Interim Results
Senior PLC
05 August 2004
Thursday 5 August 2004
Senior plc
Interim Results for the half-year ended 30 June 2004
FINANCIAL HIGHLIGHTS Notes Half-year to 30 June
--------------------- ------- -----------------------
TURNOVER FROM CONTINUING OPERATIONS £173.7m £186.9m
------------------------------------------------------------------------
OPERATING PROFIT FROM CONTINUING OPERATIONS
- BEFORE GOODWILL AMORTISATION 5 £8.2m £9.1m
- AFTER GOODWILL AMORTISATION £5.6m £6.4m
------------------------------------------------------------------------
PROFIT BEFORE TAXATION £4.1m £3.7m
------------------------------------------------------------------------
FREE CASH FLOW 5 £7.1m £10.8m
------------------------------------------------------------------------
NET BORROWINGS £57.9m £79.1m
------------------------------------------------------------------------
UNDERLYING EARNINGS PER SHARE 5 1.85p 1.77p
------------------------------------------------------------------------
INTERIM DIVIDEND PER SHARE 0.65p 0.65p
------------------------------------------------------------------------
Commenting on the results, James Kerr-Muir, Chairman of Senior plc, said:
'It is pleasing to report an increase in underlying earnings per share, a
further reduction in net debt and continued progress being made in the
development of new products, particularly in automotive. The results clearly
demonstrate a further strengthening of the Group's future prospects.'
For further information please contact:
Senior plc
Graham Menzies, Group Chief Executive 01923 714702
Mark Rollins, Group Finance Director 01923 714738
Finsbury Group
Morgan Bone/Gordon Simpson 020 7251 3801
This announcement, together with other information on Senior plc may be found
at: www.seniorplc.com
Note to Editors:
Senior is an international manufacturing group with operations in 12 countries.
Senior designs, manufactures and markets high technology components and systems
for the principal original equipment producers in the worldwide aerospace,
automotive and specialised industrial markets.
Interim Statement
In aerospace, aircraft build rates stabilised during the first half of 2004 and
market optimism edged upwards as passenger volumes began to increase. In
automotive, overall motor vehicle production remained steady with diesel engines
continuing to gain market share in Europe and overseas manufacturers again
increasing market share in North America.
Against this background, the Group delivered an improvement in underlying
earnings per share and a further reduction in net debt despite the effects of
significantly increased raw material pricing and adverse currency movements.
Lower interest costs benefited the results.
Financial Results
In the six months to June 2004, Group sales from continuing operations were
£173.7m (2003 - £186.9m) with adverse currency movements accounting for £12.2m
of the £13.2m year-on-year reduction. The average rate for the US$, in which the
majority of the Group's sales are made, was $1.82: £1 for the first half of 2004
(2003 - $1.61: £1) - a decline of 11.5%.
Operating profits from continuing operations before goodwill amortisation fell
to £8.2m (2003 - £9.1m). On a constant currency basis (i.e. using 2004 average
rates for both periods), operating profits were actually unchanged with adverse
currency movements equating to all of the £0.9m year-on-year reduction.
Operating profit is stated after charging reorganisation and redundancy costs of
£1.1m (2003 - £0.6m). The operating margin, before goodwill amortisation, of
4.7% was marginally lower than the prior year (4.9%).
At £1.5m (2003 - £2.7m), net interest costs benefited from the weakening US$,
reduced borrowings, lower interest rates and the receipt of £0.3m of interest
associated with £1.4m of tax refunded by the US tax authorities in respect of
prior years. Net interest cover, calculated on operating profit from continuing
operations before goodwill amortisation, was 5.5 times (2003 - 3.4 times).
Profit on ordinary activities before taxation for the period was £4.1m (2003 -
£3.7m) after goodwill amortisation of £2.6m (2003 - £2.7m). The underlying tax
rate was 14.9% of taxable profits (2003 - 15.6%).
Underlying earnings per share (excluding goodwill amortisation) increased by
4.5% to 1.85p (2003 - 1.77p).
