Final Results

Carclo plc 14 June 2004 14 June 2004 Carclo plc Preliminary results for the year ended 31 March 2004 Key points â€¢ Sales from continuing operations down 6.2%. Overall, underlying operating profits from continuing operations, before goodwill and exceptional charges, reduced by 54.7% to Â£2.3 million. â€¢ The major rationalisation and closure programme was completed in the year resulting in a charge of Â£6.5 million. â€¢ Capacity in low cost manufacturing regions continues to increase, a new facility in China is now operational and a further factory in the Czech Republic will be commissioned in the coming financial year. â€¢ Carclo's focus on debt reduction during the past twelve months has been successful with net debt reducing by Â£6.8 million to Â£28.1 million. â€¢ The board has recommended a total dividend of 1.2 pence per share for the year (2003 - 1.2 pence). Commenting on the results, George Kennedy, Chairman said: 'We have entered the new financial year with both of the group's continuing business segments in profit, benefiting from last year's restructuring and rationalisation. In recent months we have also seen much greater stability in customer demand which has reduced the volatility in our trading performance. With good growth prospects in specialist plastics and in low cost regions together with interesting new products and technologies in development, we feel that the group is well placed to deliver positive momentum.' For further information, please contact: Carclo plc On 14 June: 020 7067 0700 Thereafter: 01924 330500 Ian Williamson, Chief Executive Robert Brooksbank, Finance Director Weber Shandwick Square Mile: 020 7067 0700 Richard Hews Susanne Walker Notes to Editors â€¢ Carclo plc is a global supplier of technical plastic components and specialist wire products. It is a public company whose shares are quoted on the London Stock Exchange. â€¢ 81% of sales are derived from the supply of fine tolerance, injection moulded plastic components, which are used in medical, automotive, telecom and electronics products. This business, Carclo Technical Plastics, operates internationally in a fast growing and dynamic market underpinned by rapid technological development. â€¢ The Specialist Wire division manufactures card clothing, a specialised engineered product used by the textile fibre processing industry world wide, precision aerospace products and band saws. â€¢ Carclo's strategy is to grow rapidly in low cost manufacturing regions and to develop new technologies and products to underpin future growth. Chairman's statement Overview This time last year we reported that the new financial year had started slowly, impacted by the continuing migration of our customer base to lower cost regions. As a consequence, the first half of the year was challenging but the actions taken in rationalising the moulding operations and closing the tool manufacturing operations ensured a significant recovery in the second half. Sales from continuing operations were 6.2% down on the prior year at Â£115.7 million reflecting the impact of the reduced customer base in the UK and, to a lesser extent, the United States. We have, however, grown in China and the Czech Republic and additional facilities in these regions will be commissioned in the forthcoming financial year. Overall, underlying operating profits, before exceptional items and goodwill, reduced to Â£2.3 million (2003 - Â£5.1 million). After net exceptional charges amounting to Â£6.2 million, the group incurred a loss before tax of Â£6.6 million. Dividend Our focus on debt reduction continues. Despite the losses reported in the year, debt reduced by Â£6.8 million, benefiting from the disposal of surplus properties. The board is therefore recommending a final dividend for the full year of 0.8 pence per share giving a total dividend for the year of 1.2 pence (2003 - 1.2 pence). Subject to shareholder approval, dividend payments will be posted on 9 September 2004 to shareholders on the register at close of business on 6 August 2004. The shares will be traded excluding the right to the dividend from 4 August 2004. Financial position At the year end net debt was Â£28.1 million (2003 - Â£34.9 million) representing gearing of 60.2%. During the year we renegotiated our medium term facilities with our three principal banks on less onerous covenant terms. At 31 March 2004 the group had cash and unutilised assured medium term facilities of Â£16.1 million. The undrawn term facilities have an average life of 3.6 years remaining. Employees The past year has been very demanding with the rationalisation of the UK moulding operations and the closure of the tool manufacturing operations. As a result the number of Carclo employees reduced by 7% to 2,003 at 31 March 2004. The success of the group is ultimately dependent upon our employees and I would like to thank them for their significant contribution. The board On 4 September 2003 Peter Lee and Adam Broadbent retired from the board and we announced the appointment of Christopher Ross as a non executive director. We have also appointed Noel Hutton as a non executive director with effect from 1 July 2004 to