Final Results
Hunting PLC
06 March 2003
6th March 2003
HUNTING PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
Hunting announces preliminary results in line with market expectations
• Operating profit of £24.4m (2001: £44.1m)
• Profit before tax and exceptional items of £19.1m (2001: £38.0m)
• Earnings per share - basic 4.1p (2001: 36.9p, before exceptional items
14.9p)
• Dividend per share 3p (2001: 6p plus a special dividend of 10p)
• Successful integration of acquisitions which made good contributions
to the business.
• Tubular Resources, a joint venture for Hunting Energy with China's
Tianjin Steel, formed to take advantage of the energy demand growth in
Southeast Asia
Commenting on the results, Dennis Proctor, Hunting PLC Chief Executive, said:
'2002 has been a testing time for the oil and gas service industry, particularly
as the market has defied basic forecasting principles. We have continued to
manage the business with a focus on controlling costs and have taken the
opportunity to make acquisitions, which are proving successful.
'We expect that market conditions in 2003 will improve and we are well placed to
take advantage of this recovery.'
Enquiries:
Hunting PLC 020 7321 0123
Dennis Proctor, Chief Executive
Dennis Clark, Finance Director
Brunswick Group Limited 020 7404 5959
Tom Buchanan
Melissa McVeigh
Notes to Editors:
Hunting PLC is an international oil services company providing support solutions
to the world's largest oil and gas companies.
Chairman's Statement
Turnover and profit before taxation for the year to 31 December 2002 were £951m
and £19.1m respectively.
As we indicated during the year, 2002 was a difficult period for the industry.
Oil and gas drilling in North America was substantially below that which had
been anticipated, and our Canadian mid-stream operations were affected by
adverse weather conditions in the early part of the year. However, our North Sea
activities were busy and successful.
Following the decision in 2000 to exit Defence activities and to concentrate on
the Company's areas of strength in Energy Services, most of which was
successfully achieved in 2001, the process of focussing on the two core
platforms Gibson Energy, our midstream activity and Hunting Energy, our upstream
operation, has continued.
As part of the ongoing expansion of our chosen areas, we acquired Moose Jaw
Asphalt in Canada, a leading supplier of specialist products derived from heavy
oil, and Roforge, a manufacturer of valves for the energy and petrochemical
sectors, in France.
Natural gas prices in North America were weak during early 2002 as a result of
an abnormally mild winter. Although prices improved as the year progressed, this
was not followed by an expected upsurge in drilling in the U.S., although Canada
recovered more strongly at the end of the year. The Company's Tenkay oil and gas
production activity was able to benefit from good prices during the later
months.
I stated last year that we would continue to review future dividends both in the
light of current results and expectations and the need to provide adequate
resources for future expansion. We are recommending a final dividend of 2.0p per
share, giving a total of 3.0p for the year.
Our senior independent Director, Alan Fryer, retired from the Board in September
after eight years. I would like to pay tribute to his energetic and constructive
contribution during a period of great change. In his place we were pleased to
appoint Hector McFadyen, a Canadian with substantial experience of the North
American energy sector, as a non-executive Director. Iain Paterson has taken
over as the senior independent Director.
Turmoil in the energy industry and in world stock markets produced challenging
conditions for both investors and your Company during 2002. If current trends in
oil and gas prices and activity continue, I anticipate an improved market
environment during the year ahead.
I thank all of our staff for their continued dedication and hard work.
Richard Hunting
Chairman
Chief Executive's Review
Introduction
Our strategy remains the same - to direct the Company's activities towards oil
and gas services with full knowledge of the cyclical climatic and geopolitical
influences inherent to the industry. The underlying fundamentals of increasing
hydrocarbon demand and slower production growth provide excellent opportunities
for our global assets, our management and our shareholders. In 2002, we were
subject to events which dampened our initial optimism for a second half
recovery. However, improved drilling rig activity and a sustained gas price were
welcome at the year end.
