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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Anker | LSE:ANK | London | Ordinary Share | GB00B04DD164 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:6807J
Anker PLC
14 March 2005
For immediate release Monday, 14 March 2005
Anker Plc
Preliminary results for the year ended 31 December 2004
Anker plc, the pan-European provider of EPOS software, systems and services for
retailers, that successfully listed on AIM in December 2004, today announces its
preliminary results for the year ended 31 December 2004.
Highlights:
*Results in line with expectations following successful IPO
*Pro-forma* operating profit increased by 12.2% to Euro 12.9 million
(2003: Euro 11.5 million)
*Pro-forma* profit before tax increased by 22.9% to Euro 10.2 million
(2003: Euro 8.3 million)
*Management focus on margins and costs mitigates the impact of lower sales
*Order book at significantly higher levels than at the same time last year
*Encouraging sales and order pipeline for flagship software product OSCAR,
driven by high referenceability across Europe
*Strong cash flow should enable Anker to pursue a progressive dividend
policy in the future
*Strong team of non-executives appointed as part of AIM Admission process
*Proforma operating profit and profit before tax are in respect of continuing
business only and are before exceptional items and amortisation of goodwill.
Details of the basis for calculating the proforma information are shown in the
Financial Review
John Foulkes, Chief Executive, commenting on the results, said:
"The extensive restructuring undertaken by Anker during 2003 has delivered a
strong performance during 2004.
"Entering 2005, our order book is almost twice the level of a year ago. In
addition, our qualified prospect pipeline is significantly higher than in 2003.
Anker's revenues are highly visible, and we estimate that over half of turnover
for 2005 is already committed from the order book and maintenance contracts."
For further information, please contact: www.anker-systems.com
Anker plc 0870 905 1300
John Foulkes, Chief Executive Officer
Stephen Jones, Chief Financial Officer
Smithfield 020 7360 4900
Reg Hoare/Sarah Richardson
About Anker www.anker-systems.com
Anker Plc is listed on the London Stock Exchange's AIM (ANK.L) and is a provider
of integrated, end-to-end, electronic point of sale (EPoS) software, systems and
services for retailers across Europe.
The Group is headquartered near Manchester in the UK, and can trace its
retailing roots back more than 100 years to Bielefeld, Germany. Today, Anker is
one of Western Europe's largest providers of EPoS software, hardware, support
and services for retail and hospitality markets with over 2,000 customers and
over 100,000 installed units under maintenance. Anker's flagship software
product, OSCAR, launched in 1997, is a multi-outlet EPoS system with over 60,000
licences across Europe.
The Group operates directly in 11 European countries - the UK,
France, Netherlands, Belgium, Germany, Austria, Switzerland, Norway, Sweden,
Denmark and Finland.
The Anker workforce of approximately 1,250 employees provides its customers with
a full range of services from software development, professional services,
helpdesk and field service. With 84% of this workforce involved in
customer-facing activities, Anker is dedicated to its retail and hospitality
customers, which include Tesco (through T&S stores), Harrods, Legoland, Game,
Tommy Hilfiger, O2, Intermarche, Decathlon, Carrefour, Sea Containers, Burger
King, Schlecker, Aldi, Markthauf, Bauhaus, Compass Group, SAS Radisson, Hilton
Hotels, Interflora, Silja Line, ColorLine, Hoverspeed, DFDS and Signet.
Anker shares were admitted to AIM on 23 December 2004 at a price of 150p per
share.
CHAIRMAN'S STATEMENT
I am delighted to be able to introduce myself as Anker Plc's non-executive
Chairman. I hope to bring to Anker my extensive experience of growing successful
pan-European and international businesses, alongside that of my board of
directors.
Anker's role as a provider of EPoS software and systems is extremely strong -
and in a very fragmented market there is a clear opportunity for significant
growth both organically and by acquisition.
Managing that growth profitably will depend upon the delivery of excellent,
consistent IT solutions to retailers across Europe, supported by Anker's
commitment to software and services.
