Final Results
Severfield-Rowen PLC
03 April 2007
3 April 2007
2006 Full Year Results
RECORD PROFIT, EXCELLENT PROSPECTS
Severfield-Rowen Plc, the market leading structural steel group, announces its
full year results to 31 December 2006.
£m 2006 2005 Change
Revenue 295.1 236.7 + 24.7%
Operating profit 29.1 19.3 + 50.8%
Profit before tax 30.3 19.7 + 54.1%
Basic earnings per share 102.54p 66.39p + 54.5%
Dividend per share 57.0p 37.0p + 54.1%
Highlights
• Record pre-tax profit of £30.3m increased by 54.1%
• Operating margin increased to 9.9% (2005: 8.2%)
• Profit before tax margin increased to 10.3% (2005: 8.3%)
• Dividend increased by 54.1%
• Gross cash balance of £38.3m up 27.1%, buoyed by a net cash inflow of
£8.2m
• All core businesses performed strongly
• Strong order book of £207m, plus a very high level of future contract
prospects
• 2007 commenced ahead of Board's expectations
Commenting on the results, Peter Levine, Chairman said:
'Severfield-Rowen had a very strong year and the Group's prospects are
excellent.
'Our markets remain robust and demand for structural steelwork projects,
particularly larger projects, continues to be significant.
'We have started the current year with trading ahead of the Board's expectations
and we are confident of further success in 2007.'
Enquiries
Severfield-Rowen Plc
Peter Levine, Chairman 07802 312249
Peter Davison, Finance Director 01845 577 896
Financial Dynamics
Richard Mountain/Susanne Walker 020 7269 7291
CHAIRMAN'S STATEMENT
Introduction
The Group performed very well in 2006, with all of our core businesses
delivering record results.
The resultant financial strength of Severfield-Rowen underlines our confidence
in the Group's long-term growth prospects.
Overview
In 2006 operating profit increased by 50.8% to £29.1 million (2005: £19.3
million) on increased revenue of £295.1 million (2005: £236.7 million). The
operating margin increased to 9.9% (2005: 8.2%).
Profit before tax was 54.1% higher at £30.3 million (2005: £19.7 million)
producing, after the tax charge of £9.4 million (2005: £6.1 million), a 54.5%
increase in basic earnings per share of 102.5p (2005: 66.4p). The profit before
tax margin increased to 10.3% (2005: 8.3%).
Net assets increased to £66.2 million (2005: £55.2 million) with a gross cash
balance at the year end of £38.3 million (2005: £30.1 million), reflecting a net
cash inflow of £8.2 million.
The Group retains its dominant position in the structural steel industry and is
involved in many significant projects and flagship developments.
We are particularly pleased that each of the Company's core subsidiaries namely
Severfield-Reeve Structures, Watson Steel Structures, Rowen Structures and Atlas
Ward Structures, contributed record results.
Dividend
With the record results announced today and the strength of our financial
position, the Directors are pleased to announce a 54.1% increase in the full
dividend for the year to 57.0p per share which is covered 1.8 times by earnings.
The final dividend is 37.0p per share (2005: 24.5p) payable on 18 June 2007 to
shareholders on the register on 11 May 2007.
Board Changes
John Severs, our Group Managing Director, intends to retire from the Board this
year. John was one of the founders of Severfield-Rowen, and was fundamental in
creating and shaping the Group.
He will continue as a consultant to the Group for a three year period after his
departure and his mentoring and experience will greatly assist the new
management team in taking the Group forward.
I am delighted to announce that Tom Haughey will be appointed as Chief Executive
Officer and Peter Emerson will become Chief Operations Officer following John's
departure, thus ensuring a smooth management transition. Tom and Peter have
been Main Board Directors of Severfield-Rowen since 2002 and 1998 respectively
and, with complementary skill sets have, over the years, made significant
contributions to the Group.
On behalf of all shareholders, management and colleagues, I would like to thank
John for his tireless leadership and we all wish him the best in his retirement.
On 26 September 2006, it was announced that Geoff Wright had joined the Board as
a non-executive director and details of this were set out in our 2006 Interim
Results Statement.
Employees
The consistent achievements of the Group are a tribute to our management and
workforce. They are pivotal to the success of our Group and the Directors'
sincere gratitude is owed to them.
Outlook
The Group's prospects are excellent. Our markets remain robust and demand for
structural steelwork projects, particularly larger projects, continues to be
significant.
We have started the current year with trading ahead of the Board's expectations
and we are confident of further success in 2007.