complete the reconstitution of the board. Noel was corporate finance partner at Hammonds solicitors and is currently a non executive director of Isle of Man Broadcasting plc. Christopher Mawe, the group finance director, left Carclo to take up the position of finance director at UK Coal. Replacing him as group finance director is Robert Brooksbank. Robert, aged 38, joined the board from his family firm, Brooksbank Industries Limited, where he has been business development director since 1997 and finance director since 2000. Robert qualified as a chartered accountant with Ernst & Young in London before spending two years in their Moscow office. He then joined Enron Europe in 1995 firstly as a member of their project finance team and latterly as part of their Eastern European Department. Outlook We have entered the new financial year with both of the group's continuing business segments in profit, benefiting from last year's restructuring and rationalisation. In recent months we have also seen much greater stability in customer demand which has reduced the volatility in our trading performance. With good growth prospects in specialist plastics and in low cost regions together with interesting new products and technologies in development, we feel that the group is well placed to deliver positive momentum. George Kennedy 14 June 2004 Chief executive's review Strategic overview When I wrote my review last year, we were hoping to deliver modest profit progression, further debt reduction and a small dividend increase. In fact only one of these objectives, modest debt reduction, was achieved. And yet, I write this review with much more confidence in our strategy and future than at any time in the last few years. 2003/04 was a poor year financially but a good year in terms of strategic and operational progress. We expected the year to be weak in the first half and stronger in the second half, and this indeed is how it turned out. What we did not expect was the continued erosion of demand in UK plastics which required further unplanned reorganisation and closures in the second half, and a weakening in global card clothing demand also in the second half of the year. We have continued to reduce costs and capacity where necessary. During the last year we completed the closure of two UK moulding plants and the CTP Precision Tooling operation. At the same time we expanded the new Czech Republic moulding facility. In Specialist Wire we reduced costs in the United States and France and have just completed a cost reduction exercise in our UK operations. The effect of this rationalisation shows in the geographical analysis of turnover where sales in the UK and United States fell but sales in the rest of the world grew by 19.5%. Although we anticipate some further modest reductions in UK sales, United States sales are growing again and we are enjoying strong and profitable growth in our China, India and Czech Republic facilities. Of greater significance to the long term value of the group is the progress we have made on new technologies. Last year we profiled four areas of development, Conductive Inkjet Technology ('CIT'), LED optics, specialist automotive lighting and new card clothing elements. I am pleased that all areas have made good progress. LED optics and specialist automotive lighting in particular will contribute significantly to sales in the coming year. In this report, we include updates on CIT, which has hugely exciting potential, and on our joint venture with Aquasol on injection moulded capsules used in drug delivery and also our manufacturing collaborations with Axis-Shield and Vectura in the diagnostic and drug delivery markets. Carclo has technology hungry customers and we operate at the leading edge of technical and quality performance. This gives us an unparalleled window on new applications and new technologies and the future of the group is in exploiting this privileged position to deliver growth and value to our shareholders. We have entered the new financial year with both Technical Plastics and Specialist Wire trading profitably. Our global capability is established and we are enjoying strong, profitable growth in low cost regions. Our access to, and ownership of, exciting new technologies gives us a springboard for future growth. I am more confident in the future of the group than at any time since the telecom collapse hit us in 2001. Operating review ---------------------------------------------------------------------------------- Carclo Technical Plastics Carclo Specialist Wire 2004 2003 2004 2003 ---------------------------------------------------------------------------------- Turnover - continuing operations Â£93.5m Â£100.8m Â£22.2m Â£22.5m Underlying operating profit Â£1.7m Â£3.9m Â£1.9m Â£2.6m Net assets Â£39.8m Â£43.5m Â£12.0m Â£11.6m Operating margin 1.8% 3.8% 8.5% 11.5% Return on capital employed 4.2% 8.9% 15.8% 22.5% Average number of employees 1,643 1,795 379 433 ---------------------------------------------------------------------------------- Carclo Technical Plastics The rationalisation of Carclo Technical Plastics, whilst driven principally by the need to reduce cost and capacity, has