Cash Flow and Borrowings
Free cash flow (cash flow from operations after net capital expenditure,
interest and tax but before acquisitions, disposals and dividend payments) was
£7.1m (2003 - £10.8m). Total cash inflow, before financing, was £3.2m (2003 -
£7.1m).
The Group continued to follow its policy of borrowing mainly in US$, as a match
for its US$ assets. Consequently, the US$ weakening to $1.83: £1 at June 2004
(June 2003 $1.65: £1; December 2003 $1.79: £1), contributed the majority of the
£3.4m beneficial impact to net debt arising from currency movements in the first
six months of 2004.
This, together with the operating cash inflows, resulted in Group net debt
declining to £57.9m at the period end (June 2003 - £79.1m; December 2003 -
£64.2m). This represents gearing, measured on shareholders' funds, of 47% (June
2003 - 64%).
Dividend
The Board has declared an unchanged interim dividend of 0.65p. This will be paid
on 26 November 2004 to shareholders on the register on 29 October 2004.
Aerospace
The sales and operating profit before goodwill amortisation of the Aerospace
Division fell to £70.0m (2003 - £76.3m) and £4.0m (2003 - £4.1m) respectively
due to the adverse effect that currency movements had on sales (£6.5m) and
operating profits (£0.4m). On a constant currency basis Divisional sales and
operating profit were each ahead of the prior period. The operating margin was
5.7% (2003 - 5.4%).
The aerospace industry began to show signs of recovery during the period. Build
rates at the Group's main customers, for both aircraft and engines, stabilised
and schedules were more reliable. The order book for the Division at the end of
the first half, at June 2004 exchange rates, was £117.4m compared to £97.3m at
June 2003. Ketema and SSP saw the biggest improvements. This 21% increase in
Divisional order book was largely due to longer schedules being issued by
customers, as a result of their greater market confidence, together with an
increase in some monthly build rates.
Divisional operating profit benefited from lower development costs on the Airbus
A380 and the Joint Strike Fighter ('JSF') and, at constant currency, was £0.3m
higher in the first half of 2004 than in the same period of 2003. This was
despite incurring redundancy costs of £0.5m (2003 - £0.3m) mainly as a result of
a reduction in work at two operations - Jet Products in the USA and Bosman in
Holland.
The other eight operations in the Division benefited from steady demand and
there were notable improved performances at Metal Bellows and Calorstat as a
result of volume increases and prior year cost reductions. SSP performed
satisfactorily during its factory rebuild and, as its factory reorganisation
comes to an end, an improvement in performance is anticipated.
The A380 is due to fly in 2005 but the JSF is still some time away. Development
costs for the A380 at BWT and Composites are now coming to an end and this
should assist the future profit performance of these two businesses. JSF
development costs, principally at Ketema and Metal Bellows, are continuing and,
as a result, the current percentage of Divisional defence content (27%) is
expected to increase in the coming years. Quotations are currently being made
for work on the new Boeing 7E7 which is due into service during 2008.
Capital expenditure for the Division, at 74% of depreciation, included the
purchase of Metal Bellows' current property.
Automotive
Automotive Divisional sales declined to £64.9m (2003 - £69.5m) due to adverse
currency movements (£3.8m) and programme losses in North America. Outside North
America, sales were collectively 10.3% ahead of the prior year in sterling
terms. Divisional operating profit before goodwill amortisation was £4.0m (2003
- £3.8m) as the steep decline in North American profitability (lower volumes and
significantly higher raw material prices) was offset by improved operating
profits elsewhere. Divisional operating margin was 6.2% for the six month period
(2003 - 5.5%).
The six-month period to June 2004 was heavily impacted by the demands of raw
material suppliers for significant price rises, notably for steel where global
demand led to a shortage in capacity. In particular, this adversely affected the
US operation which also had the burden of heavy engineering expenditure on new
programmes and products. The market place in the US has been steady but the
market share of the three domestic vehicle manufacturers (General Motors, Ford
and Daimler Chrysler) has continued to decline.
