Interim Results
Smiths Group PLC
13 March 2002
Smiths Group: Interim Results
for the 6 months ended 31 January 2002
Highlights:
- Operating profit of £201m from continuing activities, 11% down
- Strong cash-flow maintained, profit-to-cash conversion at 80%
- Growing defence activity is limiting the impact of civil aerospace downturn
- Rapid restructuring has reduced the cost base in all divisions
- Sale of marine seals will bring debt to circa £900m
- Smiths selected by Boeing for 767 tanker refuelling system
- Dividend maintained at 8.75p
- More confidence in outlook for second half
Commenting on the results, Keith Butler-Wheelhouse, Chief Executive said:
'This was an exceptionally tough six months for many companies. Against
challenging circumstances, our 13% first-half margins and 80% profit-to-cash
conversion show the resilience of Smiths Group. Meanwhile, we have been focusing
on disposals and restructuring so that we can return to growth as the economic
cycle starts to recover. Our defence business is already growing strongly and
recent acquisitions will help Medical make a bigger contribution. We are now
more confident about the outlook for the second half of the year.'
Further information:
Russell Plumley
+44 (0) 20 8457 8203
russell.plumley@smiths-group.com
Reported on a fully consolidated basis, including discontinued activities and
after exceptionals and amortisation, Smiths Group recorded pre-tax profit of
£123 million (2001: £97m) and earnings per share of 14.0p (7.7p) in the first
half of the current year, with the prior period bearing one-off merger-related
costs. The remainder of this statement focuses on the continuing activities.
Performance of the continuing activities
£m 2002 2001
Turnover 1,491 1,530
Operating profit* 201 226
Interest (27) (26)
Pre-tax profit* 174 200
Earnings per share* 22.4p 25.4p
Restructuring charges 8 68
Interim dividend 8.75p 8.75p
*before exceptionals and amortisation
For the six months ended 31 January 2002, Smiths Group generated operating
profit of £201 million (down 11%), pre-tax profit of £174 million and earnings
per share of 22.4p, before exceptional charges and amortisation. The Board has
declared an interim dividend maintained at last year's level of 8.75p. On
slightly reduced sales of £1.49 billion, the company achieved a profit margin of
13%.
The company maintained its strong record of cash generation, converting 80% of
operating profit into operating cash after capital expenditure. On completion of
the sale of the marine seals business, net debt will fall to circa £900 million.
Aerospace, largest of the company's divisions, contributed 40% of operating
profit. Continued growth and high margins in Medical raised its proportion of
profit to 23%, one point ahead of Sealing Solutions. Industrial, most affected
by market slowdown, contributed 15% of the total this time.
More than half of the company's sales and profits originate from the United
States. Business in the US held up well, particularly in the defence and medical
sectors. Demand there for consumer and industrial products reduced, and the
slowdown in US domestic air travel began to have some effect on Smiths
Aerospace. Business in the UK and continental Europe was generally flat, with
the depressed state of the German economy having an impact on Sealing Solutions.
Currency variations had little effect on the results, although the decline of
the Yen reduced the reported contribution to Medical from the important Japanese
market.
Three acquisitions at a combined cost of £51 million were added to the Medical
and Interconnect activities. The sale of the John Crane-Lips marine seals
business to Wartsila was announced in December. Completion is expected shortly,
following receipt of the remaining two regulatory approvals, and consequently
its sales and profits have been treated as discontinued. Smiths will then have
generated £259m from disposals since the start of the financial year. The 2001
sales and profits of these non-core activities were £289m and £25m respectively.
The first half disposals gave rise to an exceptional loss of £23 million against
book value.
The company incurred exceptional costs of £8 million on restructuring its civil
aerospace business and on the forthcoming transfer of production from a US
Medical facility to Mexico. Further exceptionals in the range of £35-40 million
are expected in the second half to complete the restructuring of civil
aerospace, including the closure of facilities in the UK and US.
The restructuring continues to affect employment. In the first half, 1,600 jobs
were lost across all divisions, and a further 450 direct labour jobs were
transferred to Mexico and the Czech Republic. In the second half and the early
part of next (financial) year, 1,450 jobs will be eliminated and 450
transferred. In total, 1,200 of the job cuts are in the UK.
In last year's accounts, Smiths Group published its pension funding status
calculated under FRS 17. On this basis, pension assets exceeded liabilities by
£319 million - a funding ratio of 114%. Pension costs charged to operating
profit increased by £5 million in the period, reflecting lower investment
returns.