Despite having oil and gas prices exceeding historical averages, 2002 drilling
and exploration activity levels defied basic forecasting principles. Higher
commodity prices were traditionally followed by greater rig activity and a
larger number of well completions. However, the oil and gas companies were
heavily influenced by the event driven nature of 2002. Beginning with the
collapse of the energy traders, extended road bans in Canada, hurricanes in the
Gulf of Mexico, political unrest in Venezuela, an anaemic world economy and
finally, the potential conflict in Iraq, forced capital expenditure caution and
balance sheet discipline on the world's oil and gas operators.
The impact of these events adversely affected the Company and management
responded with reductions in overheads and inventory and manufacturing
consolidation in those business areas affected by the downturn.
While these decisions were reactive to market events, management remained
proactive in the following areas.
Acquisitions
Moose Jaw Asphalt was acquired 2 January 2002 by Gibson Energy. In spite of
volatile oil markets and weather related delays, Moose Jaw contributed good
earnings for the year.
Roforge, which was acquired during the year by Hunting Petroleum France, made an
excellent contribution with an extension of its product and service lines.
Research and Development
Three patents were issued to Hunting Energy during 2002. Although different in
concept and application, all three are targeted to offshore, deep well
completions.
Business Development
Tubular Resources, a joint venture with China's Tianjin Steel, was formed in
late 2002 to expand Hunting Energy's presence in Southeast Asia. Energy demand
growth for Southeast Asia is forecast to be the largest on a percentage basis of
any region in the world. Tianjin Steel oil country tubulars have been accepted
by global oil and gas companies and utilised in high temperature, high pressure
wells both onshore and offshore. This exclusive distribution agreement will
enable the Company to accelerate sales of higher margin, ancillary products and
services.
Management's commitment to health and safety, the environment and quality
products gained further results in 2002. Five of the Company's seven North
American manufacturing facilities recorded zero lost time accidents. A five year
analysis concluded that accident claims fell to 2 in 2002 versus a high of 88 in
1998. The Aberdeen, Scotland, facility once again received the prestigious
British Safety Council 5 Star Award.
Gibson Energy
Energy prices, along with poor economic conditions and the subsequent decline in
activity levels, led to lower than expected results for the majority of Gibson's
businesses for 2002. Crude oil prices were weak until the end of the second
quarter but made a significant recovery in the third quarter to finish the year
at record levels. Canadian industry activity was slow to respond but major
increases in drilling and exploration occurred near the end of the year, which
is expected to continue in 2003.
Marketing activities, which comprise the buying and selling of crude oil,
diluent, and the custom terminalling of trucked oil accounted for 31% of
Gibson's operating profit. Margins were narrow for much of the year due to the
lower price for Canadian heavy oil which resulted in a lower demand for diluents
and blending volumes. A recovery in the second half of 2002 bolstered sales.
Truck transportation of crude oil, diluent, LPG, asphalt and other energy
products contributed 20% of Gibson's 2002 profit, and maintained steady volumes
through the year, although slightly lower than 2001.
Terminal activities, together with Pipelines, contributed the largest share
(32%) of profit despite a slow start to 2002. Volumes were near expectations
for the year, increasing in the fourth quarter due to increased activity from
new projects completed in Edmonton (Suncor Millennium) and Hardisty (Athabasca
Pipeline). There were no major changes in Provost and Bellshill Lake pipeline
volumes, which were sustained for most of the year.
Processing and Distribution activities which comprise Canwest Propane, NGL
Marketing, Hardisty Fractionation Plant, Natural Gas Processing and the Moose
Jaw Asphalt business contributed 17% of operating profit.
Canwest Propane finished the year strongly after a full year's contribution from
acquisitions made in 2001. Branch operations within the operational orbit now
stretch from Vancouver Island on the West Coast of Canada through the interior
of British Columbia across Alberta, and eastward into Saskatchewan. Even though
warm early winter temperatures reduced propane demand in the fourth quarter of
2002, the propane distributed by Canwest is at a record level.
