Final Results
TT electronics PLC
26 March 2002
TT electronics plc
Preliminary Results for the year ended 31 December 2001
TT electronics, a world leader in resistor and sensor technology today announces
its preliminary results.
KEY POINTS
• Group turnover of £657.9 million (2000: £746.0 million) after a reduction
of £41.7 million relating to discontinued businesses.
• Profit before tax, exceptional items and goodwill amortisation of £
32.1million, in line with market expectations.
• Unchanged final dividend of 6.36p per share bringing the total for the
year to 10.05p (2000: 10.05p). Shareholders also benefited from the dividend
in specie following the demerger of the Send Group plc in May.
• Very strong cash generation in the second half.
• Gearing reduced to 29% reflects strong balance sheet and robust financial
controls.
• Continuing success achieved in the automotive market with sales up 10%.
John Newman, Executive Chairman said today:
'The highlight of the year has been the strong growth of our automotive product
operations where the increasing level of electronic content in new cars
continues to drive the market forward.
'The automotive market now represents just over half our total electronic
revenues. The designed-in nature of our products, which have an average life of
five years, provides good visibility going forward. The group's expertise and
core technologies enable us to look forward confidently to further growth in our
automotive sales.
'Following the demerger and disposal of non-core activities, TT electronics is
now focused on its electronic and electrical businesses. Customers have welcomed
our name change.'
26th March 2002
Enquiries:
TT electronics plc Tel: 01932 856647
John W Newman, Executive Chairman
Biddicks Tel: 020 7448 1000
Zoe Biddick
Chairman's statement
The year has been a challenge for TT electronics. We have successfully focused
the group on its electronic and electrical activities following the demerger and
disposals of non-core businesses. The total turnover for the year was £657.9
million compared with £746.0 million in 2000, £41.7 million of this reduction
relates to discontinued activities. Profit before taxation and amortisation of
goodwill and exceptional items was £32.1 million compared with £44.2 million.
Earnings per share before amortisation of goodwill and exceptional items were
16.0p compared with 21.0p. Basic and fully diluted earnings per share were 12.2p
compared to 18.7p. The taxation charge for the year was unchanged at 27 per
cent.
The charge for amortisation of goodwill of £2.2 million compares with £2.0
million in the previous year. The exceptional loss for the year of £4.1 million
arises from the demerger, disposal and termination of businesses. The cost of
the demerger of the Send Group plc and the loss on the sale of F. D. Sims
Limited were set out in the Interim Report. The closure of the group's jointly
owned copper rod production facility in October was at a cost of £0.7 million.
The sale of United Packaging PLC, part of the planned disposal of non-core
activities, took place in August for a total consideration of £2.6 million which
included £0.3 million profit over asset value. However, when United Packaging
was purchased in August 1987, TT electronics' share price reflected an extremely
high price earnings multiple which substantially reduced after the October 1987
stock market collapse. The goodwill reflected in that high share price was
charged directly to the group's reserves. Under accounting standard FRS 2,
goodwill of £1.7 million written off in 1987 has been transferred from reserves
and charged to the 2001 profit and loss account as an exceptional item.
On the 1 June the Company announced it had changed its name to TT electronics
plc which has been well received by our customers and reflects the group's
emphasis on its electronic and electrical activities.
During the year necessary steps were taken in response to the difficult market
conditions with the aim of minimising the effect on the group of the downturn in
trade. The group has continued to move production to lower cost manufacturing
areas where appropriate. In the second half of the year the lower level of
demand for components from the telecom industry, together with costs of £2.6
million for redundancy and reorganisation needed to adjust the group's
operations to the reduced levels of business, affected TT electronics' profit
performance.
TT electronics is following the policy of retaining its skilled staff and
maintaining its expertise to ensure that the group will be in a position to
benefit fully as demand improves. The group decided to incur this cost as this
is an investment for the future. However, further reductions in the workforce
may be required if market conditions do not improve.
