisition and
analogue to digital conversion products. This acquisition enables Radstone to
market a more complete product offering to customers in the radar, sonar,
communications and signal intelligence markets.
Sales for the Embedded Computing business included £4.3m attributable to ICS.
The continuing weakness of the US dollar, the unit's main trading currency,
negated any organic growth in sterling terms. Over the last two financial years
the US dollar has declined by almost 30% against sterling.
The phasing of shipments followed a similar pattern to previous years, with a
strong delivery performance in Quarter 3 and Quarter 4. Excluding ICS, 58% of
shipments occurred in the second half of the year, compared with 60% in 2003.
In our main US market, sales of £20.6m (excluding ICS) reached record levels
despite the weak US dollar, showing organic growth in US Dollars of 22%.
Including the ICS sales, US deliveries of £23.3m represented 53% of Group sales
compared with 38% in 2003. Major US programme deliveries were MLRS (Harris
Corporation), Firefinder (Northrop Grumman), ATFLIR (Raytheon Systems), ADCAP
(Raytheon Systems) and RAM (Raytheon Systems).
The production programme for tranche 1 of the Eurofighter project was completed
by 31 March 2003 and with no further deliveries in 2004, this was the major
contributor to a decline in UK sales.
Sales to the Far East were £2.0m less than in 2003, which had the benefit of a
$2.5m contract which did not recur during 2004.
Gross profit increased to £19.6m compared with £17.3m last year (+14%), largely
due to the additional gross profit from ICS of £2.1m. The effect of our
currency hedging protected the profits and cash flows of the original embedded
computing business from the weakening US dollar. This currency hedging
contributed to an increased gross profit margin of 59.1% in 2004 from 54.0% in
2003 and 50.0% in 2002.
Contribution improved to 30.3% of sales (2003: 26.5%), for the same reasons.
We had a record year for new product introductions, with no fewer than seventeen
being introduced to the market over the twelve month period. Examples include
the new RT-4 rugged computer system targeted at space conscious avionics
applications and the G4DSP-X designed for high performance signal processing.
The G4DSP-X delivers a major performance improvement over the existing G4DSP
product, which is now in production for the US Navy's ADCAP torpedo programme.
The G4DSP-X is the most technologically advanced board that Radstone has
developed, with four 1GHz processors interconnected by an 800MByte/sec PCI-X
bus. It is ideally suited for demanding applications such as software radio,
radar and C4ISR (Command, Control, Communication, Computers, Intelligence,
Surveillance and Reconnaissance). It is already designed into two major US Navy
programs, one for shipboard radar and the other for laser based mine detection.
When coupled with the ICS-572 transmit/receive interface board it also provides
an ideal platform for many software radio applications.
Electronic Manufacturing Services (EMS)
2004 2003
£'000 £'000
Total sales 11,327 7,315
Sales to Embedded Computing (787) (790)
External sales 10,540 16,525
Gross profit 1,392 1,555
Contribution 1,114 1,245
In July 2003 the Towcester unit was transferred to a modern 31,000 sq. ft.
facility in Milton Keynes. The move was professionally managed, with the
minimum of disruption to customers. Production finished on Thursday evening 3
July 2003 at Towcester and by the following Monday the first electronic boards
were being assembled at Milton Keynes.
At the time of our interims, we stated that we would be conducting a review of
our EMS business, with the objective of improving its efficiency and
contribution to the Group. On 24 November 2003 the results of the review were
announced. It was concluded that the Group's entire EMS activity should be
consolidated at our new facility in Milton Keynes, which has the capacity to
handle significantly increased demand. This resulted in the closure of our
Hawarden facility at a cost of £0.6m and a write down of the unamortised
goodwill of £2.9m.
The EMS business is now a more efficient and tightly focused unit, targeting
customers that require small to medium batch sizes of complex electronic
assemblies.
Our Milton Keynes operation was the first manufacturer to be awarded the BSI
Kite Mark IPC-A-610C, which is the industry accepted workmanship criteria for
electronics assemblies. We were awarded the highest level of approval within
this standard.