Results
The results for 2004 are complicated by the incorporation of Anker Plc on 3
December 2004, its admission to the Alternative Investment Market (AIM) on 23
December 2004 and its acquisition of Anker BV, the previous holding company, on
the same day. The audited 2004 results reflect the trading results of the Anker
BV group from 23 December 2004 only. We have therefore provided proforma
accounts for the Anker BV group for the full twelve month period and my comments
are based upon these proforma accounts.
Over the past year Anker's performance has been strong. While turnover for year
ended December 2004 is down by 7.9% over the previous year, to Euro 157.4
million, gross profit margins (pre-exceptional costs) increased from 63.0% to
65.2%.
In 2004 the Group has also reaped the benefits of the restructuring in 2003 to
reduce adjusted operating expenses before goodwill amortisation and exceptional
items to Euro 90.3 million, a reduction of Euro 6.2 million (6.4%) over the
previous year.
As a result of exceptional items, Anker is showing an operating loss this year
of Euro 5.7 million. However, this compares extremely favourably with the loss
recorded during 2003 - which was also due to large exceptional items. The
current year also includes a loss of Euro 1.5 million in relation to the
discontinued Export business. Operating profit on continuing businesses before
goodwill amortisation and exceptional items is up by Euro 1.4 million to Euro
12.9 million, an increase of 12.2% over the year ended December 2003.
Following two years of substantial exceptional items, which are covered in more
detail in the CFO's Review, Anker is now in a strong position with good
operating profits, a strong order book and an appropriate cost base going
forward.
As part of the rationalisation programme undertaken during the last few years,
attention has been focused on driving down working capital. This has been very
successful with Euro 18.0 million removed from working capital in 2002, Euro 9.3
million in 2003 and Euro 2.4 million in 2004. Going forward Anker plans to
maintain its vigilance on working capital ratios. This strong cash flow position
should enable Anker to pursue a progressive dividend policy in the future.
Investment for the future
The most significant development in 2004 was the successful IPO launch on the
Alternative Investment Market of the London Stock Exchange. The placing raised
Euro 90.3 million to fund the acquisition of Anker BV from an affiliate of
venture capitalist, Gores Technology Group. Gores continue to hold 48.2% of the
Company's shares in respect of which it has signed a one year lock up and
orderly market agreement.
Following on from a year working closely with Gores, a year that has worked well
and resulted in significant gains in efficiency and a reduction in cost base
through restructuring, 2004 was the right time for Anker to move forward as an
independent company.
The Board is delighted that the flotation of the Company on AIM has been
completed successfully. It was certainly gratifying to witness such high levels
of institutional demand. This listing makes both strategic and commercial sense
as we take Anker to the next stage of its development and we now look forward to
working with our new institutional investors.
The IPO gives the Board a further currency with which to seek acquisitions and
being a public company gives Anker a much enhanced profile with both current and
prospective customers.
2004 was a year of investment for Anker, as the Group put in place a number of
initiatives to reinforce its pan-European position, most notably a clear shift
towards high margin software and services revenue.
The year ahead
One of the strengths of Anker's business is the clear visibility of future
revenues. Recurring software and hardware maintenance contracts account for
about 40% of sales. Anker also has additional certainty from its order book of
contracts won but yet to be rolled out.
The current order book is significantly higher than twelve months ago, of which
the majority will be booked during 2005. Having said that, 2005 will be a
challenging year for the Group with so much economic turmoil within many of our
European markets. Specifically, the high level of unemployment in Germany is of
concern, as is the strength of the Euro.
As well as increasing sales organically, Anker will be exploring other growth
avenues. Despite being market leader, Anker has only 6% of the European EPoS
software market. There is clear potential for consolidation in this fragmented
market and, given Anker's pan-European presence, infrastructure and strong
customer base, acquisitions are a significant possibility.
The new Board
I should also like to take this opportunity to introduce the new Board of Anker
Plc. Their combined expertise, most notably international experience, will play
a key role in driving Anker's developing expansion strategy. The Board comprises
two executive directors, John Foulkes, Chief Executive Officer and Stephen
Jones, Chief Financial Officer, who are both long standing members of the Anker
Group, and four new non-executive directors. In addition to myself, we welcomed
to the board in December, Massimo Carello, Christopher Knight and Clare
Spottiswoode.