Narrower margins for the Marketing of natural gas liquids ('NGL') and the
Hardisty Franctionation Plant produced results that were lower than expected.
Even though NGL production was down, the volumes processed at the Hardisty plant
increased over the year to finish strongly.
Natural Gas Processing returns continued to disappoint as gas production
delivered to Gibsons' Pouce Coupe and Rainbow Lake Gas Plants declined.
Moose Jaw Asphalt, which processes up to 190,000 tonnes/year of 'A' grade
asphalt cement for the May-October road paving season, was acquired in January,
2002. Spring weather delayed the commencement of seasonal road construction and
full asphalt production did not occur until the end of June. Volumes were
steady through to the end of the season but resulted in lower earnings for the
first full year of operations due to the Spring weather and narrow sales
margins.
Considering that there was a weak start to the year 2002 and slow recovery in
energy activity, we anticipate better market conditions in 2003. Most of
Gibson's marketing, terminalling and distribution activity finished on a
stronger note than earlier in the year. Increased volumes of business are
expected for most business areas with facility enhancements at the Moose Jaw
Asphalt plant to provide a longer production season.
Hunting Energy Services
The anticipated recovery in drilling activity in North America failed to
materialise in 2002. The effects of a slow global economy, coupled with the
second warmest winter recorded, caused operators to take a wait and see approach
with regards to spending. Additional concerns about balance sheet health,
partially caused by the debacles in the merchant energy trading business, added
further pressures on drilling activity. Paradoxically, with US$30 oil and US$5/
mcf natural gas, rig counts for the year in North America were at their lowest
levels since the industry depression of 1999.
Ultimately the supply and demand of the North American natural gas market will
be the driver for an industry recovery. In the United States, natural gas
production has declined for six consecutive quarters setting up the basis for a
drilling recovery. While activity may be slow to recover in early 2003, it is
anticipated that drilling activity will exceed 2002.
The Company's assets are well poised to take advantage of the drilling recovery.
While the OCTG distribution business remains extremely difficult in light of
weak tubular pricing, current inventory levels and values should deliver
adequate returns as business recovers.
Manufacturing assets continue to focus on increasing productivity in order to
improve margins. The benefits of license agreements with two major oilfield
original equipment manufacturers have improved Hunting's position in the
wireline/slickline tool business and market share is increasing in this less
cyclical environment.
Research and development in the premium connection segment continues to allow
Hunting to align itself to customers with new products. Following the award of
three patents in 2002, additional product offerings are planned for introduction
into the market in 2003.
The Aberdeen plant ended the year 2002 with the second highest profit since
start up in 1977, only surpassed in 2001. The trend in the market is for the
majors to sell off assets to independents, as can be seen by the recent sale of
the Forties field. As a result, our customer base will be directed more toward
the independent operator. The introduction of the new Edzell threading plant
has allowed an increase in productivity, and should lead to increased business
to convert plain end pipe from Japan.
The mainland Europe market has been challenging during 2002, and will continue
to warrant close attention in the coming year. However, all indications are
that the market will become stronger in the latter part of 2003. Holland is an
integral part of our supply chain, located in an excellent position to offer
services to Northern Europe, Russia and Africa.
Tenkay Resources
Tenkay Resources had a successful 2002 in terms of production, development and
exploration, although product pricing per Net Equivalent Barrel on average for
the year was marginally lower than 2001 but with significantly higher prices in
the fourth quarter. Average oil and gas prices in the first quarter were
US$21.59 and US$2.81 increasing to US$28.27 and US$4.19 in the last quarter.
The combination of lower average prices with a higher depletion charge caused
profit to be lower than the prior year. Oil and natural gas production
increased by 5% following successful drilling in the shallow waters of the Gulf
of Mexico. The company participated in the drilling of 16 wells offshore
Louisiana and Texas with 11 successes. Year end reserves of oil and natural gas
on a SEC basis were 2.34m barrels compared with 2.12m barrels at the end of the
previous year. Production during the year was 0.47m barrels.