Elsewhere, the operations in the UK, Germany, France, Brazil and India each
improved their performance as a result of higher demand and the cost reductions
made in 2003. The European automotive market remained steady but very
competitive. In South Africa, the relocation to a larger factory at the
beginning of the period went smoothly and its performance improved as a result
of higher volumes and a more favourable Euro:Rand exchange rate. The operation
in the Czech Republic moved into profit following the completion of the
relocation of the water tube and air-conditioning tube product lines from
France.
Product and programme development effort continued and future capital
expenditure requirements are currently being reviewed. The continued growth of
diesel in Europe means the Group will be increasing capacity in its existing
European factories in the coming months. In the USA, significant investment will
be required to prepare for the production of new products for the heavy truck
diesel engine market, which is due to the move to common rail technology in
2007. Capital expenditure in the Automotive Division, which has risen to 53% of
depreciation in the period (2003 - 37%), is expected to be significantly higher
in 2005 and 2006.
Industrial
Of the eight operations in the Industrial Division, the two largest experienced
poor trading during the first half of the year. Pathway, in the USA, a world
leader in the manufacture of metal and fabric expansion joints, experienced raw
material price increases and a reduction in its on-site maintenance work as the
oil refiners kept producing whilst oil prices remained high. Hargreaves, a UK
based manufacturer and installer of air conditioning ducting, was adversely
affected by the decline in new commercial office build as well as the delay in
the commencement of a major contract. Both operations incurred redundancies in
the period. Elsewhere, the operation in Canada and the group of five industrial
hose companies (in an ongoing disposal process) each performed satisfactorily.
As a consequence, turnover of the Industrial Division fell slightly to £39.1m
(2003 - £41.2m) whilst operating profits before goodwill amortisation fell more
markedly, partially due to the effect of redundancies, to £0.2m (2003 - £1.2m).
International Accounting Standards
Work continues to ensure the Group is fully prepared for the implementation of
International Accounting Standards with effect from 1 January 2005. There are a
number of areas, such as financial instruments, the timing of the recognition of
dividends payable, segmental reporting and the format of the accounts
themselves, where it will be necessary to amend previously reported amounts or
disclosures, but the principal impact to the Group is expected to arise from the
adoption of IAS19 (Employee Benefits). In respect of retirement benefits, IAS19
is similar to, but not the same as, FRS17. Whilst the Group has continued to
account for retirement benefits in accordance with SSAP24, the effect on the
Group, if it had adopted FRS17, is fully disclosed in the Group's 2003 Annual
Report and Accounts. This shows, inter alia, that under FRS17 the 2003 charge to
the profit and loss account in respect of defined benefit schemes would have
been £4.1m (the actual charge under SSAP24 was £3.0m) and the total scheme
deficits at the year end, before deferred tax, were £40.7m (none are recognised
under SSAP24).
Board Changes
Richard Turner retired from the Board on 1 July 2004 having completed eight
years as a Non-Executive Director of the Company. On behalf of the Board, we
would like to thank him for his dedication and wise counsel throughout his time
with Senior.
Gordon Campbell was appointed as a Non-Executive Director on the day of
Richard's retirement. Gordon (57) is Chairman of Babcock International Group PLC
and British Nuclear Fuels plc and was formerly Chief Executive of Courtaulds
plc. He is also the Non-Executive Chairman of ITI Scotland and a Non-Executive
Director of Jupiter Split Trust plc. His significant international industrial
experience will be of great value to the Group.
Outlook
The aerospace industry is expected to continue to make a slow but steady
recovery. Airlines, whilst not universally profitable, are reporting increasing
passenger numbers as global economic and political conditions improve. The
Group's aerospace order book is continuing to strengthen.
Automotive markets are expected to continue to be stable in both the USA and
Europe although challenging market conditions are anticipated to continue,
particularly in the USA, where the three home manufacturers' market share
continues to be eroded.
New programmes and products will increasingly provide profitable future growth
for the Group. Ahead of their introduction, engineering expenditure will be
required in both aerospace and automotive. In automotive, the growth of diesel
opportunities means the Group is approaching a period of capital expenditure at
a significantly higher level than has been required in the last three years.