Aerospace
£m 2002 2001
Turnover 639 596
Operating profit 80 84
Margin 13% 14%
On increased sales, Smiths Aerospace recorded a 5% drop in profits, mainly due
to a changing mix of programmes. Sales of defence equipment, now half of the
total, climbed by 20%, and sales of the still relatively small detection and
protection business increased by 50%. These gains outweighed the start of a
slowdown in the civil aerospace sector.
The company strengthened its position as a first-tier aerospace supplier by
winning defence contracts which will generate significant revenue through the
present decade. Among these, Lockheed Martin selected Smiths as a partner on the
F-35 Joint Strike Fighter (JSF). So far, Smiths has secured agreements to supply
systems valued at $1 million per aircraft on the JSF programme, and funded
development is already underway.
Although it is clear that the civil aerospace sector will go through a downturn
over the next two years, the effect in the half year was less serious than
originally expected. Operational difficulties for airlines in the wake of 9/11
affected aftermarket sales, but the reduction in aircraft production is only now
starting to affect sales of original equipment. Civil aerospace accounts for 35%
of divisional sales, and major restructuring is underway to align capacity with
demand. Airline load factors have recently started to improve and this is the
first positive indicator for the industry since September.
Within Aerospace, there is a rapidly growing business in detection and
protection systems for military and civilian use. These systems provide warning
of chemical and biological threats, and detect traces of explosives and
narcotics on individuals or in baggage. The requirement for enhanced airport
security has generated unprecedented demand, and new products are being added to
the range to address these opportunities.
Boeing announced today the selection of Smiths Aerospace to provide an
integrated refuelling system for the Global Tanker Transport Aircraft (GTTA)
programme, based on the Boeing 767 commercial aircraft. Joining this Boeing team
provides Smiths with the potential to supply systems and in-service support
valued at more than $1 billion over the next 30 years. This contract exploits
the synergy benefits of bringing a range of capabilities from across Smiths
Aerospace into an integrated system. Adding to its expertise in this area, the
company has reached agreement to acquire Able Corporation of Los Angeles for
$17.5 million plus a deferred amount of up to $10 million over 5 years. Able
will supply the refuelling hose unit within the Smiths system for the GTTA
programme.
Medical
£m 2002 2001
Turnover 224 217
Operating profit 46 43
Margin 20% 20%
Smiths Medical achieved a 7% increase in profit on a modest increase in sales,
leaving margins unchanged at 20%. The comparative period last year was
exceptionally strong, due to a one-off surge in spending by the UK's National
Health Service.
Medical has reorganised into product-specific global business units. The
largest, airway management, makes the Portex branded single-use devices which
put the company among the world leaders in this market. Other business units
focus on pain management, ambulatory and hospital infusion, patient temperature
management, critical care monitoring and assisted reproduction.
The division's production is being consolidated into fewer locations, and
labour-intensive assembly is being moved to Mexico, where employment will reach
nearly 1,000 next year. The efficiency gains realised are funding an increased
rate of new product development.
Among recently introduced products are additional applications for the Needle
Pro safety device which helps prevent needlestick injuries. Sales of these
devices, which are a legal requirement in US hospitals, grew by 50% in this
period.
Medical now has a targeted approach to generating new business with the major
hospital buying groups in the US, and this has resulted in more firmly
established positions with groups including Novation, Premier and Broadlane.
Two recent acquisitions complement existing activities. In November, the company
paid £25 million for Bivona Inc, based in Indiana. Bivona specialises in airway
management products made of silicon, which are used when the tubes are going to
be left in place for longer than usual. In January, the company announced it
would pay £18 million (partly deferred) to acquire a product line of anaesthesia
procedure kits from Abbott Laboratories. Procedure kits are increasingly
preferred by consultants because they save the hospital from having to provide a
set of individual devices for each operation.
Smiths Medical's business in Japan is a significant contributor to the
performance of the division. Japan Medico is bringing to market a progressively
wider range of Smiths products. However, the weaker Yen impacted consolidated
sales by £4m in the period.
Sealing Solutions
£m 2002 2001
Turnover 410 462
Operating profit 45 51
Margin 11% 11%
Following the disposal of several non-core activities, including marine seals,
the Sealing Solutions division now comprises John Crane and the polymer seals
business. Sales and profits declined by 11% on a like-for-like basis, leaving
margins unchanged at 11%.