allowed us to streamline the management and plant structure. We now have four moulding facilities in the UK plus a specialist medical plant and a specialist optical plant. We have five moulding operations in the United States plus a specialist medical plant. We also have one facility in China and one in the Czech Republic, with a second under construction. All moulding operations come under an integrated management team based in the United States. Information technology and operating systems are common and fully integrated. All moulding operations trade as Carclo Technical Plastics. Also within Technical Plastics are the automotive product companies which manufacture specialist lighting, antennas and control cables at two UK sites. At the end of last year these companies were combined and will trade as CTP Automotive under a common management team. 2003/04 was a disappointing year for Carclo Technical Plastics as a whole. Sales declined by 7.3% to Â£93.5 million. Divisional profits fell by 56.6% to Â£1.7 million. The profit fall was most marked in the United States moulding operations where demand was particularly weak in the first half. Additionally profits on translation to sterling fell more sharply due to the weakening of the dollar against the pound. The United States enjoyed much improved demand in the second half. UK operations were ahead of the prior year with a particularly good performance from the medical and optical business sectors. The Czech Republic facility delivered a profit in its first full year of trading. However, these improved performances were insufficient to compensate for the poor result from the United States. In CTP Automotive, sales grew modestly but profits were behind the prior year due to weak demand for control cables in the first half. New products in specialist lighting and increased sales of multiband antennas have provided sales momentum but downward price pressure in automotive remains brutal and profit progression is proving elusive. Our sourcing programmes in Hungary and India are proving very successful and we intend to extend these initiatives over the coming year. Carclo Specialist Wire Specialist Wire consists of our card clothing business and two smaller precision engineering businesses manufacturing aerospace control cables and selling band saw machines and consumables. Card clothing had a very mixed year which started with good demand for short staple (mainly cotton) products driven by very buoyant demand from China, but weak demand for long staple (mainly wool and non woven) products. In the first half we benefited from our strong market positions in Turkey, Pakistan and India and our growing market position in China. In the second half the demand pattern unexpectedly reversed, short staple was weak and long staple started to recover. With capacity out of balance we had to reduce costs in the United States and France. Overall the division's performance was disappointing with profits down 27.0% on essentially unchanged sales. We enter the new year with capacity aligned to current demand. Our new plant in China is operational and is producing wire of a very high quality. Our Indian plant is also delivering excellent quality and productivity. Both of these operations will be further expanded this year. The smaller precision engineering businesses performed well and continue to make good progress. Ian Williamson 14 June 2004 Technological innovations Conductive Inkjet Technology Conductive Inkjet Technology Limited ('CIT') is a 50:50 joint venture between Carclo and Xennia Technology Limited. CIT has developed an innovative process to digitally print pure metals such as copper directly onto plastic films and moulded plastic parts. We have made excellent progress in the last year and our Phase II Chemistry is delivering excellent results in a wide range of applications. We have signed non-disclosure agreements with over fifty international companies and we have joint development agreements with a number of technology companies which are rapidly extending the scope of the inventions. The most exciting area of application is Radio Frequency Identification ('RFID'). RFID will replace bar codes in the retail industry within the next two to three years and production volumes will be vast. An RFID tag consists of a minute microchip connected to an antenna. CIT has developed the ability to print a high performance antenna directly onto plastic, eliminating the costly etch and plating process currently in use. Additionally, the digital control of the CIT process could enable direct connection of the chip and antenna, greatly reducing the manufacturing cost of RFID tags. CIT is opening up immense opportunities and we have responded by increasing CIT funding and resources. We plan to invest approximately Â£0.8 million in the coming year. Water soluble polymers Traditionally, pharmaceutical capsules have been made from gelatine, a material that results from the processing of bovine and other animal carcasses. In light of the recent publicity concerning BSE transmission and on ethical/religious grounds, there has been a strong impetus to develop alternative materials