Sales to the major UK defence system integrators, which represent approximately
10 % of deliveries, were a similar proportion to last year. Most of the
activity in the year was for commercial customers involved in industrial
control, test and measurement, civil surveillance, electronic displays and
electronics for motor sports. There are some early indications of a slight
improvement in the commercial electronics market that has remained depressed for
over two years.
Third party sales at £10.5m were £6.0m below last year, principally reflecting
the non-recurrence of the majority of a £7m contract for assembly and test of an
automotive diagnostic product. As expected, approximately £5m of this order was
not repeated during 2004 and sales to this customer during the year were £2.3m.
The gross profit of £1.4m represented a decrease of £0.2m over last year,
principally due to the non-recurrence of the low margin automotive test
equipment order. This did, however, result in increased gross margins of 12.3%
up from 9.0% in 2003.
Despite a sales reduction of £6.0m, the higher margin deliveries partially
compensated for this loss, which resulted in the contribution being just £0.1m
below last year. The contribution percentage thereby improved from last year's
7.2% to 9.8%.
Orders
The order book at 31 March 2004 totalled a record £79.3m, an increase of 26% in
sterling terms from the £62.7m achieved in 2003.
Since the greater part of the Group order book results from orders originally
denominated in US dollars, it has been adversely affected by the decline in the
US currency. Over the past two years our order book has been devalued by £14.6m
due to the US dollar's decline, £7.8m of this in the year just ended.
New orders received within the year were similarly affected by currency. Gross
new orders booked at constant exchange rates totalled £66.7m in 2004,
representing a 50% increase over 2003 (2003: £44.4m). Excluding our recent
acquisition ICS, gross order intake would show a 38% increase at £61.2m.
UK orders for the Group totalled £30.8m, producing a 60% increase compared with
the previous year. This increase is mainly attributable to the receipt within
Embedded Computing of a £14m multi-year production contract. Deliveries on this
contract will not begin until January 2006 and will cover three financial years.
Orders from mainland Europe of £1.6m and the Far East of £0.9m were at a
depressed level declining by £3.4m and £1.2m respectively.
The USA had another excellent year for new orders received with bookings of
£32.4m; this excludes the currency adjustment of £7.8m. Excluding US bookings
for ICS Ltd, new US orders received grew by 50%.
The largest US order was for $41m on a multi-year production programme for
delivery over the next seven years.
Order intake for the EMS business, which is all UK and Ireland based, declined
by £4.2m due to the reduced requirement from the large automotive test equipment
contract mentioned earlier.
Financial Review
Overview
Group sales of £43.7m comprised £33.2m from the Embedded Computing division and
£10.5m from EMS. Embedded Computing benefited from sales of £4.3m from ICS, the
Canadian subsidiary acquired in September, but suffered a reduction of £2.7m in
constant dollar terms due to the fall in the US dollar which averaged 1.75 in
the year compared with 1.56 in the prior year. In a difficult market and
without the benefit of the one-off automotive test equipment contract described
last year, EMS turnover was down 36%.
While turnover suffered from the weak dollar, gross margins were protected due
to the Group's hedging policy which secured absolute gross profit and boosted
percentage gross margins from 38.8% last year to 48.0%.
The effect of hedging, excluding natural hedges, added approximately £2.1m to
the gross profit of Embedded Computing. This helped increase margins from 54.0%
last year to 59.1%. Stripping out the effects of currency, the margin in
Embedded Computing increased to 55.7% due to lower component prices in the first
half of the year and an increasing proportion of sales for rugged products. ICS
produced a gross margin of 49.4% in its seven months with the Group.
Within the EMS business gross margins improved from 9.0% to 12.3% due to the
non-recurrence of the low margin automotive test equipment contract.
Gross profits increased by £2.2m. Expenditure on development, sales, marketing
and administration increased by £1.1m with the result that operating profit
(before goodwill amortisation of £0.8m) increased by £1.1m to £7.8m, a 17%
improvement. This represented an operating profit before goodwill of 17.8% of
sales, compared to 13.7% last year.