John Crane, generating just over half of continuing divisional sales, is the
world leader in metal and ceramic rotating seals used in process plant,
including the oil & gas, pulp & paper and chemical industries. These are high
added-value, engineered seals which generate significant aftermarket revenues.
While John Crane's sales were flat in this period, the benefits of restructuring
are now coming through in terms of improved margins. Labour-intensive production
has been transferred to lower cost countries, and the product range has been
rationalised to focus on the most profitable applications. John Crane is now in
good shape to take advantage of an improving outlook in its major markets.
The decline in divisional sales and profits was largely attributable to poor
market conditions facing the polymer seals business. It supplies high-grade
rubber and plastic seals for the industrial, automotive and aerospace sectors.
Over half of its sales are into the European industrial equipment market, and
these were seriously impacted by the decline in capital goods production,
particularly in Germany, during this period. A quarter of sales are for
automotive applications, and these too have been at lower levels. As with John
Crane, restructuring is underway.
Industrial
£m 2002 2001
Turnover 218 255
Operating profit 30 49
Margin 14% 19%
Sales by the Industrial division were 15% down and profits declined by 39%,
against the prior period, which benefited from the telecoms peak. Restructuring
has taken place across the division reflecting the present lower levels of
activity, and the costs of this have been charged against profits. Overall
personnel numbers are 10% lower than a year ago.
The Interconnect businesses serving the wireless telecoms sector were seriously
affected by the downturn in this market. Smiths products are mainly used for
protection and connection of electronics in the base stations and transmission
towers of mobile networks. Expansion of these networks has slowed while the
service providers seek to regain profitability, and customer destocking
continued through this period. Twelve months ago, activity was at an
unprecedented high. Even at today's levels, the Smiths telecom-related
businesses are generating mid-teens margins and a return on investment well
above the cost of capital.
Interconnect business in other sectors was less severely affected. Sales of
connectors for defence use, including Eurofighter and a number of US programmes,
continued to grow. This was offset by a decline in general industrial
applications. Sales by the air movement businesses including Vent-Axia were
flat. The flexible ducting and hosing businesses performed well, although their
products for household goods were affected by reduced consumer spending in the
US.
In December the company paid £8 million to acquire Summitek, a US company
specialising in test and measurement equipment used in the wireless
communications industry.
Prospects
Smiths Group is now more confident about the outlook for the second half of the
year. The first half shortfall of 11% in operating profit was less than
indicated in November, and the second half decline is expected to be similar or
less. Recent disposals have helped increase the focus on the core activities,
with the defence and healthcare sectors now providing the greatest opportunities
for growth. The company remains on track to achieve the merger-related savings
outlined a year ago, and further restructuring is in hand to address the civil
aerospace downturn. With a robust balance sheet and strong cash generation,
Smiths is in good shape to take advantage of any improvement in its markets.
Dividend
The Board has declared an interim dividend of 8.75p, unchanged from a year ago,
and will consider whether or not to increase the final dividend in the light of
circumstances prevailing in six months' time. The interim dividend will be paid
on 19 April 2002 to holders of all ordinary shares whose names are registered at
the close of business on 22 March. The ex-dividend date will be 20 March. Copies
of the interim report will be sent to shareholders shortly, and will be
available at the company's registered office, 765 Finchley Road, London NW11
8DS.
Tables attached
- Profit & loss account
- Summarised balance sheet
- Cash-flow statement
- Notes to the accounts
The financial statements attached have been prepared in accordance with the
accounting policies set out in the company's accounts for the year ended 31 July
2001. The company has adopted FRS 19 (Deferred Taxation) in these interim
accounts. Figures relating to last year are abridged. Full accounts for Smiths
Group plc to 31 July 2001, on which the auditors made an unqualified report,
have been delivered to the Registrar of Companies.