Peter Levine
Chairman
3 April 2007
OPERATIONAL REVIEW
Core Business Overview
In 2006 the core businesses of the Group, Severfield-Reeve Structures, Watson
Steel Structures, Rowen Structures and Atlas Ward Structures, each produced
record results ahead of our expectations at the time of the interim results.
They were again well supported by Steelcraft Erection Services.
Severfield-Reeve Structures
Once again, the business continued to achieve outstanding production
efficiencies. Contracts were undertaken in a wide variety of areas and on a
number of projects including:
• Ongoing retail development opposite BBC Television Centre, White
City, London
• Office development at No.1 Coleman Street, London
• Redevelopment and enlargement of the Pollok retail centre in Glasgow
• Retail and residential development in the Princesshay area of Exeter
• Retail development at the Grand Arcade, Wigan
• Creation of an international centre for book conservation at the
British Library, London
• Development of a new plaster calcination and milling facility for
British Gypsum at East Leake, Leicestershire
• New data centre for Morgan Stanley in Croydon
• New printing facility for News International in Broxbourne,
Hertfordshire
• Concert hall, arts venue and office development with unique rippling
glass facade at Kings Place, London
• Office development using the innovative Corus Bi-Steel Core at One
Basinghall Avenue, London
The current year has commenced well. New significant contracts include:
• Continuing specialist development of oil pipeline carrying racks on
Sakhalin Island, Russian Federation
• First ever inner city Ikea store on Queen Victoria Road, Coventry
• Extension to the Shires shopping centre in Leicester
• Retail, leisure and residential centre Eagles Meadow, Wrexham
• Retail development at the Broadmead Shopping complex in Bristol
• New 1200 bed Hospital development at Queen Elizabeth Medical centre,
Edgbaston, Birmingham
• Development of the learning disability treatment and assessment
centre in Kirklands Hospital, Bothwell, Lanarkshire
• Mixed use retail and residential development at Livingston near
Edinburgh
• New Hospitals in Glasgow, Pontefract, Wakefield, and Salford
Capital investment at the Dalton site continued in 2006 with almost £5 million
being invested in further improvements to the production facilities. This
included the building and equipping of a third intumescent paint line, together
with the purchase and extension of another production line building used
primarily for the fabrication involved in carrying out smaller volumes of work
such as contract variations. This type of work was previously sub-let to an
external sub-contractor. A small amount of land was also acquired to facilitate
the movement of steel on the site.
Watson Steel Structures
Watson's expertise in the specialised steelwork sector was reinforced in 2006
with a number of successful project completions covering a broad spectrum of the
construction industry.
Contracts performed in 2006 included:
• Ongoing works at Heathrow Airport Terminal 5 for BAA plc
• Arena and Conference Centre at Kings Waterfront, Liverpool
• Link bridge at Terminal 3, Heathrow Airport for BAA plc
• South East Pier in Edinburgh Airport for BAA plc
• Two new grandstands at Aintree Racecourse
• Steelwork for O2 Arena and Waterfront in London
• Finnieston Bridge arching the river Clyde, Glasgow
New contracts for 2007 include:
• Ongoing works at Heathrow Airport Terminal 5 for BAA plc
• Redevelopment of Wimbledon Centre Court
• Underground ticket hall at Kings Cross Station
• Second phase of the Darwin centre at the Natural History Museum
• Development of luxury residential apartments in Hyde Park, London
• UBS sponsored academy in Hackney
• Terminal extension at Stansted airport
• The regeneration of Paradise Street, Liverpool
• Waste to energy plant at Colnbrook near Heathrow
Rowen Structures
Rowen Structures continued to play a key role in the development of the airport
sector in the UK whilst enjoying success in other sectors of the market.
As well as the management of the BAA airport work, contracts undertaken by Rowen
in 2006 included:
• Retail and leisure development at the Eagle Centre, Derby
• Office and retail development at Piccadilly, London
New contracts for 2007 include:
• Office development in Piccadilly, Manchester
• Landmark office development at 30 Crown Place, London
• Silken Hotel and apartments at the east end of the Strand, London
• Central London office development at Holborn Circus
Atlas Ward Structures
2006 saw Atlas Ward further develop its position as the market leader in the
design and build sector of the industry. In addition to delivering steel to
provide in excess of 10 million sq ft of floor area into the distribution and
warehouse sector, projects were successfully completed in both the educational
and major retail sectors.