On behalf of the Board, I would like to thank all of Anker's management and
staff for their diligence and hard work in 2004 and thank our investors for
their support as we move into a new and exciting year as a publicly quoted
company.
Dermot Smurfit
Chairman
CHIEF EXECUTIVE'S STATEMENT
The extensive restructuring undertaken by Anker during 2003 has delivered a
strong profit performance during 2004. One highlight of the year was the good
performance of Anker Technologies in its first year as a separate profit centre.
Overall, progress was consistently good through proficient cost management and
margin improvement. This is reflected in Anker's strong operating cash flows
which have remained positive even after meeting the restructuring and other
exceptional costs of the last two years.
During 2004, Anker closed down its unprofitable hardware Export business,
further reinforcing the Group's shift towards software and services. Overheads
in continuing businesses were also reduced during 2004 by Euro 5.9 million to
Euro 89.4 million - a reduction of 6.2% over the previous year. This contributed
to an increase in adjusted operating profit from continuing businesses of 12.2%,
to Euro 12.9 million for the year ended December 2004, from Euro 11.5 million in
the previous year.
Having created a lean and effective organization through the restructuring in
2003, the past year has seen significant investment in Anker products and
infrastructure.
Software for the future
Anker is now focused on top line growth, with specific emphasis on software led
sales. Anker F&B is an out-of-the-box hospitality product for distribution
through third party channels. This has been a major investment during 2004. In
addition to R&D costs, Anker has invested over Euro 0.4 million in the creation
of fully comprehensive, multi-lingual user documentation, as well as sales
training and marketing collateral.
Developed from our flagship product OSCAR, Anker F&B will play a key role in
reaching new restaurant, hotel, self service, pub and club customers,
reinforcing Anker's strong position in the hospitality markets across Europe.
The next steps in development will see this approach applied to other sectors -
including speciality and fast moving consumer goods products. This programme
clearly demonstrates Anker's commitment to growth in its software business.
Products and Services
2004 saw an accelerating emphasis on the growth of Professional Services
revenues across all territories. In Germany, Anker has undertaken a significant
restructuring, appointing industry veteran Andreas Berger to Head of
Professional Services to expand this key area of the portfolio.
This year has also seen the continuation of Anker's pan-European deployment of a
centralized maintenance and support system, which enables us to deliver
consistent services to all customers internationally. This is a key investment
in the creation of a single infrastructure across Europe.
Engineers use mobile technology to improve our customer responsiveness and
quality of service, while customers have web-based access to Anker service
performance. This deployment will be completed in 2005, when the Scandinavian
territories will come on-stream.
Of course, OSCAR remains the primary focus of R&D investment, with development
undertaken in Germany, Scandinavia and UK to meet both local and international
retail requirements. Annually, Anker invests approximately Euro 6 million or 30%
of software sales in software development, a trend set to continue in the
future.
In May 2004, Anker held the first international OSCAR User Group in Amsterdam,
where representatives of over 40 customers from 11 different countries got
together to discuss the implications on the retail sector of new technologies,
from radio frequency identification (RFID) to mobility.
2004 also saw the development of a single product catalogue, encompassing
software, hardware, and services to support Anker's increasingly international
customer base. Following rigorous evaluation and supplier negotiation, Anker can
now provide customers with cross border product ranges at excellent prices,
further enhancing the Company's reputation as a truly pan-European operation.
These developments have reinforced Anker's strong European presence and
demonstrate to customers our ability to support their requirements with
consistent products and services irrespective of location. Unlike many other
retail IT providers, Anker is a truly international organisation, not simply a
number of separate businesses brought together by 'a single balance sheet'.
Partnerships
This international focus has been recognised by two of the leading global IT
organisations - HP and Microsoft. During 2004, Microsoft and Anker created a
memorandum of understanding under which we will operate during 2005. This
encompasses Anker's software development within Microsoft's "Smarter retailing
initiative" which will see both parties working together to gain new business.
Anker's relationship with HP Europe has already reaped significant rewards,
including a pan-European EPoS replacement agreement with Carphone Warehouse.
These relationships demonstrate Anker's strength in the retail sector and are
expected to play a significant role in winning new business going forward.