EBITDA (see note to the consolidated cash flow statement) at £9.6m was 14.4%
above last year. The first half of the year generated £2.3m and the second half
£7.3m; compared to £1.8m and £6.6m respectively.
Exceptional charges in the year relate to the closure of the Group's Hawarden
facility that was announced in November. The charge of £3.5m consists of £2.9m
for the write off of goodwill and £0.6m for redundancy and closure costs.
Interest costs of £0.4m were just £0.1m more than last year, despite £8.8m spent
to date for the freehold land and construction of our new premises in Towcester
and increased borrowings taken on to finance the acquisition of ICS of £10.0m.
The tax charge of £1.8m represented 57% of the pre-tax profit compared to 30% in
2003. This percentage has been detrimentally affected by the non deductibility
of goodwill. Excluding the effect of goodwill the tax rate was 24% in 2004 and
30% in 2003. The charge benefited in the year from a reduction due to a claim
for a Research and Development Tax Credit.
The basic earnings per share (FRS14) were 5.0p (2003:17.98p). The normalised
earnings per share (see calculation in note 1) were 20.50p, a 9% increase
compared to last year.
Cash flow
Cash flow from operating activities was £9.1m compared to £12.7m last year.
After deducting net interest and tax payments of £0.4m and £2.9m respectively
and all forms of capital expenditure (excluding construction of the new
property) of £1.7m, free cash flow amounted to £4.1m. From the free cash flow a
dividend of £0.7m was paid and stage payments of £8.8m on the construction of
the new building. This resulted in a cash outflow of £5.4m before acquisitions
and financing.
The payment, net of cash acquired, for the acquisition of ICS, including costs,
of £16.8m, was financed by £10.7m from the proceeds of a placing and open offer
and the balance by a new medium term loan. Up to a further C$10.0m is payable,
C$5.0m in January 2005 and C$5.0m in January 2006 if ICS meets the provisions of
an earn out clause, which requires it to grow gross profits by a compound 20%
over the two years to September 2005.
In addition £8.5m was drawn down from a committed facility of £10.5m to finance
the construction of the Group's new facility in Towcester.
The combined effects of this additional borrowing resulted in the Group ending
the year with net debt of £12.7m compared with a net cash balance of £0.6m at
the same time last year.
Investment
The cost of the new facility in Towcester was £8.8m in the year and it is
estimated that a further £2.7m will be spent in the coming year to complete and
fit-out the building.
Underlying capital expenditure (excluding the new building) was a net £1.7m
compared with £1.9m in 2003.
Company funded development expenditure amounted to £4.5m (2003: £3.9m),
representing 13.6% of sales for the Embedded Computing business (2003: 12.3%).
Consistent with the Group's established policy, all product development was
charged directly to the profit and loss account.
Liquidity
Net debt of £12.7m equates to gearing of 39% compared to net cash last year and
20% at the half year. Current and quick ratios were 2.3 and 1.7 respectively,
compared to 2.4 and 1.6 last year. Interest was covered 19.8 times compared to
20.0 times last year. The total dividend for the year is covered 1.5 times (5.5
times excluding exceptionals) compared to 8.9 times last year.
The Group seeks to reduce financial risk and to ensure sufficient liquidity is
available to meet foreseeable needs. Our policy is to maintain a balance
between continuity of funding and flexibility through the cost-effective use of
borrowings with a range of maturities.
Performance
Normalised earnings per share, (see calculation in note 1), which is indicative
of underlying performance, grew by 9% to 20.50p (2003: 18.77p).
The return (being operating profit before goodwill - see note to the cash flow
statement) on average capital employed fell from 27.6% to 23.0% due to the
effect of the inclusion of stage payments for the new building within net
assets. Return (being profit after tax excluding tax affected exceptional costs
of £3.2m) on opening equity of 20.8% was below last year's 23.0%.