EA Gibson Shipbrokers
Poor trading conditions in the first half of the year in all sectors were only
partially compensated by strong tanker markets in Gas, Dry, Bulk and
particularly Oil in the fourth quarter.
During the year, 50% of Nordico, an LPG product broker, was acquired. This has
now been renamed Gibson Gas and operates from Oslo, Hong Kong and London.
Others
Hunting Petroleum France acquired Roforge on 1 January 2002, which was
successfully integrated and made an excellent contribution to the results of the
French based companies. The Roforge customer service strategy has been expanded
with the development of new valve products. Both Interpec and Larco made
further progress during the year.
Hunting Industrial Coatings showed an improved result for the year. New
applications on light truck and sports utility vehicles for waterborne coating
formulations with large automotive manufacturers continued to expand in both the
U.S. and Europe. The pipeline rehabilitation operation made a good start in its
first full year of business and is well positioned to capitalise on growth
opportunities in the ageing potable water, sewer and gas pipeline
infrastructures in the USA and Europe.
Aero Sekur continues its planned recovery and the extension of the range of
products it manufactures. A particular highlight of the year was the delivery of
21,000 biological and chemical masks to the Italian Ministry of Defence.
Field Aviation Company
Despite the continuing downturn in the air transport industry, the company had
an excellent year and through its sales and modification capabilities in Canada,
was able to take advantage of declining aircraft values to purchase, refurbish
and sell quality aircraft at good margins. In addition, the parts manufacturing
division saw an increase in sales due to aircraft life extension programs
because of funding constraints for new aircraft. The demand for special mission
aircraft engineering modification work has improved and during the year the
company secured additional contracts.
Outlook
The oil and gas industry enters 2003 cautiously but with expectations that
market conditions will improve from the very difficult environment during 2002.
U.S. onshore and offshore activity will be dependent on the outcome of wider
economic and geopolitical events. Gas prices are expected to remain historically
high while oil prices will remain volatile. Global exploration and production
budgets are expected by industry observers to increase by 4% over 2002. While
North Sea performance will decline, our Canadian assets should benefit from the
current positive environment and opportunities for both our upstream and
mid-stream services. Continued demand growth in the Far East will benefit our
China and Singapore operations.
Dennis Proctor
Chief Executive
Finance Director's Review
Overview
Following a year of record activity and profits and the sale of the Defence
businesses, 2002 was a more difficult year with lower returns.
Total sales for the year to 31 December 2002 were £951m (2001: £1,035m) with
operating profit of £24.4m, (2001: £44.1m).
Gibson Energy's sales were £638.1m (2001: £587.3m) of which marketing sales were
£508.4m (2001: £448.8m). Operating profits were £11.7m (2001: £19.0m). While
this was below 2001, the second half of the year showed a marked improvement
over the first half in both sales and operating profits. Increased industry
activity from higher prices and earnings from the acquisition of Moose Jaw
Asphalt Inc. were contributing factors to this second half improvement.
Hunting Energy Services' turnover was 13% lower at £233.9m in 2002 as it
experienced a year of significantly lower activity particularly in the U.S.,
Gulf of Mexico and Canada but there was a strong performance from the North Sea
based facilities. Tubular product sales and margins were below 2001 levels but
margins on accessories and other products were maintained. Operating profit
reduced from £21.5m in 2001 to £8.3m in 2002.
Tenkay Resources' oil and gas reserves increased from 2.12m equivalent barrels
at 31 December 2001 to 2.34m at 31 December 2002. Turnover and operating profit
were lower in 2002 at £6.9m (2001: £7.8m) and £2.1m (2001: £4.0m) respectively
due to pricing and depletion changes.
EA Gibson Shipbrokers experienced a much depressed market but with some recovery
in fixtures in the closing months resulting in turnover reducing from £15.6m in
2001 to £11.8m in 2002. Operating profit was lower at £0.9m (2001: £2.5m).