Profit and loss account
6 months ended 31 January 2002
Ordinary Discontinued Goodwill Exceptional Total
Activities Businesses Amortisation Items
Note £m £m £m £m £m
Continuing operations 1,486.8 1,486.8
Acquisitions 4.3 4.3
Discontinued businesses 96.6 96.6
Turnover 1 1,491.1 96.6 1,587.7
Continuing operations 199.7 (18.4) (7.6) 173.7
Acquisitions 1.1 (0.4) 0.7
Discontinued businesses 6.3 6.3
Operating profit 200.8 6.3 (18.8) (7.6) 180.7
Exceptional items - 2
profit / (loss) on disposal (23.4) (23.4)
of businesses
Profit before interest and tax 200.8 6.3 (18.8) (31.0) 157.3
Net interest payable (27.3) (6.9) (34.2)
Profit before taxation 173.5 (0.6) (18.8) (31.0) 123.1
Taxation (48.6) 0.2 1.8 2.1 (44.5)
Profit / (loss) after taxation 124.9 (0.4) (17.0) (28.9) 78.6
Minority interests (0.7) (0.7)
Profit / (loss) for the period 124.2 (0.4) (17.0) (28.9) 77.9
Dividends 3 (48.6) (48.6)
Retained profit / (loss) 75.6 (0.4) (17.0) (28.9) 29.3
Earnings per share 4
Basic 22.4p (0.1p) (3.1p) (5.2p) 14.0p
Fully-diluted 22.3p (0.1p) (3.1p) (5.2p) 13.9p
Profit and loss account
6 months ended 31 January 2001
Ordinary Discontinued Goodwill Exceptional Total
Activities Businesses Amortisation Items
Note £m £m £m £m £m
Continuing operations 1,530.1 1,530.1
Acquisitions
Discontinued businesses 948.6 948.6
Turnover 1 1,530.1 948.6 2,478.7
Continuing operations 225.9 (23.9) (67.6) 134.4
Acquisitions
Discontinued businesses 90.4 (17.7) 72.7
Operating profit 225.9 90.4 (23.9) (85.3) 207.1
Exceptional items - 2
merger costs (53.8) (53.8)
Profit before interest and tax 225.9 90.4 (23.9) (139.1) 153.3
Net interest payable (26.3) (29.8) (56.1)
Profit before taxation 199.6 60.6 (23.9) (139.1) 97.2
Taxation (59.9) (18.2) 2.6 21.0 (54.5)
Profit / (loss) after taxation 139.7 42.4 (21.3) (118.1) 42.7
Minority interests (0.6) (0.6)
Profit / (loss) for the period 139.1 42.4 (21.3) (118.1) 42.1
Dividends 3 (109.1) (109.1)
Retained profit / (loss) 30.0 42.4 (21.3) (118.1) (67.0)
Earnings per share 4
Basic 25.4p 7.7p (3.9p) (21.5p) 7.7p
Fully-diluted 25.3p 7.7p (3.9p) (21.5p) 7.6p
Profit and loss account
Year ended 31 July 2001
Ordinary Discontinued Goodwill Exceptional Total
Activities Businesses Amortisation Items
Note £m £m £m £m £m
Continuing operations 3,177.1 3,177.1
Acquisitions
Discontinued businesses 1,781.1 1,781.1
Turnover 1 3,177.1 1,781.1 4,958.2
Continuing operations 499.8 (34.6) (115.8) 349.4
Acquisitions
Discontinued businesses 151.5 (14.1) (17.7) 119.7
Operating profit 499.8 151.5 (48.7) (133.5) 469.1
Exceptional items - 2
merger costs (54.2) (54.2)
profit / (loss) on (286.0) (286.0)
disposal of businesses
write-down of goodwill on (125.0) (125.0)
future anticipated disposals
Profit before interest and tax 499.8 151.5 (48.7) (598.7) 3.9
Net interest payable (59.1) (57.1) (116.2)
Profit before taxation 440.7 94.4 (48.7) (598.7) (112.3)
Taxation (127.9) (28.3) 3.6 60.5 (92.1)
Profit / (loss) after taxation 312.8 66.1 (45.1) (538.2) (204.4)
Minority interests (1.1) (0.5) (1.6)
Profit / (loss) for the period 311.7 65.6 (45.1) (538.2) (206.0)
Dividends (199.5) (199.5)
Retained profit / (loss) 112.2 65.6 (45.1) (538.2) (405.5)
Earnings per share 4
Basic 56.4p 11.9p (8.2p) (97.4p) (37.3p)
Fully-diluted 56.2p 11.8p (8.1p) (97.0p) (37.1p)
Summarised balance sheet 31 January 2002 31 January 2001 31 July 2001
Note
£m £m £m
Fixed assets
Intangible assets 708.4 923.0 678.3
Tangible assets 607.8 1,017.5 620.1
Investments and advances:
Automotive 325.0 18.9 325.0
Other 13.2 9.2 12.1
1,654.4 1,968.6 1,635.5
Current assets
Stocks 576.9 663.4 567.6
Debtors 837.4 1,255.6 918.6
Cash at bank 201.8 120.6 117.2
1,616.1 2,039.6 1,603.4
Creditors: amounts falling due within one year (1,058.4) (1,435.1) (1,181.4)
Net current assets 557.7 604.5 422.0
Total assets less current liabilities 2,212.1 2,573.1 2,057.5
Creditors: amounts falling due after one year (1,089.6) (1,586.2) (970.2)
Provisions for liabilities & charges (228.9) (256.1) (234.9)
Net assets 893.6 730.8 852.4
Capital and reserves
Share capital and share premium account 287.6 277.3 285.0
Reserves 592.5 439.5 554.7
Shareholders' equity 7 880.1 716.8 839.7
Minority equity interests 13.5 14.0 12.7
Capital employed 893.6 730.8 852.4
Comparative figures for provisions for liabilities and charges and reserves have
been restated on the adoption of FRS 19 to include an additional deferred
taxation provision of £26m relating to past tax benefits derived from goodwill
acquired before 1 August 1998 and written off against reserves under accounting
policies in force at that time.