In addition, the Group is expected to benefit from a recovery in the remaining
industrial markets in which it participates as well as from the lower cost base
that the rationalisations, currently being effected at Pathway and Hargreaves,
will provide. The disposal of the five industrial hose businesses continues to
make encouraging, albeit slow, progress.
The Group remains committed to the strategy of operational improvement, cost and
debt management and improving the value of the Group through product and process
design and development.
As previously stated, the Group anticipates that 2004 will be the bottom of the
cycle for Senior. Accordingly, the directors view the medium-term prospects for
the Group with confidence.
James Kerr-Muir Graham Menzies
Chairman Chief Executive
4 August 2004
Senior plc
Group Profit and Loss Account
for the half-year ended 30 June 2004 (unaudited)
Notes Half-year Half-year Year
June 2004 June 2003 2003
£m £m *restated
£m
-------- -------- --------
Turnover
Continuing operations 1 173.7 186.9 354.9
-------- -------- --------
Operating profit
Continuing operations before
amortisation of goodwill 8.2 9.1 17.5
Amortisation of goodwill (2.6) (2.7) (5.4)
-------- -------- --------
Total continuing operations 1 5.6 6.4 12.1
Profit on sale of fixed assets - - 0.4
-------- -------- --------
Profit on ordinary activities
before interest and taxation 5.6 6.4 12.5
Other interest receivable
and similar income 1.0 0.5 1.2
Interest payable and
similar charges (2.5) (3.2) (6.1)
-------- -------- --------
Profit on ordinary activities
before taxation 4.1 3.7 7.6
Tax on profit on
ordinary activities 2 (1.0) (1.0) (1.9)
-------- -------- --------
Profit for the financial period 3.1 2.7 5.7
Dividends (2.0) (2.0) (6.1)
-------- -------- --------
Profit/(loss) for the period 1.1 0.7 (0.4)
-------- -------- --------
Earnings per share 3
Basic 1.01p 0.88p 1.86p
Diluted 1.00p 0.88p 1.84p
Underlying 1.85p 1.77p 3.49p
-------- -------- --------
Dividends per share 0.65p 0.65p 2.00p
-------- -------- --------
* 2003 results have been restated to reflect the adoption of the Urgent Issues
Task Force Abstract No. 38, 'Accounting for ESOP Trusts'. See Note 6 for details.
Group Balance Sheet
as at 30 June 2004 (unaudited)
30 June 30 June 31 Dec
2004 2003 2003
£m restated restated
£m £m
-------- -------- --------
Fixed assets
Intangible assets - goodwill 73.2 82.6 76.7
Tangible assets 74.8 85.4 79.1
-------- -------- --------
148.0 168.0 155.8
-------- -------- --------
Current assets
Stocks 41.8 43.5 40.1
Debtors: Amounts falling due
after more than one year 1.9 1.6 2.5
Debtors: Amounts falling due
within one year 67.5 71.5 66.9
Cash at bank and in hand 12.4 11.2 11.6
-------- -------- --------
123.6 127.8 121.1
Creditors: Amounts falling
due within one year (77.5) (106.0) (79.0)
-------- -------- --------
Net current assets 46.1 21.8 42.1
-------- -------- --------
Total assets less current
liabilities 194.1 189.8 197.9
Creditors: Amounts falling due
after more than one year (68.2) (63.4) (73.4)
Provisions for liabilities
and charges (2.6) (2.8) (2.7)
-------- -------- --------
Net assets 123.3 123.6 121.8
-------- -------- --------
Capital and reserves
Called-up share capital 30.7 30.7 30.7
Share premium 3.5 3.5 3.5
Other reserves 17.7 17.7 17.7
Profit and loss account 72.7 73.0 71.2