Other subsidiaries' results recovered strongly with an operating profit of £1.4m
(2001: loss of £1.8m) from turnover of £60.6m (2001: £56.1m). This includes a
full year's contribution from Roforge in France which was purchased on1 January
2002.
Exchange Rates
Both the US and Canadian Dollars, which are the Group's principal currencies,
weakened during the year averaging 1.50 and 2.36 respectively, compared with
1.45 and 2.24 in 2001. Year end rates which adversely affected the conversion
of overseas net assets into sterling by £8.2m were 1.60 and 2.53 respectively
compared with 1.46 and 2.32 at the end of 2001.
Taxation
The taxation charge for the year was £7.4m which is an effective rate of 38.7%
(2001: 38.9% before exceptional items). While the rate of Canadian tax on
Canadian profits has reduced, Canadian and US taxation rates continue to keep
the Group's tax charge above the UK Rate.
Group Shareholders' Funds
After allowing for the prior year charge to reserves for deferred taxation of
£8.1m, on the adoption of FRS 19 'Deferred Tax', the reduction in shareholders'
funds in the year was £4.4m. This reflects the adverse impact of foreign
exchange rates on net assets of overseas subsidiaries of £8.2m, offset by a
retained profit of £1.1m, a property revaluation reserve increase of £2.3m and
£0.4m new shares issued.
Financing and Financial Risk Management
The Group's treasury function is a centralised service centre with policies and
procedures approved by the Board. These cover funding, banking relationships,
and foreign currency, interest rate and oil price exposures.
There are strict controls on the use of financial instruments, and on the
exposure to banks and other parties on borrowing facilities, investment of
surplus cash and in the management of foreign currencies, interest rates and oil
prices.
A new £115m committed multi-currency borrowing facility was arranged with core
relationship banks on 18 July 2002, comprising a fixed term tranche of £45m at
LIBOR plus 0.75% maturing in July 2005, and a revolving credit tranche of £70m
at LIBOR plus 0.85% maturing in July 2007. This facility, which replaced
facilities expiring in 2002 and 2003, and the US$50m Private Placements Notes
maturing in 2005 and 2007, together with other borrowing lines provide £205m of
facilities, of which £163m are committed facilities and of the total facilities,
£112m were drawn at the year end. These facilities provide the Group with
sufficient liquidity to meet anticipated future requirements.
Currency Options are used to reduce currency risk movements on the Group's
results, by hedging approximately 50% of each year's budgeted Canadian and US
Dollar earnings into Sterling. Currency exposure on the balance sheet is, where
practical, reduced by financing assets with borrowings in the same currency.
Forward foreign exchange contracts are used to cover the net exposure of
purchases and sales in non-domestic currencies.
Net interest payable was £5.3m (2001: £6.1m) which was 4.6 times covered.
Interest expense is hedged using interest rate swaps, interest rate caps, and
forward rate agreements. These instruments protect against adverse movements in
interest rates. At 31 December 2002 interest rate swaps and caps covered 58% of
net borrowings.
Fluctuations in the selling price of crude oil inventories are managed by using
oil price futures, swaps and options.
Surplus short-term cash is invested with approved banks or money market funds.
Acquisitions and Disposals
Two acquisitions were made during the year, Moose Jaw Asphalt Inc. in
Saskatchewan, Canada for £14.1m and Roforge in France for £3.7m. Additionally,
certain businesses and assets of the ECL Group in Alberta, Canada were acquired
for £2.8m. The sale of the Group's Zimbabwe subsidiary was completed effective
8 November 2002 for £0.3m.
Earnings Per Share
Basic earnings per share were 4.1p (2001: 14.9p before exceptional items) on an
average of 100.8 million shares in issue during the year.
Dividends
An interim dividend of 1.0p (2001: 2.0p) was paid on 5 December 2002. A final
dividend of 2.0p per share is now proposed giving a total dividend for the year
of 3.0p (2001: 6.0p plus a special dividend for that year of 10.0p) payable on 3
July 2003 to the shareholders on the register at 6 June 2003.