The year has been notable for the group's continuing success in increasing sales
of electronic components to the automotive industry. Products include
accelerator pedal, height level and steering wheel sensors. Sales of sensors and
electronic systems have grown by 18 per cent in 2001. Development of new
products continues, including a parking aid sensor which has an improved
performance and is also a lower cost solution.
TT electronics has been strongly cash generative with net indebtedness reduced
to £63.5 million at 31 December 2001, compared to £100.9 million at 30 June
2001. The significant cash generation in the second half of the year, to which
the disposal of United Packaging PLC contributed £2.6 million, demonstrates the
group's ability to generate cash and the effectiveness of the group's financial
controls.
The Board recommends a final dividend of 6.36p per share, which brings the total
dividend for the year to 10.05p, unchanged from last year. The dividend is 1.6
times covered by earnings before amortisation of goodwill and exceptional items.
Michael Mallett is retiring as a non-executive Director at the Annual General
Meeting in May. On behalf of the Board I would like to take this opportunity to
thank him for his wise counsel over the years.
It is difficult for employees' morale to remain high when in 2001 many of our
operations have had to suffer redundancies within their workforces due to lower
demand for some of our products. Despite the effect of these redundancies,
employees have maintained their enthusiasm and commitment and the Board thanks
them for their continuing effort and support.
As regards current trading, TT electronics is successfully developing new
customers, but this takes time with designed-in products. The telecom market is
still depressed and whilst our workforce has been adjusted accordingly, an
improved level of demand would be very beneficial. We can be positive regarding
the automotive market, where we see growth as a result of securing contracts for
electronic components for new automotive models.
The Board of TT electronics considers that the timing is right to make
appropriate acquisitions, which will enable the group to expand and strengthen
its position as a leading supplier of electronic and electrical products.
John W Newman
Executive Chairman
25 March 2002
Chief Executive's review
My review of the first half year's results in the Interim Report for 2001
commented on the strong result for the electronic sector. Whilst the automotive
industry was maintaining growth we were suffering a rapidly weakening demand for
our components for the telecom and computer industries due to the well
publicised collapse in these markets. The 11 September attack in the USA
depressed market confidence further and telecom and computer industry sales fell
to their lowest level for many years. This affected our passive component and
magnetic sales, which declined by 27 per cent compared to the previous year.
Weakened demand spread into the wider industrial markets for both our electronic
and electrical products. However the automotive industry maintained its growth.
This resulted in an 8 per cent reduction in the electronic sales and a 5 per
cent reduction in electrical sales. Their operating profits before goodwill
amortisation decreased by 22 per cent and 39 per cent respectively. The
reduction in operating profit of continuing activities compared to 2000 amounted
to 24 per cent, all of this reduction was suffered in the second half of the
year due to lower sales.
In order to adjust the group's operations to the lower level of sales and to
protect margins, we reviewed our head count requirements and regrettably had to
reduce employee numbers by 14 per cent. As a result in the year the group
incurred redundancy and reorganisation costs of £4.6 million. We have ensured
that key skills have been safeguarded to enable the group to return to growth
when markets improve.
The change of name to TT electronics plc, following the demerger of the
packaging interests, has reinforced the focus of the group on our core
businesses in the electronic and electrical sectors. This change has had a
positive impact in promoting the market position of the group as a supplier to
global original equipment manufacturers and satisfies their requirement to
reduce the number of their suppliers.
Manufacturing
TT electronics has a global manufacturing presence with forty world class
factories currently employing a total of 8,772 people with 6,675 in the United
Kingdom, mainland Europe and USA, as well as 2,097 people in low labour cost
countries. This global spread enables us to provide technological services close
to the engineering and manufacturing sites of our customers and is a strong
element in winning new business where local content is often as important a
factor as cost competitive products.
Most of the group's products are designed for a customer specific application
based on our range of core technologies. Products are engineered from conception
for manufacture on automated production lines thereby minimising labour costs.