The £5 million capital expenditure programme to update the production facility
was completed in 2006. This, combined with the highly skilled and motivated
workforce, has resulted in improved efficiency whilst maintaining the high level
of service to all clients.
Contracts for 2006 included:
• New Ikea store at Ashton-under-Lyme near Manchester
• Rebuilding of the Monkhill Confectionery Popcorn Factory in
Pontefract
• Lex Autos car components distribution centre in Chorley
• Rebuilding of a TNT distribution centre in Lutterworth
• New Tesco distribution centre in Donabate, Dublin
New Contracts for 2007 include:
• New headquarters for the West Midlands Fire Brigade
• Second phase of Aylesbury Higher Education College
• Tesco distribution centres in Livingston, Edinburgh and Goole,
Humberside
• Regional distribution centre in Doncaster for Asda
Steelcraft Erection Services
Steelcraft, our dedicated steel erection service, continued to provide
invaluable support to the Group.
The outstanding results reflect its effective management under Peter Ellison,
the Managing Director, and close working relationship with other members of the
Group.
Severfield-Reeve Projects
2006 was a successful year for Severfield-Reeve Projects, our design and build
project management company, with revenue reaching a record level of £19 million.
Two of the company's largest contracts to date were completed. These were
Thirsk Rural Business Centre for Thirsk Farmers Auction Mart for £5.2 million
and the Belmont House Nursing Home, Harrogate for Lincare at £5.1 million. Both
of these jobs performed to budget and programme and proved to be fine examples
of the benefits of Projects' unique approach to DesignBuild.
The order book for 2007 is very encouraging and management is currently
investigating various new lines of business and new contacts. New key members
of staff have recently been recruited.
The Directors look forward to a busy 2007 with optimism.
Steel UK Limited
This partnership with Murray Metals Group has been of significant assistance to
the Group in the sourcing of steel with the pricing and other benefits coming
through during 2006.
Summary
The Group produced a record performance in 2006 and is on course for another
year of progress in 2007, underpinned by an excellent order book of £207 million
and a very high level of future contract prospects.
Enquiry levels remain robust throughout the Group against a background of
buoyant industry demand.
This year I intend to retire from the Group as a full-time executive.
As one of the founders of Severfield-Rowen, I have seen the Group grow to become
the major force in the industry that it is today.
Over the last 30 years I have thoroughly enjoyed my time with the Group. I have
worked with some great characters within the Construction Sector, including
clients and colleagues, some of which I know will be lifelong friends.
I would like thank my Board colleagues, superb management, employees and
shareholders for their support for both myself and Severfield-Rowen.
I leave my executive role knowing that in my Board colleagues Tom Haughey and
Peter Emerson, in whom I have the utmost confidence, the future is in very safe
hands and the outlook for the Group is better than I have ever known.
I am looking forward to my retirement and spending time with my family, but I am
pleased that I will be on hand in the future, in a long-term consulting
capacity, to guide and give assistance to the Group.
I am confident that Severfield-Rowen will continue on its successful path.
John Severs
Managing Director
Financial Review
2006 was a strong year and I am pleased to report that the Group's results for
the year show another significant improvement with revenue, profit before tax,
earnings per share, dividends per share and the year end gross cash position all
reaching record levels for the third successive year.
Revenue of £295.08 million and profit before tax of £30.29 million and have
increased 24.7% and 54.1% respectively over the figures achieved in 2005.
Basic earnings per share of 102.54p increased 54.5% over 2005. Consequently, it
is recommended that the total dividend for the year is increased by 54.1% to 57p
per share, giving a dividend cover of 1.8 times.
It is particularly pleasing that the year ended with the Group having an
excellent gross cash balance of £38.30 million and net funds of £38.24 million.
Net assets increased by 20.0% to £66.23 million.
Revenue
Group revenue increased by 24.7% to a record level of £295.08 million, helped by
the first full year of trading by Atlas Ward, following its acquisition in March
2005.
Operating Profit
The Group's operating profit increased by 50.8% to £29.12 million with operating
margins, expressed as a percentage of revenue, continuing to increase to 9.87%
from the 8.15% achieved in 2005.
These figures continue to incorporate the Group's two associated companies,
Kennedy Watts Partnership Limited and Fabsec Limited, of which the Group owns
25.1% and 25% respectively. The Group's operating profit for the year includes
its share of these two companies' results which amounted to a net profit of
£10,000 (2005: loss £1,000).