Investment in own shares (1.3) (1.3) (1.3)
-------- -------- --------
Equity shareholders' funds 123.3 123.6 121.8
-------- -------- --------
Reconciliation of Movements in Shareholders' Funds
for the half-year ended 30 June 2004 (unaudited)
Half-year Half-year Year
June 2004 June 2003 2003
restated restated
£m £m £m
-------- -------- --------
At beginning of period 121.8 121.1 121.1
Profit for the financial period 3.1 2.7 5.7
Dividends (2.0) (2.0) (6.1)
Currency variations 0.4 1.8 1.1
-------- -------- --------
At end of period 123.3 123.6 121.8
-------- -------- --------
Group Cash Flow Statement
for the half-year ended 30 June 2004 (unaudited)
Notes Half-year Half-year Year
June 2004 June 2003 2003
£m £m £m
-------- -------- --------
Net cash inflow from operating
activities 4a) 12.5 18.0 32.9
Returns on investments and
servicing of finance
-------- -------- --------
Interest received 1.3 0.7 1.2
Interest paid (2.5) (3.3) (6.2)
-------- -------- --------
Net cash outflow from returns on
investments and servicing of finance (1.2) (2.6) (5.0)
Taxation
-------- -------- --------
UK corporation tax (paid)/recovered - - -
Overseas tax recovered/(paid) 0.7 (1.3) (0.8)
-------- -------- --------
Net cash inflow/(outflow) from taxation 0.7 (1.3) (0.8)
Capital expenditure and
financial investments
-------- -------- --------
Purchase of tangible fixed assets (4.7) (3.5) (8.0)
Sale of property, plant and equipment 0.1 0.2 1.1
-------- -------- --------
Net cash outflow from capital expenditure
and financial investments (4.6) (3.3) (6.9)
Acquisitions and disposals
-------- -------- --------
Purchase of subsidiary
undertakings - deferred consideration (0.1) (0.2) (0.3)
Sale of subsidiary undertakings - 0.6 0.7
-------- -------- --------
Net cash (outflow)/inflow from
acquisitions and disposals (0.1) 0.4 0.4
Dividends paid on ordinary shares (4.1) (4.1) (6.1)
-------- -------- --------
Net cash inflow before financing 3.2 7.1 14.5
Financing
-------- -------- --------
New loans initiated by the Group 4b) 5.0 6.0 18.4
Repayments of existing loans 4b) (11.3) (13.2) (33.5)
Cash inflow on forward exchange
contracts 4.3 3.2 4.5
-------- -------- --------
(2.0) (4.0) (10.6)
-------- -------- --------
Increase in cash in the period 4c) 1.2 3.1 3.9
-------- -------- --------
Group Statement of Total Recognised Gains and Losses
for the half-year ended 30 June 2004 (unaudited)
Half-year Half-year Year
June 2004 June 2003 2003
restated
£m £m £m
-------- -------- --------
Profit for the financial period 3.1 2.7 5.7
Currency translation differences on
overseas net investments including
goodwill - 1.3 0.5
Tax benefits on foreign exchange
losses 0.4 0.5 0.6
-------- -------- --------
Total recognised gains and
losses relating to the period 3.5 4.5 6.8
-------- -------- --------
There is no material difference between the profits as reported and those
profits restated on an historical cost basis.
Notes to the Interim Financial Statements
for the half-year ended 30 June 2004 (unaudited)
1. Segmental Information in respect of Turnover and Operating Profit
Group turnover and operating profit are analysed below. The reconciliation of
operating profit to profit before taxation is shown on the Group Profit and Loss
Account. The reconciling items are considered to be of a Group nature, and not
directly attributable to individual segments.