Treasury
With a substantial percentage of revenue in United States dollars, hedging
foreign exchange fluctuations against this currency is recognised by the
directors as a key responsibility. While this exposure is naturally hedged by
purchases of components in US dollars and the local costs of our US operations,
there still remains a net exposure to be hedged. The prudent use of various
financial instruments minimises this vulnerability to the volatility of the rate
of exchange to the US dollar.
At 31 March 2004 there were £1.8m of unrealised net gains on 79 forward foreign
currency contracts and options (2003: £0.3m of net gains) covering US dollars.
None of these was recognised at the balance sheet date. All unrealised net
gains are expected to be dealt with in the profit and loss accounts for the
periods ending 31 March 2005 and 31 March 2006.
Since unrealised gains or losses are calculated by marking to market forward
foreign currency contracts and options, that in themselves are used to calculate
foreign currency prices for our products, the off-set for these unrealised
amounts is the sales which will result from the physical delivery of these
products.
Translation exposure arising on the consolidation of the Group's US and Canadian
assets is hedged by use of US and Canadian dollar loans in the UK parent
company. The net effect of these are taken directly to reserves as allowed
under SSAP20, ensuring that only trading transaction gains and losses on foreign
exchange are represented in the profit and loss account.
Any differences in the contingent consideration due to the ICS earn-out will be
dealt with as an adjustment to Goodwill.
The interest rate exposure on the US dollar, Canadian dollar and Sterling loans
are managed by a number of interest rate swaps.
Consolidated Profit & Loss Account
for the year ended 31 March 2004
Notes Continuing Acquisition 2004 2003
£'000 £'000 £'000 £'000
Turnover 39,379 4,342 43,721 48,494
Cost of sales (20,529) (2,198) (22,727) (29,674)
Gross profit 18,850 2,144 20,994 18,820
Administration costs
Administration (3,391) - (3,391) (3,083)
Development (4,337) (188) (4,525) (3,942)
Goodwill (186) (620) (806) (186)
Total administration costs (7,914) (808) (8,722) (7,211)
Distribution costs - sales and marketing (4,740) (569) (5,309) (5,152)
Operating profit 6,196 767 6,963 6,457
Exceptional cost on closure of operation (3,508) -
Net interest payable (393) (332)
Profit on ordinary activities before taxation 3,062 6,125
Taxation (1,759) (1,866)
Profit for the financial year 1,303 4,259
Dividends (842) (477)
Retained profit for the year 461 3,782
Basic earnings per share 1 5.00p 17.98p
Normalised earnings per share 1 20.50p 18.77p
Diluted earnings per share 1 4.97p 17.86p
Statement of total recognised gains and losses
£'000 £'000
Profit for the financial year 1,303 4,259
Exchange rate adjustment (461) (217)
Total gains recognised relating to the year 842 4,042
There is no material difference between the profit reported above and that
calculated on the historical cost basis.
Turnover and expenses all relate to continuing operations.