Net interest receivable for the Group amounted to £1,168,000 (2005: £349,000),
producing a profit before tax of £30.29 million, an increase of 54.1% over the
previous year. Margins, at this level, expressed as a percentage of revenue,
increased to 10.26% (2005: 8.30%).
Taxation
The tax charge of £9.37 million represents an effective tax rate of 30.92%
compared with 31.23% in the previous year. These effective rates are higher
than the prevailing rate of 30% due to the adjustments made in respect of
disallowable expenditure incurred during the year.
Earnings per Share
Basic earnings per share was at a record level of 102.54p, an increase of 54.5%
over the previous year. This calculation is based on the profit after tax of
£20.92 million and 20,401,969 shares, being the weighted average number of
shares in issue during the year.
As there were no share options outstanding at the year end the diluted earnings
per share is the same as the basic calculation.
Dividend
The Board will be recommending a final dividend of 37.0p per share (2005:
24.50p) at the Company's Annual General Meeting on 7 June 2007 bringing the
total dividend for the year to 57.0p per share. This total dividend represents
a 54.1% increase over the total dividend of 37.0p per share paid for 2005. This
is in line with the basic earnings per share increase and maintains the total
dividend cover at 1.8 times earnings, a level at which the Board remains
comfortable and at which it remains confident of maintaining in the future.
The final dividend will be paid on 18 June 2007 to shareholders on the register
on 11 May 2007. The ex-dividend date will be 9 May 2007.
Balance Sheet
The Group's balance sheet continues to strengthen with shareholders' funds
increasing by £11.02 million to £66.23 million. This equates to a net asset
value per share at 31 December 2006 of 324.6p, compared with 270.6p at the end
of 2005.
The Group's balance sheet now has property, plant and equipment totalling £43.60
million. Depreciation charged in the year amounted to £4.24 million. This
figure is higher than in previous years due, in part, to the fact that during
the year the depreciation rates applied in respect of plant and machinery
changed from the reducing balance method to a straight line basis as it is
considered more appropriate given the useful economic life of the assets. The
effect of this change was to increase depreciation charged in the year by
£828,000.
We continued to invest heavily in our business with capital expenditure in the
year of £13.01 million. This is a particularly high level of annual expenditure
for the Group with the total cost of the investments including; production
facilities at Severfield-Reeve Structures - £4.82 million, production facilities
at Atlas Ward Structures - £5.19 million, mobile cranes for use on sites - £1.02
million and motor vehicles/vans - £1.28 million. Expenditure in 2007 is
budgeted to be approximately £6 million
The value of Goodwill on the balance sheet of £6.73 million is primarily the
result of the acquisition of the Atlas Ward group of companies in 2005. It is
included as an Intangible Fixed Asset and continues to be subject to an annual
impairment review under IFRS 3. Given the excellent performance of Atlas Ward
in the year no impairment has been considered necessary.
Other Intangible Assets on the balance sheet, amounting to £1.61 million,
represents the capitalisation of the Group's costs in the development of a
pedestal mounted powered work platform for use on sites in the erection of
steel, which we hope to bring into use during 2007.
Unlike the rest of the Group, Atlas Ward has a defined benefit pension scheme
which, although now closed to new members, had a book value deficit of £6.38
million as at 31 December 2005. At 31 December 2006, as a result of changes
made to the assumptions used in calculating pension scheme assets and
liabilities, the deficit increased to £7.29 million and is shown as a liability
in the Group balance sheet with the movement largely going through the Statement
of Recognised Income and Expense as permitted under IFRS.
Associated Companies
During 2001 the Company acquired a 25% shareholding in Fabsec Limited, a company
involved in the development of a bespoke and fire engineered beam made out of
plate. This company holds the master intellectual property rights for these and
the other Fabsec family of beams the world over. It also carries out marketing
promotion and provides technical support. The Group benefits from these
functions whilst contributing 25% towards overheads. Fabsec Limited is not to
be confused with the Group's successful and profitable plate and intumescent
paint lines at Dalton which produce the Fabsec and fire engineered beams under a
perpetual no royalty licence from Fabsec Limited.
Investment in Fabsec Limited continued in 2006 by way of licence fees paid of
£275,000. Loans outstanding to the Group by Fabsec as at 31 December 2006
amounted to £614,000 (2005: £614,000). However, the Board is of the opinion
that there may be an element of doubt over the collection of this loan in the
short to medium term future and continues to hold a provision of £543,000
against this debt.