Cash-flow statement
6 months 6 months Year
ended ended ended
31 January 31 January 31 July
2002 2001 2001
Note £m £m £m
Operating profit (before restructuring and merger costs) 188.3 292.4 602.6
Goodwill amortisation 18.8 23.9 48.7
Depreciation 46.6 69.8 139.3
(Increase) / decrease in stocks (31.0) (28.3) (34.4)
(Increase) / decrease in debtors 52.4 (22.8) (71.7)
Increase / (decrease) in creditors (59.1) (5.3) 19.5
Other non-cash items (2.8) (3.0)
Operating cash-flow before restructuring costs 216.0 326.9 701.0
Restructuring costs (26.0) (30.9) (74.2)
Operating cash-flow after restructuring costs 190.0 296.0 626.8
Merger costs (49.6) (54.2)
Returns on investments and servicing of finance (28.6) (50.8) (117.9)
Tax paid (19.6) (60.7) (115.6)
Capital expenditure and financial investment (50.4) (105.7) (188.0)
Acquisitions and disposals 5 (3.7) (95.4) 400.9
Deferred consideration re prior-year acquisitions (26.3) (32.3)
Equity dividends paid (90.4) (122.8) (171.3)
Management of liquid resources (38.4) 195.2 193.6
Financing 93.5 (123.1) (448.2)
Increase / (decrease) in cash 52.4 (143.2) 93.8
Increase/ (decrease) in short-term deposits 38.4 (195.2) (193.6)
(Increase) / decrease in other borrowings (92.2) 127.9 452.8
Loan note issues (net of repayments) 0.7 2.2 3.5
Term debt of acquisitions assumed (0.5)
Term deposits acquired with acquisitions 19.0
Debt de-consolidated on disposals 19.1
Exchange variations (6.9) (22.8) (48.7)
(Increase) / decrease in net debt (7.6) (231.6) 345.9
Net debt at beginning of period (1,119.8) (1,465.7) (1,465.7)
Net debt at end of period 6 (1,127.4) (1,697.3) (1,119.8)
Notes to the accounts
6 months ended 6 months ended Year ended
31 January 2002 31 January 2001 31 July 2001
Turnover Profit Turnover Profit Turnover Profit
1. Analyses of turnover and profit
£m £m £m £m £m £m
Market
Aerospace 638.7 79.8 596.4 83.5 1,303.6 208.5
Medical 224.1 46.0 217.2 42.8 452.5 93.3
Sealing Solutions 409.9 45.0 461.5 50.6 913.2 105.4
Industrial 218.4 30.0 255.0 49.0 507.8 92.6
1,491.1 200.8 1,530.1 225.9 3,177.1 499.8
Discontinued businesses 96.6 6.3 948.6 90.4 1,781.1 151.5
1,587.7 207.1 2,478.7 316.3 4,958.2 651.3
Goodwill amortisation (18.8) (23.9) (48.7)
Exceptional items (31.0) (139.1) (598.7)
Profit before interest and tax 157.3 153.3 3.9
Net interest (34.2) (56.1) (116.2)
Profit before taxation 123.1 97.2 (112.3)
Geographical origin
- continuing activities
United Kingdom 486.1 51.9 494.5 65.5 1,042.1 119.9
USA 767.0 102.3 752.3 113.6 1,622.7 271.2
US dollars $1,112.2m $148.3m $1,098.4m $165.9m $2,352.9m $393.2m
Europe 238.3 27.8 230.0 31.6 508.2 71.6
Other overseas 124.5 18.8 111.9 15.2 238.9 37.1
Inter-company (124.8) (58.6) (234.8)
1,491.1 200.8 1,530.1 225.9 3,177.1 499.8
John Crane Lips has been treated as discontinued. The agreement to sell the
business is conditional upon final regulatory approvals, all but two of which
have already been obtained, and the remainder are expected shortly.