Where this approach is not cost effective manufacture is moved to low labour
cost areas such as our factories in Malaysia, Mexico, Barbados and India. The
policy over many years has been to invest in modern manufacturing equipment,
systems and methodologies such as Kaizen and Toyota lean manufacturing. The
commitment to continuous improvement is driven by our specialists trained in
these modern production methods ensuring the group's factories maintain their
world class competitiveness.
Our quality philosophy is to ensure products are manufactured right first time
as this is cost effective and fulfils our customers expectations for us to be
operating a zero defect regime. We achieve this by placing emphasis on design
engineering, process control and modern manufacturing equipment. The group's
factories and processes are certified to ISO 9000, QS 9000 or the new more
international quality standard TS 16949.
Electronic sector
Automotive market - represents 51 per cent of the electronic sector turnover
Our customers include most of the major European and USA vehicle manufacturers
as well as the Tier 1 system suppliers. More than 50 per cent of all cars
produced in Europe and the USA now incorporate a component or assembly
manufactured by the group.
The global market for automotive electronics is forecast to grow at a rate of
more than 6 per cent per annum. The strong growth rate is driven by legislation
in the World's leading economies for cleaner emissions, better fuel efficiency,
enhanced safety for the driver, passenger and other road users, as well as
improved comfort and additional driver aids such as navigation systems, parking
aids, driver drowsiness monitors and more complex air conditioning systems.
The investment made in product development, automated equipment and the
expansion of our factories in both Europe and the USA has proved very
successful. In the year 2001, sensor and electronic system sales grew by 16 per
cent and overall our automotive sales grew by 10 per cent. It is normal for
there to be a two to three year period from the initial winning of a development
contract to the beginning of full production of a new model. In 2001 a number of
new products were incorporated, as planned, in new models and this, together
with a healthy demand, increased automotive sales.
The introduction of volume production of new technologies often suffers from
initial start up problems. At our Austrian factory, delayed delivery of
equipment and the construction of a new class 10000 clean room for thick film
printing of complex circuits caused inefficient manufacturing, poor yields and
cost overruns. The problems were overcome by the year end and an improved level
of profitability will be achieved this year. Four years ago we set up a
dedicated USA automotive operation at our factory in North Carolina and used our
European chassis sensor technology to fulfil contracts won in the USA; further
production of climate control modules was successfully added in 2001. Our German
operation also generated good growth in sales and profitability based on its
Hall effect sensor technology, which includes accelerator pedal modules and
chassis height sensors.
Automotive technologies
Over the years the group has focused on a range of core technologies
specialising in contacting and contactless sensors for throttle control, chassis
height levelling, ABS braking, position, temperature and height sensors as well
as hybrid and microcircuit technology for engine management functions. TT
electronics is a leader in steer, drive and brake by wire technologies which
have been incorporated into several luxury and volume produced vehicles in
Europe and the USA. Our sensor, incorporated into a steer by wire system which
uses electronics to replace hydraulics, is the first in the World to be designed
into volume produced vehicles.
Height sensors are used in a growing number of luxury and volume produced cars
as well as sports utility vehicles. These sensors monitor and control a
vehicle's suspension movements in order to provide a smoother and safer ride and
are essential in keeping the car level to avoid headlight dazzle, in particular
from blue light high intensity discharge headlights. Printed circuit boards
manufactured at our factory in Scotland are incorporated into a number of
applications including instrument panels and radios. Advanced climate control
units are engineered at our design centre in Wales and manufactured in our Welsh
and North American factories.
The group's policy is to develop new technologies and products ensuring that
where appropriate they are protected by patents or trademarks. We also license
new technologies from third parties, and during the year have negotiated a
licence to utilise patented surface acoustic wave technology in one of the
development programmes for a new generation of steering sensors. Other examples
of potentially successful new applications of our sensor technologies are a
parking aid system, clutch and brake assist sensors and fan speed controls.