Cash Flow
Free cash inflow (being cash flow before capital expenditure, acquisitions,
disposals and ordinary dividends) was £21.4m compared to £31.7m in the previous
year. Working capital increased by £6.1m following a reduction in inventories
of £22.3m, an increase in debtors of £26.1m and a decrease in creditors of
£2.3m.
In recent years the Group has made a significant re-investment of cash in the
replacement and expansion of its principal activities. In 2002, the acquisition
programme was significantly lower than the previous year at £20.8m (2001:
£51.5m) but the level of capital expenditure was maintained at £32.5m (2001:
£26.2m). Of this £20.7m was replacement capital and £11.8m new business
expenditure.
Group net debt at 31 December 2002 was £97.6m (2001: £73.2m) to give gearing,
defined as net debt as a percentage of shareholders' funds and minority
interests, of 50% (2001: 36%).
Pensions
The Group continues to account for pensions under SSAP 24 'Accounting for
Pension Costs'. A triennial valuation of the Group's UK Defined Benefit Scheme
('the Scheme') as at 5 April 2002 was completed. Included in the Consolidated
Balance Sheet at 31 December 2002 is £18.2m representing the pension prepayment
on a SSAP 24 basis (£12.7m net of deferred tax). The funding position of the UK
Defined Benefit Scheme under FRS 17 principles shows that at 31 December 2002
assets exceeded liabilities by £20.3m. The Scheme remains funded on both a SSAP
24 and a FRS 17 basis. At 31 December 2002 the Scheme, which was 49% invested
in equities, was closed to new UK employees who will in its place be offered
membership of a new defined contribution scheme.
Property Revaluation
Group properties were revalued at 31 December 2002 giving rise to a net increase
of £2.3m in the Group's property revaluation reserve.
Accounting Standards
The transitional arrangements permitted under FRS 17 have been exercised and the
required disclosure is contained within note 38 to the financial statements.
FRS 19 'Deferred Tax' was adopted during the year resulting in a prior year
charge to reserves of £8.1m and a restatement of comparative figures in the
Balance Sheet.
Going Concern
The Directors, after making enquiries and on the basis of current financial
projections and the facilities available, believe that the Company and the Group
have adequate financial resources to continue in operation for the foreseeable
future. For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
Dennis Clark
Finance Director
Consolidated Profit and Loss Account
For the Year ended 31 December 2002
2002 2001
Notes £m £m
Turnover 1 951.3 1,035.3
Cost of sales (872.1) (919.2)
------------ ------------
Gross profit 79.2 116.1
Net operating expenses (54.9) (72.0)
------------ ------------
Group operating profit 24.3 44.1
Share of operating profit in joint venture undertaking 0.1 -
------------ ------------
Total operating profit 1 24.4 44.1
Exceptional items:
Profit on disposal of discontinued operations - 29.9
Impairment of net assets of de-consolidated subsidiary - (2.9)
------------ ------------
Profit on ordinary activities before interest 24.4 71.1
Interest receivable and similar income 2.1 2.3
Interest payable and similar charges (7.4) (8.4)
------------ ------------
Profit on ordinary activities before taxation 19.1 65.0
Taxation on profit on ordinary activities (7.4) (19.7)
------------ ------------
Profit on ordinary activities after taxation 11.7 45.3
Equity minority interests (3.6) (4.4)
------------ ------------
Profit for the financial year 8.1 40.9
Dividends (including non-equity) (7.0) (19.9)
------------ ------------
Retained profit for the year 1.1 21.0
------------ ------------
Basic earnings per 25p ordinary share 4.1p 36.9p
------------ ------------
Diluted earnings per 25p ordinary share 4.1p 36.9p
======= =======
There are no material differences between the results disclosed above and the
results on an unmodified historical cost basis.
The profit for the year to 31 December 2002 arises from the Group's continuing
operations.