Fabsec continues to be involved in technical and market development and the
results for the year to 31 December 2006 showed a small loss. The Group's 25%
share of this loss amounted to £10,000 (2005: £6,000).
The Group also owns a 25.1% shareholding in Kennedy Watts Partnership Ltd, a
company involved in CAD/CAM steelwork design. The Group's share of the profit
of Kennedy Watts for the year amounted to £20,000 (2005: £5,000) resulting in a
net profit arising from the associated companies of £10,000 (2005: loss £1,000).
Cash Flow
Management of the Group's cash has always been of prime importance to the Board
and this remains the case with cash being tightly controlled. It is
particularly pleasing, therefore, to report that the Group ended the year with a
record positive cash balance of £38.30 million (2005: £30.13 million).
During the year £35.49 million was generated from operations.
Outflows of cash during the year included dividends paid of £9.08 million,
corporation tax paid of £6.34 million and the purchase of property, plant and
equipment, net of sale proceeds, of £12.09 million.
Borrowings, representing amounts due on hire purchase contracts, will be repaid
in full during 2007 and amounted to £0.06 million leaving the Group with a net
funds surplus of £38.24 million and, therefore, no gearing.
Treasury
Group treasury activities are managed and controlled centrally. Risks to assets
and potential liabilities to customers, employees and the public continue to be
insured. The Group maintains its low risk financial management policy by
insuring all significant trade debtors.
The treasury function seeks to reduce the Group's exposure to any interest rate,
foreign exchange and other financial risks, to ensure that adequate and cost
effective funding arrangements are maintained to finance current and planned
future activities and to invest cash assets safely and profitably.
The Group remains committed to strong financial controls, cash management and
appropriate accounting and treasury policies.
Summary
The Group had a very successful year with revenue, profit before tax, earnings
per share and dividends per share once again reaching record levels.
Cash generation continued to be very strong where, in spite of significant
outgoings on tax, dividends and particularly capital expenditure totalling
£28.43 million, the net funds of the Group increased by £8.54 million to £38.24
million.
The Group has continued to improve its healthy financial position and is well
placed for future growth and cash generation.
Peter Davison
Finance Director
Consolidated Income Statement
For the year ended 31 December 2006
Year ended Year ended
31 December 2006 31 December 2005
£000 £000
Continuing Operations
Revenue 295,084 236,722
Cost of sales (261,148) (212,100)
Gross profit 33,936 24,622
Other operating income 79 63
Distribution costs (877) (784)
Administrative expenses (4,030) (4,597)
Share of results of associates 10 (1)
Operating Profit 29,118 19,303
Investment income - interest 1,250 459
Finance costs - interest (82) (110)
Profit before tax 30,286 19,652
Tax (9,365) (6,137)
Profit for the period attributable to the equity 20,921 13,515
holders of the parent
Earnings per share:
Basic 102.54p 66.39p
Diluted 102.54p 66.39p
Consolidated Balance Sheet
31 December 2006
At At
31 December 2006 31 December 2005
£000 £000
ASSETS
Non-current assets
Goodwill 6,732 6,732
Other intangible assets 1,608 1,008
Property, plant and equipment 43,602 36,784
Interests in associates 46 36
51,988 44,560
Current assets
Inventories 3,333 7,318
Trade and other receivables 46,786 32,419
Cash and cash equivalents 38,304 30,132
88,423 69,869
Total assets 140,411 114,429
LIABILITIES
Current liabilities
Trade and other payables 56,966 48,221
Tax liabilities 6,125 3,251
Obligations under finance leases 66 363
63,157 51,835
Non-current liabilities
Retirement benefit obligations 7,287 6,384
Provisions 3,000 -
Deferred tax liabilities 742 943
Obligations under finance leases - 66
11,029 7,393
Total liabilities 74,186 59,228
NET ASSETS 66,225 55,201
EQUITY
Share capital 2,040 2,040
Share premium 9,770 9,770
Other reserves 139 139
Retained earnings 54,276 43,252
TOTAL EQUITY 66,225 55,201
Consolidated Statement of Recognised Income and Expense
For the year ended 31 December 2006
Year ended Year ended
31 December 2006 31 December 2005
£000 £000
Actuarial loss on defined benefit (1,169) (745)
pension scheme
Tax on items taken directly to equity 351 224
Net expense recognised directly (818) (521)
in equity
Profit for the year from 20,921 13,515
continuing operations
Total recognised income and 20,103 12,994
expense for the year attributable
to equity shareholders
Consolidated Cash Flow
For the year ended 31 December 2006
Year ended Year ended
31 December 2006 31 December 2005
£000 £000
Cash flows from operating activities
Cash generated from operations 35,488 35,543
Interest paid (82) (139)
Tax paid (6,341) (5,824)
Net cash from operating activities 29,065 29,580
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 920 648
Interest received 1,239 456
Acquisition of subsidiary, including costs - (1,424)
Overdraft acquired with subsidiary - (3,592)
Purchases of property, plant and equipment (13,010) (4,216)
Purchases of intangible fixed assets (600) (1,008)
Net cash used in investing activities (11,451) (9,136)
Cash flows from financing activities
Proceeds from the issue of share capital - 368
Repayment of borrowings - (2,453)
Payment of finance lease liabilities (363) (616)
Dividends paid (9,079) (5,456)
Net cash used in financing activities (9,442) (8,157)
Net increase in cash and cash equivalents 8,172 12,287
Cash and cash equivalents at beginning of period 30,132 17,845
Cash and cash equivalents at end of period 38,304 30,132
1) Basis of preparation
The Group's financial statements have been computed in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union and on a basis consistent with that adopted in the previous year.