New business wins in 2004
Other key business wins in 2004 include the Finnish Post Office which has chosen
OSCAR for its 1,350 branches. Dutch buying group SuperUnie's Poiesz & Jan
Linders have invested over Euro 3.5 million in OSCAR software, hardware and
support services contracts, with other members of the buying group set to follow
in the future. Here in the UK, TJ Hughes has invested over Euro 8 million in an
OSCAR rollout and support contracts for all its stores; airport retailer Alpha
Retail has invested in OSCAR to operate its stores in airports throughout Europe
and Poundstretcher has made a Euro 3.5 million EpoS deployment of software,
hardware and support contracts to re-equip its high street store operations.
In Scandinavia, Anker has consolidated its dominant position in the Nordic ferry
sector with the development of a Property Management System in OSCAR with Color
Line of Norway. This solution was successfully implemented on the M/S Color
Fantasy, the largest ferry vessel in Scandinavia, launched in December 2004.
This Property Management System is expected to drive significant revenue from
the ferry sector over the next few years.
The International Hilton Hotels Group has installed OSCAR in its Vienna and
Paris (Arc de Triomphe) hotels. Finally, in Germany we are upgrading Schlecker,
Marktkauf and Bauhaus to the latest technologies.
People
Without doubt Anker's success is a direct result of the creation of a strong,
stable workforce. Retail is in the blood of Anker's staff; they can work faster
with real knowledge and understanding of the pressures experienced by retailers
from hospitality to supermarkets.
This truly international workforce, with less than 30% of staff located in the
UK, combine to provide a broad picture of the issues affecting retailers across
different European markets.
With over 80% of staff in customer-facing roles and our knowledge of individual
customer and country requirements, Anker is well positioned to capitalize on
opportunities for business development.
Sales development
During 2004 Anker put into place a highly focused team of professionals to
generate new business across Europe to support the top line growth focus. These
new teams, headed-up by four new business sales directors, each with a
pan-European remit, are responsible for new name business development and report
to a 'seasoned professional' in International Sales and Marketing Director,
Steve Butcher.
Existing customers, representing 90% of the revenue stream, are now being
supported by dedicated key account directors. The creation of these teams will
ensure the sales focus remains consistent across Europe, with a clearly defined
"hunters and farmers" approach to business.
Anker believes that separating new business from existing customers will support
a focused sales drive in what is undoubtedly a challenging market for retailers
across Europe. Low margins and retailer consolidation, combined with the growth
in online sales, are creating strong pressure for cost reduction and efficiency
improvements. Sales during 2005 will be also be driven by the replacement of the
EPoS technology implemented to manage Y2K and Euro conversions which is now
approaching end-of-life, as well as the need to ensure compliance with new
European Chip & PIN standards.
Growing interest in mobile technology, particularly on the shop floor, to
improve information and customer service is a major market opportunity, as is
the interest in self-check-out systems. The issue of RFID continues to provoke
debate, although the technology is unlikely to extend beyond the supply chain
for several years.
The focus on new business generation is already paying significant dividends
with our order book at end-2004 almost twice the level of a year ago. In
addition, our qualified prospect pipeline is significantly higher than in 2003
and we look forward to converting this to revenues for 2005 and beyond.
Anker's revenues are highly visible, with 90% of sales coming from existing
customers. In total, we estimate that over half of turnover for 2005 is already
committed from the order book and maintenance contracts.
Finally, I am delighted that Anker has been able to attract the support of
Dermot Smurfit as its Chairman. We welcome the contribution his international
experience and business acumen will bring to the Company. Through his offices,
Anker has managed to attract a highly talented and experienced Board of
Directors. Their expertise in international business will play a key part in
consolidating Anker's role as the pan-European supplier of EPoS software,
systems and services.
John Foulkes
Chief Executive Officer
FINANCIAL REVIEW
Introduction
The Company was incorporated on 3 December 2004 as Project Chain Plc. On 16
December 2004 it changed its name to Anker Plc. On 23 December 2004 the
Company's shares were admitted to trading on AIM and on the same date it
acquired the Anker BV group of companies from Anker Holdings LLC, an affiliate
of Gores Technology Group.