These applications provide us with future growth in sales to the automotive
market.
Telecom market - represents 16 per cent of the electronic sector turnover
We supply the major European and USA telecom equipment manufacturers
particularly for switching station applications where over 20 per cent of the
World's fixed lines, installed in 2001, are protected by our products.
In the year 2001 the telecoms industry had an unprecedented and well publicised
collapse. This started in the USA and then spread throughout all telecom
markets. We suffered many delayed schedules and cancellations from our global
customers reducing our sales by approximately 25 per cent. All of our passive
component operations suffered the downturn although our ferrite and lamination
businesses were particularly badly affected. The excessive stock of finished
goods in the industry has been largely consumed and the supply chain has begun
to empty. We consider the telecom market to have potential for growth in the
long-term and that order intake will gradually increase. Our technical staff and
application engineers have been busy working closely with our major customers
developing new applications of our technologies to enhance products which will
be launched in the future.
Telecom technologies
Our technologies provide a range of advanced components which are built into
fixed land line and optical switching telecom circuits, mobile base stations,
terrestrial and sub-sea signal booster stations and communication satellite
systems.
As mobile handsets become smaller, with more functionality, the demand for
miniaturised integrated passive electronic components increases. This provides
opportunities for growth of our products such as our patented Quiet i inductor,
which is utilised in phones and palm computers to control power conservation for
LCD screen back-lights.
Line surge protection in telephone switching stations uses wirewound
technologies, which are being replaced by our modern hybrid circuits. Future
growth will come from new designs being developed utilising micro electronic
packages for fibre optic transmission and receiving systems.
Our advanced range of tantalum nitride thin film components on ceramic and
silicon are manufactured in class 100 and class 1000 clean rooms for use in high
reliability situations such as sub-sea booster stations and communication
satellites. Our resistor ball grid arrays are designed into telecom and internet
infrastructures where their very small size and high frequency performance
command premium prices.
Computer market - represents 11 per cent of the electronic sector turnover
The World's leading manufacturers of PCs and ancillary equipment use our
electronic components in their products which include motherboards, disk drives,
modems and printers. Over 30 per cent of all PCs manufactured worldwide contain
a component manufactured by the group.
Sales of PCs rose marginally, but sales of our components declined by 29 per
cent. This was due to the high opening stock levels of both finished PCs and
also components in the supply chain. At the end of 2001 we began to see demand
return to a more normal level and our expectations are that PC sales will
increase in 2002.
Computer technologies
We have developed a range of inductors, surface mount resistors, resistor
network arrays, filter chip dividers and resistor/capacitor/diodes utilising
TaNFilm(R) and thick film processes which are specifically targeted to the
computer market. Our signal and power magnetic components are used to maintain
the integrity of the transmitted signal data.
Industrial market - represents 22 per cent of the electronic sector turnover
There is a wide range of industrial and consumer markets which use our
electronic products. The group's focus is to address the more stringent
requirements of the aerospace, medical and control instrumentation markets where
high reliability is essential. During the year, more emphasis has been placed on
understanding the requirements for electronic components of these industries to
enable us to develop specialist products. Our manufacturing and test processes
are designed to fulfil these market requirements which enable our products to
attract premium prices. We have identified a number of additional opportunities
which will generate future growth.
Industrial technologies
Our extensive product offering includes microelectronic circuits and precision
potentiometers for civil and military aircraft, precision resistors for
spacecraft and satellites, precision TaNFilm(R) networks and resistors for
medical equipment and customised potentiometers and trimmers for the control
instrumentation market.
Electrical sector
Power generation - represents 26 per cent of the electrical sector turnover
The group designs and assembles electrical power generating units of typically
between 50 and 2000KVA output for continuous and standby applications. These are
sold to a variety of users such as banks, offices, hotels and commercial and
industrial premises. We also supply mobile ground power units which are
extensively used at United Kingdom, other European, Mid and Far Eastern civil
and military airports. The overall United Kingdom market, where we supply both
equipment and carry out installation work, has remained subdued. This has been
caused mainly by low demand for standby generation for the telecom industry.