for use in capsule manufacture. In addition, improved materials and innovative product design will aid the development of new drug delivery options. For a number of years Carclo's medical operation has been pioneering the use of water soluble polymers in fine tolerance injection moulded applications. Since 1999 we have been working with Aquasol Ltd, an intellectual property company specialising in water soluble polymers and recently acquired by Stanelco plc. Carclo and Aquasol jointly own a patent for drug capsules manufactured by injection moulding from water soluble polymers. The capsule has unique features which provide improved control over the release of drugs and tamper evident protection. In collaboration with Stanelco plc we now plan to increase our market and business development resources on this important innovation. New medical devices We are fortunate to have been selected as manufacturing partner by two innovative UK based medical companies - Axis-Shield plc and Vectura Ltd. Axis-Shield Point of Care ('POC') is among the world leading companies in POC diagnostic tests for diabetes and other complaints. A new diagnostic system Afinion(TM) is in development which will provide rapid POC testing - i.e. in GP surgeries. Carclo is Axis-Shield's manufacturing partner for the test cartridges used in the Afinion(TM) which is due for launch in the next twelve months. Components for diagnostic testing is the strongest and fastest growing segment of our medical business. This is an area of particular technical strength for Carclo where our optical expertise, high volume manufacturing skills and polymer technology differentiate Carclo from its competitors. In 2004 we will produce over one billion probe tips and cuvettes at our medical plants in the United States and UK for a range of customers, of which Bayer Diagnostics is the largest. Vectura is an emerging pharmaceutical development company that is developing a range of inhaled drugs for the treatment of lung diseases and conditions where delivery via the lungs can provide significant benefits. Aspirair(R) is Vectura's high performance inhaler technology, designed to allow delivery with high lung penetration and low variability, essential for drugs that are intended for systemic delivery. Carclo has worked closely with Vectura's device design team throughout the development of Aspirair(R), and is the chosen manufacturing partner. Finance director's review 2004 2003 Â£million Â£million Turnover (continuing) 115.7 123.3 --------------------- Divisional operating profit 3.6 6.5 Central costs (1.3) (1.4) --------------------- Underlying operating profit from continuing operations 2.3 5.1 Share of operating loss in joint venture (0.2) - Operating loss from discontinued operations (0.2) (0.6) Goodwill amortised (1.0) (1.0) Non recurring items (6.2) (1.6) Net interest (1.3) (0.7) --------------------- (Loss) / profit before tax (6.6) 1.2 Taxation credit 2.4 1.7 --------------------- (Loss) / profit attributable to ordinary shareholders (4.2) 2.9 Ordinary dividend (0.6) (0.6) --------------------- (Deficit) / surplus for the year (4.8) 2.3 --------------------- Divisional operating margin from continuing operations 3.1% 5.2% Basic earnings per share (8.2)p 5.7p Underlying earnings per share 0.9p 8.2p Overview Profitability in the first half of the year was, as expected, impacted by a decline in the customer base, primarily as a result of the continuing exit of manufacturing business to lower cost base countries. However, the group responded positively and swiftly by rationalising its UK manufacturing base and closing its UK tool manufacturing operations. As a consequence group profitability improved significantly in the second half and all continuing operations ended the year in profit. Turnover from continuing operations decreased by 6.2% to Â£115.7 million and underlying operating profit from continuing operations fell by 54.7% to Â£2.3 million. Demand in the UK and United States weakened during the year. However, the group has progressively increased production at its facilities in the Czech Republic and China. During the year the group incurred net exceptional charges of Â£6.2 million (2003 - Â£1.6 million) arising from the rationalisation, closure or disposal of operations and surplus property. Interest payable in the year has reduced significantly to Â£1.3 million due to the continuing debt reduction programme. The comparable figure in 2003 was Â£2.2m although this was reduced to a net figure of Â£0.7 million by a one off credit of Â£1.5 million arising on the cancellation of interest swaps. The group received net tax refunds of Â£0.7 million representing repayments in respect of losses from prior periods. As a result of prior year losses and reliefs available, there is a net taxation credit of Â£2.4 million for the current year (2003 - Â£1.7 million credit). Dividend The group generated Â£2.3 million of free cash flow in the year and the board has therefore proposed a final ordinary dividend for the year of 0.8 pence per ordinary share. The total dividend for the year amounts to an unchanged 1.2 pence per ordinary share. Exceptional items The net