Balance Sheets
at 31 March 2004
Group Company
As As
restated restated
Notes 2004 2003 2004 2003
Fixed assets £'000 £'000 £'000 £'000
Goodwill 20,613 3,100 - -
Intangible assets 76 57 76 57
Total intangible assets 20,689 3,157 76 57
Tangible assets 15,350 5,997 10,337 1,529
Investments - - 26,492 6,865
36,039 9,154 36,905 8,451
Current assets
Stocks 9,266 9,450 - -
Debtors falling due after more than one year - - 151 151
Debtors 13,870 13,248 6,158 6,243
Cash at bank and in hand 9,150 4,406 17,096 11,382
32,286 27,104 23,405 17,776
Creditors: amounts falling due within one year
Bank and other borrowings 2,733 939 1,400 -
Other creditors 11,112 10,420 4,681 6,040
13,845 11,359 6,081 6,040
Net current assets 18,441 15,745 17,324 11,736
Total assets less current liabilities 54,480 24,899 54,229 20,187
Creditors: amounts falling due after
more than one year
Bank and other borrowings 19,134 2,904 18,051 1,353
Other creditors 2,066 - 2,066 -
Provisions for liabilities and charges 366 234 6,221 366
21,566 3,138 26,338 1,719
Net assets 32,914 21,761 27,891 18,468
Capital and reserves
Called up share capital 3,503 2,982 3,503 2,982
Share premium account 19,962 9,519 19,962 9,519
Revaluation reserve 218 218 218 218
Merger reserve 199 - 199 -
Profit and loss account 9,386 9,386 4,363 6,093
Own shares (354) (344) (354) (344)
Equity shareholders' funds 3 32,914 21,761 27,891 18,468
Consolidated Cash Flow Statement
for the year ended 31 March 2004
2004 2003
£'000 £'000
Operating activities
Net cash inflow from operating activities 9,056 12,676
Returns on investments and servicing of finance
Interest received 160 18
Interest paid (447) (219)
Interest paid on finance leases (83) (116)
(370) (317)
Taxation
UK Corporation tax paid (1,673) (1,703)
Overseas tax paid (1,222) -
(2,895) (1,703)
Capital expenditure and financial investment
Purchase of tangible fixed assets (10,470) (1,810)
Proceeds from disposal of tangible fixed assets 10 4
Purchase of intangible fixed assets (55) (63)
(10,515) (1,869)
Acquisitions and disposals
Purchase of subsidiary undertaking (16,797) -
Costs of terminating subsidiary activity (125) -
(16,922) -
Equity dividends paid (689) (238)
Net cash (outflow)/inflow before financing (22,335) 8,549
Financing
Issue of ordinary share capital 10,593 15
Purchase of own shares (230) (109)
Proceeds from disposal of own shares 220 -
10,583 (94)
New loans 18,289 -
Repayment of loans (556) (500)
Repayment of loan notes (281) -
Repayment of principal under finance leases (490) (496)
16,962 (996)
27,545 (1,090)
Increase in cash 5,210 7,459
Note to the Consolidated Cash Flow Statement
Reconciliation of operating profit to net cash
inflow from operating activities
Operating profit 6,963 6,457
Amortisation of goodwill 806 186
Operating profit before goodwill 7,769 6,643
Amortisation of intangible fixed assets 36 56
Depreciation of tangible fixed assets 1,792 1,687
Ebitda 9,597 8,386
(Profit)/loss on disposal of tangible fixed assets (2) 80
Decrease in stocks 962 2,323
Decrease in debtors 1,017 1,881
(Decrease)/increase in creditors (2,518) 6
Net cash inflow from operating activities 9,056 12,676
Notes:
1 Earnings per share
2004 2003
pence pence
per share per share
Basic earnings per share 5.00 17.98
Normalised earnings per share 20.50 18.77
Diluted earnings per share 4.97 17.86
The calculation of basic and diluted earnings per share is based on the profit
for the year after tax of £1,303,000 (2003: £4,259,000). Normalised earnings
per share is calculated after adjusting profit after tax for the effect of
goodwill amortisation and exceptional items and is more indicative of
underlying performance. The reconciliation of basic to normalised earnings per
share is as follows:
2004 2003
pence pence
per share per share
Basic earnings per share 5.00 17.98
Goodwill written off 3.10 0.79
Exceptional item 12.40 -
Normalised earnings per share 20.50 18.77
The weighted average number of shares in issue during the year used in the
calculation of earnings per share is as per the following table:
2004 2003
'000 '000
Weighted average for year - basic and normalised earnings per share 26,041 23,683
Calculation of shares under option per FRS14 202 160
Weighted average for year - diluted earnings per share 26,243 23,843
2 Segmental information
The analysis by geographical area of destination of the Group's turnover, all of
which relates to continuing operations, is set out below:
2004 2003
£'000 £'000
United Kingdom 12,975 22,474
Rest of Europe 4,881 3,146
USA 23,336 18,651
Rest of World 2,529 4,223
43,721 48,494
Class of business
The Group operates in two classes of business being Embedded Computing and
Electronic Manufacturing Services. An analysis of the trading performance and
net assets of each class of business is detailed below.