Demand from export markets particularly in the Mid and Far East, including
China, has continued to be slow. Despite the slowing local economy, our business
in Mexico has performed consistently well and maintained sales to Central
America.
Our specialist uninterruptible power supply business has successfully developed
an intelligent DC power supply with full remote control and monitoring based on
internet communications for the next generation of 3G base stations. The product
has so far been specified by one major operator but, due to the delayed rollout
of 3G technology, sales have been delayed for longer than expected.
Power transmission - represents 74 per cent of the electrical sector turnover
The group manufactures power and data transmission cables, cable joints,
insulators and fuse equipment. We are a niche manufacturer of sub-sea cables and
during the year were successful in obtaining a number of medium sized orders.
Large sub-sea cable orders are infrequent and none were placed during 2001,
although a number of quotations are currently outstanding. The domestic market
for house wiring and cables for construction projects is very competitive due to
over supply from United Kingdom factories and imports from European
manufacturers. The group continues to invest in equipment to manufacture more
specialist cables and during the year installed a catenary line to produce high
specification rubber insulated cables for mining, railways, ship building and
other harsh environment applications. We continue to seek cost reductions in our
cable manufacture by installing new equipment to achieve greater efficiencies.
During the year employee reductions and reorganisation cost £2.8 million.
Since the acquisition of the Wire and Cables businesses we have been a majority
partner in a United Kingdom copper rod manufacturing plant. This factory
provided our cable companies with raw material and in 2001 sold £36.1 million at
very low margins to third parties. Due to over capacity in this industry we
agreed in September with our minority partner to cease manufacture and dispose
of the plant. We have successfully re-sourced the copper rod required for our
own use.
We specialise in high temperature fire resistant cables used for fire alarms and
other safety systems. At the end of the year, having researched the market we
established our own distribution centre in the USA to sell mineral insulated
cables. We have already received a number of orders and anticipate steady growth
from this market.
Outlook
Over the years, through acquisition and organic growth, we have built a
significant global electronic business in passive electronic components, sensors
and systems as well as electrical businesses in power generation and power
transmission. Our policy is to continue to invest globally, particularly in the
electronic sector, both by further acquisitions and the expansion of our current
facilities to increase our penetration into markets where we see good growth
potential as well as satisfactory margins and returns on capital.
Our sales of automotive electronic components are continuing to grow despite
reduced production of some vehicle models. There are some indications that the
telecom and computer industries are consuming their excess inventories, which in
due course will result in supply chains returning to normal.
The group continues to develop excellent core technologies and has close
relationships with a wide range of global original equipment manufacturers,
electronic manufacturing service companies and component distributors. During
the year our technical, sales and engineering personnel have been maintaining
close contact with existing and potential customers to ensure that when demand
increases we will be able to respond quickly and effectively to our customers'
requirements.