exceptional charge of Â£6.2 million (2003 - Â£1.6 million) is analysed as follows: 2004 2003 Â£million Â£million ------------------------------------------------------------------------------- Rationalisation of technical plastics operations 1.0 1.1 Rationalisation of specialist wire operations 0.3 - (Release of provision) / provision for diminution in value of own shares (0.1) 0.1 --------------------- Total operating exceptional charges 1.2 1.2 Disposal of subsidiary undertakings - 1.1 Loss on termination of operations 5.3 2.3 Profit on disposal of surplus properties (0.3) (3.0) --------------------- 6.2 1.6 --------------------- Operating exceptional costs in respect of continuing operations were Â£1.2 million (2003 - Â£1.2 million). These costs related to the rationalisation of our UK technical plastics operations and the rationalisation of our specialist wire businesses in France and the United States. During the year we completed the closure of the in house tool manufacturing facilities which operated from three sites in the south of England. We also completed the closure of the moulding facility at Hatfield. These closures resulted in a further charge of Â£5.3 million disclosed as losses relating to the termination of operations (2003 - Â£2.3 million). Of the Â£5.3 million charge, Â£0.9 million related to the writing down of tooling plant and equipment and Â£0.5 million related to stock provisions. Net proceeds of Â£8.5 million were realised in respect of group property sales. This included Â£6.1 million in respect of the Acre Mills property in Huddersfield. Although we exchanged contracts on the sale of the Acre Mills site in the previous financial year shareholder approval was not obtained until June 2003. In addition we have sold other surplus property in the year for Â£2.4 million which gave rise to a profit of Â£0.3 million. This figure includes the sale of properties at Ecclesfield (Â£1.4 million) and Hatfield (Â£1.0 million). Financing During the year the group renegotiated its medium term loan facilities with its three principal lenders. We decided to surrender surplus facilities that were not required in order to secure more favourable covenant terms. In addition, we provided the lending banks with a fixed and floating charge over the assets of seven subsidiary companies. The group now has assured medium term facilities of Â£36.8 million repayable after 2006. Currency risk and hedging The group matches its foreign currency borrowings with foreign currency assets including goodwill to hedge fluctuations in the reported balance sheet net assets. As a result 43.9% of the group's term debt at the year end was denominated in dollars and euros. Trading currency income and expenditure is matched, where possible, by securing supplies from an appropriate economic region thereby providing a natural hedge. Where this is not possible to achieve, currency risk is managed through taking out forward contracts to secure the exchange rate applicable to the transaction. Balance sheet amounts receivable and payable are hedged when material to secure the gross proceeds in the appropriate currency. In this way the group seeks to minimise risks associated with foreign currency fluctuations wherever possible. Net debt and gearing 2004 2003 Â£million Â£million Underlying cash flow 6.4 10.9 Interest and tax (0.7) 1.1 Capital expenditure, other than for expansion (3.4) (3.1) ----------------------- Free cash flow 2.3 8.9 Other non recurring 4.2 (1.8) Equity dividends (0.6) - ----------------------- Cash flow available for corporate activities 5.9 7.1 Capital expenditure for expansion (0.6) (0.5) Investment in joint venture (0.4) - Sale of businesses - 1.5 Exchange movement 1.9 1.2 ----------------------- Decrease in debt in year 6.8 9.3 ----------------------- Net borrowings reduced in the year by Â£6.8 million to Â£28.1 million (2003 - Â£34.9 million). The group gearing level is now 60.2% (2003 - 67.1%). Over the last two years, the group has been actively focused on its debt reduction programme. Since 31 March 2002 when debt peaked at Â£44.2 million, we have reduced overall group debt by a total of Â£16.1 million. This has been achieved despite the significant level of exceptional costs relating to the rationalisation and closure of businesses. The reduction in debt was achieved from trading, sales of surplus property and taxation receipts. Free cash flow in the year was Â£2.3 million compared to Â£8.9 million in the prior year. This reduction reflects the impact of lower turnover in the year as well as increased pension contributions of Â£2.6 million (2003 - Â£1.8 million). In addition the group received Â£1.5 million less in taxation refunds compared to last year. Group capital expenditure at Â£4.0 million (2003 - Â£3.6 million) represented 74.5% of depreciation (2003 - 61.1%) and Â£4.8 million was expended on business reorganisations and closures. Pensions The group has two large defined benefit pension schemes which are closed to new members. The accounts continue to be produced under the provisions of SSAP 24. At the balance sheet date using the last actuarial valuation at 31 March 2001, the charge to the