2. Exceptional items 2002 2001 2001
£m £m £m
Restructuring and closure costs (7.6) (85.3) (133.5)
Merger costs (53.8) (54.2)
(7.6) (139.1) (187.7)
Loss on disposal of businesses (23.4) (286.0)
Goodwill on anticipated disposals (125.0)
(31.0) (139.1) (598.7)
The book value of assets sold amounted to £62.6m and net sale proceeds £39.2m
(2001 £1,205.9m including goodwill £626.6m; net sale proceeds £919.9m).
3. Dividends
An interim dividend of 8.75p per share ( 2001: 8.75p) has been declared and will be paid on 19 April
2002 to holders of all ordinary shares whose names are registered at close of business on 22 March 2002.
4. Earnings per share
Separate figures are given for earnings per share related to the average number of shares in issue
for each period -
6 months ended 31 Year ended 31 July
January
2002 2001 2001
Basic 555,903,263 548,963,057 552,770,686
Effect of dilutive share options 1,021,646 1,343,271 2,113,803
Fully - diluted 556,924,909 550,306,328 554,884,489
5. Acquisitions and disposals
During the period the Company acquired the issued share capital of Bivona Inc.,
and the business assets of a product line from Abbott Laboratories for Medical,
and the issued share capital of Summitek Instruments, Inc. for Industrial.
Details of the consideration paid, amounts treated as goodwill and the net
assets acquired are set out below. These values are provisional, and following
completion of the ongoing review, will be finalised in subsequent financial
statements.
Date of Consideration Goodwill Net Assets
Acquisition
£m £m £m
Bivona 31.10.01 25.6 20.4 5.2
Abbott anaesthesia kit business 20.12.01 18.0 17.0 1.0
Summitek 2.12.01 7.6 6.1 1.5
51.2 43.5 7.7
Consideration deferred 8.3
Cash outflow in period 42.9
Net proceeds of disposals (note 2) (39.2)
Net cash outflow 3.7
In addition to the £18m paid for the Abbott business and assets, the company has
undertaken to acquire stocks of raw materials and finished goods at an estimated
cost of £3m.
In accordance with the provisions of FRS 10, the company amortises goodwill
arising on acquisitions
after 1 August 1998 on a straight-line basis over a period of up to 20 years.
The charge for the period to
31 January 2002 was £18.8m.
6. Borrowings and net debt
31 January y 31 January 2001 31 July 2001
20022
Fixed Floating
£m £m £m £m £m
Maturity:
On demand/under one year 49.7 264.4 314.1 362.4 342.6
One to two years 19.8 0.1 19.9 204.2 90.6
Two to five years 143.0 554.9 697.9 946.7 506.8
Greater than five years:
Bank loans 1.3 1.3 8.8 1.1
TI Eurosterling bond 2010 148.4 148.4 148.3 148.3
Smiths Eurosterling bonds 2016 147.6 147.6 147.5 147.6
361.4 967.8 1,329.2 1,817.9 1,237.0
Cash and deposits (201.8) (120.6) (117.2)
Net debt 1,127.4 1,697.3 1,119.8
2002 2001
7. Movements in shareholders' equity Note £m £m £m £m
Profit for the period 77.9 42.1
Dividends (48.6) (109.1)
29.3 (67.0)
Exchange variations 9.1 (2.9)
Share issues 2.0 25.3
Net increase/ (reduction) in shareholders' equity 40.4 (44.6)
Shareholders' equity :
at 1 August 2001 865.7 787.4
Prior period adjustment - FRS 19 8 (26.0) 839.7 (26.0) 761.4
at 31 January 2002 880.1 716.8
8. Accounting policies
The company has adopted FRS 19 - Deferred Taxation. As a result, an adjustment
of £26m has been made to opening reserves to reflect the deferral of tax
relating to goodwill acquired before 1 August 1998, and written off to reserves
under accounting policies in force at that time. The effect on the reported
profits of the prior period is not material.
-ends-
page 17 of 17
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