Sheridan W A Comonte
Chief Executive
25 March 2002
Consolidated profit and loss account
For the year ended 31 December 2001
Continuing Discontinued 2001 Continuing Discontinued 2000
activities activities Total activities activities Total
Note £million £million £million £million £million £million
Turnover 1 630.7 27.2 657.9 677.1 68.9 746.0
Cost of sales (521.5) (20.4) (541.9) (543.7) (52.5) (596.2)
Gross profit 109.2 6.8 116.0 133.4 16.4 149.8
Operating expenses (74.7) (5.3) (80.0) (87.1) (13.1) (100.2)
Operating profit 1 34.5 1.5 36.0 46.3 3.3 49.6
Operating profit before 36.7 1.5 38.2 48.3 3.3 51.6
goodwill amortisation
Goodwill amortisation (2.2) - (2.2) (2.0) - (2.0)
Loss on sale or 2 (0.9) (2.1) (3.0) (1.5) - (1.5)
termination of businesses
Costs of reorganisation - 2 - (1.1) (1.1) - - -
demerger
Profit on ordinary 31.9 48.1
activities before interest
Interest (6.1) (7.4)
Profit on ordinary 25.8 40.7
activities before taxation
Taxation (6.9) (11.0)
Profit on ordinary 18.9 29.7
activities after taxation
Dividends- ordinary 3 (15.6) (15.0)
- in specie 3 (41.1) -
Retained (loss)/profit (37.8) 14.7
Earnings per share 4
- basic and fully diluted 12.2p 18.7p
- before goodwill 16.0p 21.0p
amortisation and
exceptional items
Consolidated balance sheet
At 31 December 2001
2001 2000
Note £million £million
Fixed assets
Intangible assets 38.1 39.3
Tangible assets 153.2 195.0
Investments 10.7 9.5
202.0 243.8
Current assets
Property 4.0 -
Stocks 99.1 127.9
Debtors 111.0 137.9
Investments 0.1 0.1
Cash 8.8 5.1
223.0 271.0
Creditors falling due within one year (132.6) (226.6)
Net current assets 90.4 44.4
Total assets less current liabilities 292.4 288.2
Creditors falling due after more than one year (60.8) (31.5)
Provisions for liabilities and charges (6.9) (8.9)
Minority interests (2.6) (3.3)
Total net assets 222.1 244.5
Capital and reserves
Share capital 38.7 38.7
Share premium account 56.0 56.0
Capital redemption reserve 4.4 4.4
Merger reserve 12.1 -
Profit and loss account 110.9 145.4
Equity shareholders' funds 5 222.1 244.5
Consolidated cash flow statement
for year ended 31 December 2001
2001 2000
Note £million £million
Net cash inflow from operating activities 6 76.6 70.2
Returns on investments and servicing of finance
Dividends received 0.3 0.4
Interest paid (9.1) (8.2)
Interest received 0.7 0.5
Net cash outflow from returns on investments and servicing of finance (8.1) (7.3)
Taxation (7.4) (10.6)
Capital expenditure and financial investment
Sale of tangible fixed assets 3.2 6.8
Government grants received 2.5 0.8
Purchase of fixed asset investments - (1.2)
Purchase of tangible fixed assets (35.4) (43.0)
Net cash outflow from capital expenditure and financial investment (29.7) (36.6)
Acquisitions and disposals
Demerger of businesses 7 15.2 -
Sale of businesses 5.4 0.8
Purchase of businesses - (39.8)
Net cash inflow/(outflow) from acquisitions and disposals 20.6 (39.0)
Ordinary dividends paid (15.6) (15.3)
Net cash inflow/(outflow) before liquid resources and financing 36.4 (38.6)
Management of liquid resources
Purchase of current asset investments (1.7) (0.3)
Sale of current asset investments - 1.6
Net cash (outflow)/inflow from management of liquid resources (1.7) 1.3
Financing
Purchase of own shares - (12.4)
New loans 51.8 -
Loan repayments (21.1) (1.2)
Finance lease repayments (1.3) (1.9)
Net cash inflow/(outflow) from financing 29.4 (15.5)
Increase/(decrease) in cash 8 64.1 (52.8)
Notes to the financial statements
1. Analysis of turnover and profit on ordinary activities before taxation
Turnover
2001 2000
By sector
£million £million
Electronic 399.6 434.0
Electrical 231.1 243.1
Continuing activities 630.7 677.1
Discontinued activities 27.2 68.9
657.9 746.0
Discontinued activities arose from the demerger of the glass container
businesses, the sale of the packaging machinery business, and the closure of
the copper rod business during the year. The demerged businesses were
previously reported as 'to be discontinued'. The other discontinued
activities were previously reported within the electrical sector.