a) By class of business
Turnover Operating profit
-------------------- --------------------
Half-year Half-year Year Half-year Half-year Year
June 2004 June 2003 2003 June 2004 June 2003 2003
restated
£m £m £m £m £m £m
------ ------ ------ ------ ------ ------
Aerospace 70.0 76.3 143.8 2.3 2.4 3.7
Automotive 64.9 69.5 129.6 3.7 3.4 6.7
Industrial 39.1 41.2 82.0 (0.4) 0.6 1.7
------ ------ ------ ------ ------ ------
Total 174.0 187.0 355.4 5.6 6.4 12.1
Inter-segment sales (0.3) (0.1) (0.5) - - -
------ ------ ------ ------ ------ ------
Total continuing
operations 173.7 186.9 354.9 5.6 6.4 12.1
------ ------ ------ ------ ------ ------
Operating profits shown above are stated after charging £2.6m (2003 half-year
- £2.7m; 2003 year - £5.4m) of goodwill amortisation. This is attributed to the
segments as follows:
Goodwill amortisation
-------------------------
Half-year Half-year Year
June 2004 June 2003 2003
£m £m £m
------ ------ ------
Aerospace 1.7 1.7 3.5
Automotive 0.3 0.4 0.7
Industrial 0.6 0.6 1.2
------ ------ ------
Total continuing operations 2.6 2.7 5.4
------ ------ ------
b) By geographical market
Turnover by origin Operating profit by origin
------------------------- -----------------------------
Half-year Half-year Year Half-year Half-year Year
June 2004 June 2003 2003 June 2004 June 2003 2003
restated
£m £m £m £m £m £m
------ ------ ------ ------ ------ ------
North America 90.8 105.9 198.5 2.5 5.6 10.7
United Kingdom 34.0 34.9 67.7 0.5 - (0.3)
Rest of Europe 41.2 39.3 76.0 0.9 0.2 0.5
Rest of World 11.4 9.6 18.8 1.7 0.6 1.2
------ ------ ------ ------ ------ ------
Total 177.4 189.7 361.0 5.6 6.4 12.1
Inter-segment
sales (3.7) (2.8) (6.1) - - -
------ ------ ------ ------ ------ ------
Total continuing
operations 173.7 186.9 354.9 5.6 6.4 12.1
------ ------ ------ ------ ------ ------
Operating profits shown above are stated after charging £2.6m (2003 half-year -
£2.7m; 2003 year - £5.4m) of goodwill amortisation. This is attributed to the
segments as follows:
Goodwill amortisation
----------------------------
Half-year Half-year Year
June 2004 June 2003 2003
£m £m £m
------ ------ ------
North America 1.2 1.3 2.7
United Kingdom 1.2 1.2 2.4
Rest of Europe 0.1 0.1 0.1
Rest of World 0.1 0.1 0.2
------ ------ ------
Total continuing operations 2.6 2.7 5.4
------ ------ ------
2.Tax on profit on ordinary activities for the half-year to 30 June 2004 has
been charged at 14.9% on profit before amortisation of goodwill and the effect
of the disposal of fixed assets, being the estimated rate applicable for the
year ended 31 December 2004 (2003 half-year - 15.6%; 2003 year - 14.9%), and
includes £1.0m in respect of overseas taxation (2003 half-year - £1.0m; 2003
year - £2.3m).
3.The calculations of basic earnings per share and underlying earnings per share
are shown below and have been based on the weighted average number of ordinary
shares in issue and ranking for dividend during the period.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive potential ordinary shares. The Group has only one category of dilutive
potential ordinary shares, being those share options granted where the exercise
price is less than the average price of the Company's ordinary shares during the
period.
The provision of an underlying earnings per share has been included to identify
the performance of operations before amortisation of goodwill and the effect of
the disposal of fixed assets.
Earnings per share Earnings
------------------ ------------------
Half-year Half-year Year Half-year Half-year Year
June 2004 June 2003 2003 June 2004 June 2003 2003
restated restated
pence pence pence £m £m £m
------ ------ ------ ------ ------ ------
Basic profit on ordinary
activities after taxation 1.01 0.88 1.86 3.1 2.7 5.7
Adjust:
Amortisation of goodwill 0.84 0.89 1.77 2.6 2.7 5.4
Profit arising on sale of
fixed assets - - (0.14) - - (0.4)
------ ------ ------ ------ ------ ------
Underlying earnings 1.85 1.77 3.49 5.7 5.4 10.7
------ ------ ------ ------ ------ ------
Weighted average number of shares
- basic 306.5m 306.5m 306.5m
- diluted 310.9m 307.1m 308.9m
- underlying 306.5m 306.5m 306.5m
Earnings per share
- basic 1.01p 0.88p 1.86p
- diluted 1.00p 0.88p 1.84p
- underlying 1.85p 1.77p 3.49p
4. Group Cash Flow Statement
a) Reconciliation of operating profit to net cash inflow from operating
activities
Half-year Half-year Year
June 2004 June 2003 2003
restated
£m £m £m
------ ------ ------
Group operating profit 5.6 6.4 12.1
Depreciation of tangible fixed assets 7.2 8.6 16.1
Amortisation of goodwill 2.6 2.7 5.4
(Increase)/decrease in working capital (2.9) 0.3 (0.7)
------ ------ ------
Net cash inflow from operating activities 12.5 18.0 32.9
------ ------ ------
b) New loans initiated by the Group include new draw downs under the existing
revolving credit facility. Likewise, repayments of existing loans include the
repayment of amounts previously drawn down under the same facility.