The comparative figures have not been restated for the adoption of FRS 19 '
Deferred Tax' as the impact on the Consolidated Profit and Loss Account is
immaterial.
Consolidated Statement of Total Recognised Gains and Losses
For the Year ended 31 December 2002
2002 2001
£m £m
Restated
Profit for the financial year 8.1 40.9
Revalution of fixed assets 2.3 -
Currency translation differences on foreign currency net
investments (8.2) (1.6)
------------ ------------
Total recognised gains and losses for the year 2.2 39.3
------------
Prior year adjustment (8.1)
------------
Total gains and losses since last annual report (5.9)
=======
Consolidated Balance Sheet
At 31 December 2002
2002 2001
£m £m
Restated
Fixed assets
Intangible assets 35.6 36.7
Tangible assets 155.9 138.4
Investment in joint venture and associated undertakings 1.7 1.0
Other investments 5.8 6.8
------------ ------------
199.0 182.9
------------ ------------
Current assets
Stocks 98.3 123.9
Debtors 175.7 156.8
Investments 4.3 6.1
Cash at bank and in hand 10.0 17.5
------------ ------------
288.3 304.3
Creditors: amounts falling due within one year (159.4) (173.6)
------------ ------------
Net current assets 128.9 130.7
------------ ------------
Total assets less current liabilities 327.9 313.6
Creditors: amounts falling due after more than one year (107.7) (92.4)
Provisions for liabilities and charges (23.4) (18.7)
------------ ------------
196.8 202.5
======= =======
Capital and reserves
Called up share capital 73.2 73.1
Share premium 41.5 41.2
Revaluation reserve 15.5 14.1
Profit and loss account 26.1 32.3
Shareholders' funds
Equity interests 108.4 112.8
Non-equity interests 47.9 47.9
156.3 160.7
Equity minority interests 40.5 41.8
------------ ------------
196.8 202.5
======= =======
The comparative figures have been restated for the adoption of FRS 19 'Deferred Tax'.
Reconciliation of Movements in Consolidated Shareholders' Funds
For the Year ended 31 December 2002
2002 2001
£m £m
Restated
Profit for the financial year 8.1 40.9
Dividends (7.0) (19.9)
------------ ------------
Retained profit for the year 1.1 21.0
Currency translation differences on
foreign currency net investments (8.2) (1.6)
Revaluation of fixed assets 2.3 -
Share capital issued 0.4 0.2
Goodwill written back on disposals - 10.6
------------ ------------
Net (reduction) addition to shareholder's funds (4.4) 30.2
Opening shareholders' funds (originally £168.8m
before deducting prior year adjustment of £8.1m) 160.7 130.5
------------ ------------
Closing shareholders' funds 156.3 160.7
======= =======
Consolidated Cash Flow Statement
For the Year ended 31 December 2002
2002 2001
£m £m
Net cash inflow from operating activities 38.4 55.7
------------ ------------
Returns on investments and
servicing of financing of finance
Interest received 1.7 3.4
Interest paid (6.6) (9.2)
Preference dividends paid (3.9) (3.9)
Dividends paid to minorities (2.2) (1.8)
------------ ------------
Net cash (outflow) from returns on
investments and servicing of finance (11.0) (11.5)
------------ ------------
Taxation paid (6.0) (12.5)
------------ ------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (32.5) (26.2)
Sale of tangible fixed assets 2.1 2.1
Purchase of trade investments (0.1) (0.9)
------------ ------------
Net cash (outflow) from capital expenditure
and financial investment (30.5) (25.0)
------------ ------------
Acquisitions and disposals
Purchase of subsidiary undertakings and businesses (20.8) (51.5)
Net cash (overdrafts) acquired with subsidiary undertakings 1.8 (0.7)
Purchase of joint venture undertaking (0.8) -
Net proceeds from disposal of operations 0.3 95.9
Net cash disposed of with subsidiary undertakings - (16.4)
Net proceeds from disposal of joint venture and associated undertakings 0.1 4.1
Proceeds from disposal of other investments 0.5 8.7
------------ ------------
Net cash (outflow) inflow from
acquisitions and disposals (18.9) 40.1
------------ ------------
Equity dividends paid (5.0) (21.1)
------------ ------------
Net cash (outflow) inflow before use
of liquid resources and financing (33.0) 25.7
------------ ------------
Management of liquid resources
Net movement in short term money market deposits 1.8 5.7
------------ ------------
Financing
Ordinary share capital issued 0.4 0.2
(Decrease) in borrowings due within one year (5.4) (0.3)
Increase (decrease) in borrowings due beyond one year 26.6 (24.8)
Capital element of finance leases (0.1) (0.2)
------------ ------------
Net cash inflow (outflow) from financing 21.5 (25.1)
------------ ------------
(Decrease) increase in cash (9.7) 6.3
======= =======
Notes
1. SEGMENTAL ANALYSIS
Turnover and operating profit, including joint venture and associated undertakings but before net interest costs,
exceptional items and taxation, are shown below.