profit and loss account amounted to Â£1.4 million (2003 - Â£1.1 million) and represents the costs of accruing for benefits for the existing workforce. The actual cash contributions in respect of the pension schemes were Â£2.5 million (2003 - Â£1.7million). As required by the provisions of FRS17, the group has calculated the effect of applying this standard on the profit and loss account and balance sheet. If implemented the overall charge to the profit and loss account would be Â£1.4 million. Under the provisions of FRS17 a deficit of Â£13.8 million, net of tax, would have been recorded on the balance sheet (2003 - Â£24.7 million). The significant improvement in the level of this deficit is mainly due to favourable investment returns over the year. Since the year end, the group has made a Â£1.3 million payment to the schemes in respect of the deficit calculated under the provisions of the Minimum Funding Requirement (MFR) at 11 June 2003. Further successive annual payments will be made in order to eradicate the MFR deficit on the pension schemes. International accounting standards As part of the objective of harmonising the business environment within the European Union, the European Commission requires that all quoted companies operating within the European Union prepare financial statements in accordance with adopted International Accounting Standards ('IAS'). Consolidated financial statements of all listed companies must be prepared according to adopted IAS for accounting periods beginning on or after 1st January 2005. For Carclo this means that the first set of accounts prepared under these rules will be for the year ending 31 March 2006. The changes proposed under international accounting standards are sweeping and many aspects of the profit and loss account and balance sheet will be affected. Accordingly Carclo has already implemented a training programme for those personnel who will be affected by this change and a project team has been set up to assess the impact of IAS on the group as a whole. We are also undertaking a detailed analysis of the impact on the transition balance sheet as at 31 March 2004 which will form the opening position for the comparative information contained in the 31 March 2006 accounts. The provisional conclusions reached from the work completed to date is that the balance sheet impacts will include the adoption of IAS 19 'Employee Benefits' which reflects similar pension accounting concepts proposed within FRS17, the impact of which has been summarised in note 10 of the accounts. In addition the requirement to fully provide for deferred tax under IAS 12 will result in an additional provision. A further update on the impact of IAS will be included in the 2004 interim report published in December 2004. Robert Brooksbank 14 June 2004 Consolidated profit and loss account year ended 31 March 2004 2003 Â£000 Â£000 ------------------------------------------------------------------------------- Turnover Continuing operations 115,652 123,307 Discontinued operations 623 4,636 ----------------------- 116,275 127,943 Operating (loss) / profit ----------------------- Continuing operations - before exceptional costs and goodwill 2,309 5,094 - exceptional costs (1,210) (1,177) ----------------------- - after exceptional costs but before goodwill 1,099 3,917 Discontinued operations (226) (547) ----------------------- 873 3,370 Goodwill amortisation (1,042) (1,042) ----------------------- Operating (loss) / profit (169) 2,328 ----------------------- Continuing operations 57 2,875 Discontinued operations (226) (547) ----------------------- Operating (loss) / profit (169) 2,328 Share of operating loss in joint venture (115) - Disposal of subsidiary undertakings - (1,052) Loss on termination of operations (5,272) (2,342) Profit on sale of properties 337 2,955 ----------------------- (Loss) / profit before interest (5,219) 1,889 Net interest payable 1,331 702 ----------------------- (Loss) / profit on ordinary activities before taxation (6,550) 1,187 Taxation credit 2,390 1,725 ----------------------- (Loss) / profit attributable to ordinary shareholders (4,160) 2,912 Ordinary dividends 613 623 ----------------------- (Deficit) / surplus for the year (4,773) 2,289 ----------------------- Earnings per ordinary share Basic and diluted (8.2p) 5.7p Underlying 0.9p 8.2p ----------------------- Dividend per ordinary share 1.2p 1.2p ----------------------- Consolidated statement of total recognised gains and losses Year ended 31 March 2004 2003 Â£000 Â£000 ------------------------------------------------------------------------------- (Loss) / profit on ordinary activities after taxation (4,160) 2,912 Exchange losses on the translation of overseas assets (539) (607) ----------------------- Total gains and losses recognised since last annual report (4,699) 2,305 ----------------------- Consolidated balance sheet as at 31 March 2004 2003 Â£000 Â£000 Â£000 Â£000 ------------------------------------------------------------------------------- Fixed assets Intangible assets 15,939 16,981 Tangible assets 37,716 43,666 Investments 334 313 ------- ------- 53,989 60,960 Current assets Stocks 13,596 14,135 