The financial information set out in this preliminary announcement does not
amount to full accounts within the meaning of section 240 of the Companies Act
1985. Full accounts for the year ended 31 December 2006 have not yet been
audited or delivered to the Registrar of Companies. The Annual Report is due to
be posted to shareholders on or around 15 May 2007. A copy of the statutory
accounts for the year ended 31 December 2005 has been delivered to the Registrar
of Companies. The Auditor's Report on those accounts was not qualified and did
not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
2) Revenue and segmental analysis
Revenue in both years originated from the United Kingdom. Revenue, profit
before tax and net assets, in both years, related to the design, fabrication and
erection of structural steel work and related activities.
3) Taxation
The taxation charge comprises:
2006 2005
£000 £000
Current tax
UK corporation tax 9,304 5,303
Adjustments to prior years' tax provision (89) (4)
9,215 5,299
Deferred tax
Current year charge 86 822
Adjustments to prior years' provision 64 16
150 838
Total tax charge 9,365 6,137
4) Dividends
2006 2005
£000 £000
Final dividend for the year ended 4,998 2,906
31 December 2005 of 24.50p
(2004: 14.25p) per share
Interim dividend for the year ended 4,081 2,550
31 December 2006 of 20.00p
(2005: 12.50p) per share
9,079 5,456
Proposed final dividend for the year 7,549 4,998
ended 31 December 2006 of 37.00p
(2005: 24.50p) per share
The proposed final dividend is subject to approval by shareholders at the Annual
General Meeting and has not been included as a liability in these financial
statements. The proposed dividend will be paid on 18 June 2007 to shareholders
on the register on 11 May 2007. The ex-dividend date is 9 May 2007.
5) Earnings per share
There are no discontinued operations in either the current or prior
year.
The calculation of the basic and diluted earnings per share is based on the
following data:
2006 2005
£000 £000
Earnings
Profit for the year 20,921 13,515
2006 2005
Weighted average of number of shares 20,401,969 20,358,229
in issue
Weighted average of number of shares 20,401,969 20,358,229
in issue, allowing for dilutive effect
of share options
Basic earnings per share 102.54p 66.39p
Diluted earnings per share 102.54p 66.39p
6) Reconciliation of Group operating profit to cash generated
from operations
2006 2005
£000 £000
Operating profit 29,118 19,303
Adjustments for:
Depreciation of property, plant and equipment 4,238 2,719
Loss on disposal of property, plant and equipment 212 56
Movement in pension (266) -
Provision against loan from associated company - 543
Share of results of associated company (10) 1
Increase in provisions 3,000 -
Operating cash flows before changes 36,292 22,622
in working capital
Decrease in inventories 4,807 6,491
(Increase)/decrease in receivables (14,356) 5,729
Increase in payables 8,745 701
Cash generated from operations 35,488 35,543
7) Statement of changes in equity
At At
31 December 31 December
2006 2005
£000 £000
Opening total equity 55,201 47,295
Total recognised income and expense 20,103 12,994
Dividends paid in period (9,079) (5,456)
Issue of share capital - 368
Closing total equity 66,225 55,201
8) Analysis of net funds
At At
31 December 31 December
2006 2005
£000 £000
Cash in hand 38,304 30,132
Finance leases (66) (429)
Closing net funds 38,238 29,703
This information is provided by RNS
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