Embedded Electronic Manufacturing
Computing Services Total
2004 2003 2004 2003 2004 2003
£'000 £'000 £'000 £'000 £'000 £'000
Turnover
Total sales 33,181 31,969 11,327 17,315 44,508 49,284
Inter-segment sales - - (787) (790) (787) (790)
External sales 33,181 31,969 10,540 16,525 43,721 48,494
Cost of sales (13,579) (14,704) (9,148) (14,970) (22,727) (29,674)
Gross profit 19,602 17,265 1,392 1,555 20,994 18,820
Operating costs
(excluding goodwill
and central overheads) (9,556) (8,784) (278) (310) (9,834) (9,094)
Contribution 10,046 8,481 1,114 1,245 11,160 9,726
Administration cost -
goodwill (620) - (186) (186) (806) (186)
Exceptional item - - (3,508) - (3,508) -
9,426 8,481 (2,580) 1,059 6,846 9,540
Administration cost -
central (3,391) (3,083)
overhead
Net interest payable (393) (332)
Profit before taxation 3,062 6,125
Segmental net assets 13,781 10,339 3,063 6,717 16,844 17,056
Central net assets 29,719 5,196
Current and deferred
taxation (931) (1,470)
Net obligations under (931) (1,054)
finance leases
Loan notes (736) -
Cash, bank loans and
overdrafts (11,051) 2,033
Net assets 32,914 21,761
Central overheads have not been allocated between the classes of business as to
do so would be impracticable and misleading.
Geographical segment
In the directors' opinion, the disclosure of segmental information for turnover,
profit before taxation and net assets by origin, would be seriously prejudicial
to the interests of the Group. As a consequence, this information in its
entirety has not been disclosed as permitted by SSAP25.
3 Reconciliation of movements in consolidated shareholders' funds
2004 2003
£'000 £'000
Profit for the financial year 1,303 4,259
Dividends paid and proposed (842) (477)
Exchange rate adjustment (461) (217)
New share capital subscribed 11,348 15
Costs of acquisition of subsidiary undertaking (384) -
Merger reserve arising on acquisition of subsidiary company 199 -
Purchase of own shares (230) (109)
Disposal of own shares 220 -
Net movement in shareholders' funds 11,153 3,471
Opening shareholders' funds 21,761 18,290
Closing shareholders' funds 32,914 21,761
The opening shareholders' funds at 1 April 2003 as previously reported amounted
to £22,105,000 before the restatement of £344,000 on adoption of UITF abstract
38 Accounting for ESOP trusts.
4. Normalised Profit Before Tax
2004 2003
£'000 £'000
Profit on ordinary activities before taxation 3,062 6,125
Goodwill 806 186
Exceptional item 3,508 -
Group profit before tax, goodwill & exceptional items 7,376 6,311
5. The comparative figures for the year to 31 March 2003 do not constitute full
accounts within the meaning of Section 240 of the Companies Act 1985. Full
accounts for that period, which received an unqualified audit report and did not
contain a statement under Section 237(2) or Section 237(3) of the Companies Act
1985, have been delivered to the Registrar of Companies. The financial
information set out in the preliminary statement of results for the year ended
31 March 2004 does not constitute statutory accounts within Section 240 of the
Companies Act 1985. The Group's statutory accounts for the year ended 31 March
2004 have not yet been filed with the Registrar of Companies. The Company's
auditors have issued an unqualified report on those financial statements. Their
report contains no statement under Section 237(2) or Section 237(3) of the
Companies Act 1985.
6. This preliminary announcement is prepared on the basis of the accounting
policies as stated in the financial statements for the year ended 31 March 2003,
amended by the adoption of UTIF abstract 38 Accounting for ESOP Trusts.
7. Copies of the 2004 Report and Accounts will be sent to shareholders in due
course. Further copies will be available from the registered office of Radstone
Technology PLC, Tove Valley Business Park, Towcester, Northants NN12 6PF.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 5th July 2024
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