c) Analysis of net debt
At 1 Jan Cashflow Non cash Exchange At 30 June
2004 items movement 2004
£m £m £m £m £m
------ ------ ------ ------ ------
Cash 11.6 1.2 - (0.4) 12.4
Overdrafts (0.1) - - - (0.1)
------ ------ ------ ------ ------
11.5 1.2 - (0.4) 12.3
Debt due
within one year (5.8) 2.7 - 0.2 (2.9)
Debt due after
one year (71.2) 3.5 - 1.9 (65.8)
Finance leases (2.0) 0.1 (0.3) 0.1 (2.1)
Forward exchange
contract gains 3.3 (4.3) - 1.6 0.6
------ ------ ------ ------ ------
Total (64.2) 3.2 (0.3) 3.4 (57.9)
------ ------ ------ ------ ------
Debt due within one year shown above includes short-term bank borrowings of
£2.9m (1 January 2004 - £3.0m).
Forward exchange contract gains shown above are included within debtors falling
due within one year.
Non cash items represent an additional finance lease liability entered into in
the period.
5.Non Statutory Information
In the commentary on the period's results reference is made to non statutory
financial information. Such information includes:
•Operating profit before goodwill amortisation - this is used to
illustrate the underlying trading performance of the Group. The Group Profit
and Loss Account provides the information to reconcile this to operating
profit with segmental detail provided in Note 1.
•Underlying earnings per share - this indicates the overall performance of
the Group before the effects of goodwill amortisation and the disposal of
assets. Note 3 reconciles this to basic earnings per share.
•Free cash flow - this highlights the total net cash generated by the
Group prior to corporate activity such as acquisitions, disposals and
dividend payments. Free cash flow is the net cash inflow before financing of
£3.2m (2003 half-year - £7.1m; 2003 year - £14.5m), before the net outflow
from acquisitions and disposals of £0.1m (2003 half-year - £0.4m inflow;
2003 year - £0.4m inflow) and dividends paid on ordinary shares of £4.1m
(2003 half-year - £4.1m; 2003 year - £6.1m), but after all capital
expenditure, including that financed under finance leases of £0.3m (2003
half-year - £nil; 2003 year - £nil).
6.Status of Financial Information
These Interim Financial Statements, which were approved by the Board of
Directors on 4 August 2004, have been prepared in accordance with the accounting
policies set out in the Group's 2003 Annual Accounts and, in addition, reflect
the adoption of the Urgent Issues Task Force Abstract No. 38, 'Accounting for
ESOP Trusts'. Accordingly the prior period results have been restated with the
effect of its adoption on current and prior periods being £nil (2003 half-year -
£nil; 2003 year - £0.1m reduction) in respect of profits and a reduction of
£0.3m (30 June 2003 - £0.2m; 31 December 2003 - £0.3m) in net assets.
These Interim Financial Statements have not been audited or reviewed by the
Auditors.
The financial information for the year ended 31 December 2003 as set out above
does not constitute the Group's statutory accounts for the year ended 31
December 2003 but is derived from those accounts. Statutory accounts for 2003
have been delivered to the Registrar of Companies. The Auditors have reported on
those accounts; their reports were unqualified and did not contain statements
under Sections 237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
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