2002 2002 2002 2001 2001 2001
Turnover Operating Net Turnover Operating Net
profit assets profit assets
(loss) (liabilities) (loss) (liabilities)
£m £m £m £m £m £m
Restated
ACTIVITY
Oil and gas marketing
and distribution 638.1 11.7 109.1 587.3 19.0 90.4
Oilfields services and
tubular products 233.9 8.3 123.1 268.3 21.5 131.0
Share of associated
undertakings - - 0.8 - - 1.0
Exploration and other
activities 79.3 4.3 41.4 79.5 4.7 34.3
Share of joint venture
undertaking - 0.1 0.9 - - -
---------- ---------- ---------- ---------- ---------- ----------
Continuing operations 951.3 24.4 275.3 935.1 45.2 256.7
Discontinued operations
Defence - - - 100.2 (1.1) -
---------- ---------- ---------- ---------- ---------- ----------
951.3 24.4 275.3 1,035.3 44.1 256.7
---------- ---------- ---------- ----------
Net funding (97.6) (73.2)
Pension fund
prepayment (net) 12.7 11.0
Central assets 6.4 8.0
---------- ----------
196.8 202.5
---------- ----------
AREA OF OPERATION
Continuing operations
Europe - UK 63.0 4.4 4.3 68.0 8.2 1.5
- Continent 26.2 1.3 18.3 29.0 (0.8) 9.5
Canada 690.0 12.9 132.1 624.3 19.7 118.6
US 169.1 6.0 117.4 209.7 18.0 125.4
Share of joint venture - UK - 0.1 0.9 - - -
Share of associates - Other - - 0.8 - - 1.0
Other 3.0 (0.3) 1.5 4.1 0.1 0.7
---------- ---------- ---------- ---------- ---------- ----------
951.3 24.4 275.3 935.1 45.2 256.7
Discontinued operations
Europe - UK - - - 89.9 0.2 -
- Continent - - - 2.7 (0.4) -
Canada - - - 2.2 (0.3) -
US - - - 5.4 (0.6) -
---------- ---------- ---------- ---------- ---------- ----------
951.3 24.4 275.3 1,035.3 44.1 256.7
---------- ---------- ---------- ----------
Net funding (97.6) (73.2)
Pension fund
prepayments (net) 12.7 11.0
Central assets 6.4 8.0
---------- ----------
196.8 202.5
---------- ----------
Inter-divisional turnover is not material and turnover by destination is not
materially different to the area of operation. Most of the Group's financing is
arranged centrally and is not specifically attributable to individual activities
or geographic areas.
2. The summary of the results for the year ended 31 December 2002 does not
constitute full financial statements within the meaning of section 254 of the
Companies Act 1995. This summary information has been extracted from the full
consolidated accounts for the year ended 31 December 2002 which will be
delivered to the Registrar of Companies and an unqualified auditors' report has
been given on the accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
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