By origin 2001 2000
£million £million
United Kingdom 368.0 399.2
Rest of Europe 105.4 106.8
North America 98.9 112.7
Rest of the World 58.4 58.4
Continuing activities 630.7 677.1
Discontinued activities 27.2 68.9
657.9 746.0
By destination
United Kingdom 227.2 255.8
Rest of Europe 202.1 197.8
North America 115.9 128.9
Rest of the World 85.5 94.6
Continuing activities 630.7 677.1
Discontinued activities 27.2 68.9
657.9 746.0
Turnover of the discontinued activities by origin was £23.9 million (2000 -
£61.6 million) in the United Kingdom and £3.3 million (2000 - £7.3 million)
in the Rest of Europe.
Turnover of the discontinued activities by destination was £20.3 million
(2000 - £54.1 million) to the United Kingdom, £4.4 million (2000 - £8.9
million) to the Rest of Europe, £1.0 million (2000 - £2.2 million) to North
America and £1.5 million (2000 - £3.7 million) to the Rest of the World.
Profit on ordinary activities before taxation
2001 2000
By sector £million £million
Electronic 32.9 42.1
Electrical 3.8 6.2
Continuing activities 36.7 48.3
Discontinued activities 1.5 3.3
Operating profit before goodwill amortisation 38.2 51.6
Goodwill amortisation (2.2) (2.0)
Total operating profit 36.0 49.6
Exceptional items (see note 2) (4.1) (1.5)
Profit on ordinary activities before interest 31.9 48.1
Interest (6.1) (7.4)
Profit on ordinary activities before taxation 25.8 40.7
By origin Continuing Discontinued 2001 Total Continuing Discontinued 2000 Total
activities activities £million activities activities £million
£million £million £million £million
United Kingdom 6.4 1.1 7.5 14.7 2.5 17.2
Rest of Europe 10.6 0.4 11.0 9.9 0.8 10.7
North America 12.8 - 12.8 16.3 - 16.3
Rest of the World 6.9 - 6.9 7.4 - 7.4
Operating profit before goodwill 36.7 1.5 38.2 48.3 3.3 51.6
amortisation
Goodwill amortisation (2.2) - (2.2) (2.0) - (2.0)
Total operating profit 34.5 1.5 36.0 46.3 3.3 49.6
Exceptional items (see note 2) (4.1) (1.5)
Profit on ordinary activities before 31.9 48.1
interest
Interest (6.1) (7.4)
Profit on ordinary activities before 25.8 40.7
taxation
2. Exceptional items
2001 £million 2000
£million
Loss on sale of businesses 2.3 1.5
Loss on termination of business 0.7 -
3.0 1.5
Costs of reorganisation - demerger 1.1 -
Exceptional items 4.1 1.5
The loss on sale of businesses arose from the disposals of the business of
F.D. Sims Limited on 28 February 2001 and of United Packaging PLC on 21
August 2001. The loss on termination of business resulted from the closure
of Rodco Limited.
Exceptional items are after charging £1.5 million (2000 - £1.0 million) of
goodwill previously written off to reserves.
3. Dividends
2001 pence 2000 pence 2001 2000
per share per share £million £million
Equity
Ordinary dividends
- Interim, paid 3.69 3.69 5.7 5.7
- Final, proposed 6.36 6.36 9.9 9.9
10.05 10.05 15.6 15.6
Reduction in 1999 final dividend payment due to - (0.6)
share buy back
15.6 15.0
The proposed final dividend is to be paid on 30 May 2002 to shareholders on
the register on 17 May 2002.
A dividend in specie of £41.1 million has been made as part of the demerger,
see note 7
4. Earnings per share
2001 pence per 2000 pence
share per share
Earnings per share
Basic and fully diluted 12.2 18.7
Before goodwill amortisation and exceptional items 16.0 21.0
Earnings per share has been calculated by dividing the profit attributable
to shareholders by the weighted average number of shares in issue during the
period. The numbers used in calculating basic and fully diluted earnings per
share are reconciled below.