Debtors 24,546 32,723 Pensions prepayment due after more than one year 13,052 12,152 Cash at bank and in hand 7,693 10,140 ------- ------- 58,887 69,150 ------- ------- Creditors - amounts falling due within one year Bank loans and overdrafts 4,610 8,678 Trade and other creditors 22,836 24,215 Taxation 1,369 199 Dividends 613 623 ------- ------- 29,428 33,715 ------- ------- Net current assets 29,459 35,435 ------- ------- Total assets less current liabilities 83,448 96,395 Creditors - amounts falling due after more than one year 31,086 36,202 Provision for deficit in joint venture 120 - Provisions for liabilities and charges 5,522 8,161 ------- ------- Total net assets 46,720 52,032 ======= ======= Capital and reserves Called up share capital 2,594 2,594 Share premium 41,772 41,772 Revaluation reserve 852 950 Other reserves 1,330 1,330 Profit and loss account 172 5,386 ------- ------- Equity shareholders' funds 46,720 52,032 ======= ======= Consolidated cash flow statement year ended 31 March 2004 2003 Â£000 Â£000 ------------------------------------------------------------------------------- Cash flow from operating activities 1,654 6,182 Returns on investments and servicing of finance (1,350) (1,033) Taxation 694 2,155 Capital expenditure and financial investment 4,918 (651) Acquisitions and disposals (358) 1,483 Equity dividends paid (623) - ----------------------- Cash inflow before use of liquid resources and financing 4,935 8,136 Financing Decrease in debt (2,938) (11,924) Capital element of finance lease rentals (168) (551) ----------------------- Increase / (decrease) in cash in the year 1,829 (4,339) ======================= 2004 2003 Â£000 Â£000 ------------------------------------------------------------------------------- Reconciliation of net cash flow to movement in net debt Increase / (decrease) in cash in the year 1,829 (4,339) Cash outflow from decrease in debt and lease financing 3,106 12,475 ----------------------- Change in net debt resulting from cash flows 4,935 8,136 Exchange movement 1,885 1,201 ----------------------- Movement in net debt in the year 6,820 9,337 Net debt at beginning of the year (34,932) (44,269) ----------------------- Net debt at end of the year (28,112) (34,932) ======================= Turnover, operating (loss) / profit and net assets employed year ended 31 March 2004 2003 Operating Operating Turnover profit Net assets Turnover profit Net assets Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 -------------------------------------------------------------------------------------------- By class of business Continuing operations Technical plastics division 93,460 1,680 39,752 100,791 3,868 43,510 Specialist wire division 22,192 1,896 11,976 22,516 2,597 11,551 -------------------------------------------------------------- 115,652 3,576 51,728 123,307 6,465 55,061 Exceptional costs (1,210) (1,177) -------------------------------------------------------------- 115,652 2,366 51,728 123,307 5,288 55,061 Discontinued operations Technical plastics division 623 (226) - 2,350 (598) 1,436 Specialist wire division - - - 2,286 183 - Exceptional costs - - - - (132) - -------- -------- Operating assets 51,728 56,497 Unallocated net liabilities (note 1) (5,008) -------- ------------------ -------- 116,275 46,720 127,943 52,032 -------------------------------------------------------------- Divisional operating profit 2,140 4,741 Central administration costs (1,267) (1,371) Goodwill amortisation (note 2) (1,042) (1,042) -------- -------- Operating (loss)/profit (169) 2,328 ======== ======== By geographical area Continuing operations United Kingdom 85,386 3,228 36,458 89,476 5,024 36,869 United States of America 19,982 711 8,627 25,223 1,939 11,639 Rest of World 10,284 (363) 6,643 8,608 (498) 6,553 -------------------------------------------------------------- 115,652 3,576 51,728 123,307 6,465 55,061 Exceptional costs United Kingdom - (1,210) - - (1,177) - -------------------------------------------------------------- 115,652 2,366 51,728 123,307 5,288 55,061 Discontinued operations United Kingdom 623 (226) - 4,636 (415) 1,436 Exceptional costs United Kingdom - - - - (132) - -------- -------- Operating assets 51,728 56,497 Unallocated net liabilities (note 1) (5,008) (4,465) ------- ------------------ -------- 116,275 46,720 127,943 52,032 -------------------------------------------------------------- Divisional operating profit 2,140 4,741 Central administration costs (1,267) (1,371) Goodwill amortisation (note 2) (1,042) (1,042) ------- ------- Operating (loss)/profit (169) 2,328 ======= ======= Geographical segment - by destination United Kingdom 49,846 55,530 Rest of Europe 28,628 30,049 Rest of World 37,801 42,364 ------- ------- 116,275 127,943 ------- ------- Notes 1. Unallocated net liabilities include interest bearing assets and liabilities, investments, taxation balances, capitalised goodwill and head office net assets. 2. Goodwill amortisation relates to continuing businesses within the technical plastics division. This information is provided by RNS The company news service from the London Stock Exchange

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