An adjusted earnings per share has also been presented based on the profit
attributable to shareholders before goodwill amortisation and exceptional
items. The effect of these items on earnings is reconciled below.
2001 2000
£million £million
Net profit for the period attributable to shareholders
Earnings basic and fully diluted 18.9 29.7
Goodwill amortisation 2.2 2.0
Exceptional items, net of tax relief 3.6 1.5
Earnings before goodwill amortisation and exceptional items 24.7 33.2
2001 million 2000 million
Weighted average number of shares in issue
Basic 154.8 158.4
Adjustment for share options 0.5 0.3
Fully diluted 155.3 158.7
5. Reconciliation of movements in shareholders' funds
2001 2000
£million £million
Profit for the year 18.9 29.7
Exchange differences on net foreign currency investments (0.7) 2.7
Total recognised gains and losses 18.2 32.4
Dividends - ordinary (15.6) (15.0)
- in specie (41.1) -
Share buy back - (12.4)
Goodwill on demerger and disposals 16.1 1.0
Net change in shareholders' funds (22.4) 6.0
Opening shareholders' funds 244.5 238.5
Closing shareholders' funds 222.1 244.5
6. Reconciliation of group operating profit to net cash inflow from operating
activities
2001 2000
£million £million
Total operating profit 36.0 49.6
Depreciation 31.7 33.0
Amortisation 2.2 2.0
Government grants credited to profit (1.8) (0.7)
Profit on sale of tangible fixed assets (0.3) (0.9)
Closure and other costs (0.9) -
Decrease in property current assets 2.9 -
Decrease/(increase) in stocks 8.5 (7.4)
Decrease/(increase) in debtors 19.9 (10.0)
(Decrease)/increase in creditors (17.2) 3.4
Profit on disposal of current asset investments - (0.4)
Movement on pension prepayments and accruals (3.4) 0.3
Exchange translation differences (1.0) 1.3
Net cash inflow from operating activities 76.6 70.2
7. Demerger
On 15 May 2001 the group's glass container businesses were demerged by way
of a dividend in specie of Send Group plc shares.
£million
Net assets demerged 26.5
Goodwill 14.6
Dividend in specie 41.1
Cash inflow in respect of demerger
Bank borrowings (net) 16.3
Cash costs (1.1)
Net inflow 15.2
8. Reconciliation of net cash flow to movement in net debt
Net cash/ Short-term Loans and finance Net debt £million
(overdraft) investment £million lease obligations
£million £million
Balance at 31 December 2000 (72.9) 0.1 (24.4) (97.2)
Cash flow 64.1 1.7 (29.4) 36.4
Demerger - - 0.2 0.2
Exchange differences (2.8) - 1.6 (1.2)
Other non-cash movements - (1.7) - (1.7)
Balance at 31 December 2001 (11.6) 0.1 (52.0) (63.5)
During the year the group repaid a bank loan of £20 million and reduced bank
overdrafts by £30 million through utilisation of a committed £50 million
multicurrency revolving bank loan facility.
9. Basis of preparation
The information above, which does not constitute full financial statements
within the meaning of S240 CA, 1985 is extracted from the audited financial
statements of TT electronics plc for the year ended 31 December 2001 which:
• have been prepared on a basis consistent with the accounting policies set out
in the annual report for the year ended 31 December 2000 as filed with the
Registrar of Companies
• were approved by the Directors on 25 March 2002
• carry an unqualified audit report, which did not contain any statements under
S237 CA 1985
• will be posted to shareholders and available to the public in April 2002
• will be filed with the Registrar of Companies following the Annual General
Meeting on 8 May 2002
This information is provided by RNS
The company news service from the London Stock Exchange
RUUROUUR
Latest directors dealings
- 3 hours ago Banco Santander S.A.
- 4 hours ago Renew Holdings
- 4 hours ago Rotork
- 4 hours ago Zegona Communications
- 5 hours ago Unilever