Operating Results
The reported results represent the trading of the Group for the 29 days since
the Company's incorporation. Principally these relate to the activities of the
Anker BV group in the 9 days from 23 December to 31 December 2004. These results
show turnover of Euro 4.1 million and operating profit before amortisation of
goodwill and exceptional items of Euro 0.3 million. These results relate
entirely to continuing businesses.
In order to provide more meaningful information on the trading results of the
Group, we have prepared proforma accounts as shown below. These proforma
accounts show the results of the Group as if it had been trading in its current
form for the full year to 31 December 2004, together with comparative
information for the previous year.
The proforma accounts have been produced on the basis that they reflect the
actual results of the continuing and discontinued businesses of the Anker BV
group for the years ended 31 December 2004 and 31 December 2003. Adjustments
have been made to bring the Anker BV results into line with UK General Accepted
Accounting Principles (GAAP), primarily in respect of accounting for pensions,
but otherwise the accounting policies of the Group are the same as those of the
Anker BV group.
The goodwill amortisation and interest charges shown in the proforma accounts
are the actual amortisation and interest charges of the Anker BV group and have
not been adjusted to reflect the acquisition of Anker BV by the Company on 23
December 2004. The goodwill amortisation charge for the Group in 2005 will be
higher than that shown in the proforma accounts.
No adjustment has been made in the proforma accounts for the expected additional
costs arising from the Company's admission to AIM or the ongoing costs of
maintaining an AIM listed company.
Proforma Profit and Loss account
Proforma 12 months ended 31 Proforma 12 months ended 31
December 2004 December 2003
Euro millions Euro millions
Continuing Discontinued Total Continuing Discontinued Total
businesses businesses businesses business
Turnover 154.8 2.6 157.4 167.6 3.3 170.9
Cost of sales (52.5) (2.3) (54.8) (60.8) (2.4) (63.2)
Gross profit 102.3 0.3 102.6 106.8 0.9 107.7
Gross margin 66.1% 65.2% 63.7% 63.0%
Overheads (89.4) (0.9) (90.3) (95.3) (1.2) (96.5)
Operating profit* 12.9 (0.6) 12.3 11.5 (0.3) 11.2
Operating margin 8.3% 6.9%
Interest (2.7) (3.2)
Profit before tax* 9.6 8.0
Goodwill amortisation (2.3) (2.8)
Exceptional items (15.7) (23.5)
Loss before tax (8.4) (18.3)
Tax 1.0 1.3
Retained loss (7.4) (17.0)
*Pre exceptional items and goodwill amortisation
The Group's export division based in Germany was discontinued in February 2004.
This division was an importer of low margin cash registers resold through
distributors. All discussion of proforma financial information below excludes
the results of this discontinued business.
Since the beginning of 2004 the focus of management's attention has been to grow
the margins and profitability of the business through centralisation of hardware
purchasing, increasing sales of software and professional services and tightly
managing costs.
The 2004 sales reduction was broadly the same across all business lines at
around 8%. However lower sales were mitigated by improved margins across all
business lines and significantly lower overheads following the restructuring in
2003 and early 2004.
Gross margins on continuing businesses improved by 2.4% from 63.7% to 66.1% and
reflect a good performance from Anker Technologies, which is now clearly focused
on profitability, as well as improved purchasing and selling disciplines across
the Group.
Overheads reduced by Euro 5.9 million to Euro 89.4 million, a reduction of 6.2%.
This was largely the result of lower average staffing levels, down by
approximately 8% in the year.
Adjusted operating profit before tax, goodwill amortisation and exceptional
items of Euro 12.9 million was 12.2% ahead of the Euro 11.5 million achieved in
2003.
The lower interest charges reflect the full year impact of the debt
restructuring that took place following the acquisition of the Anker BV group by
Anker Holdings LLC in early 2003.
Exceptional items
Exceptional items consist of;
Proforma 12 Proforma
months ended 12 months ended
31 Dec 2004 31 Dec 2003
Euro millions Euro millions
Restructuring costs - continuing businesses 0.6 13.3
Restructuring costs - discontinued businesses 0.9 2.2
Total restructuring costs 1.5 15.5
Non-recurring management charges 4.3 3.4
Goodwill impairment 3.3 3.0
Costs related to admission to AIM 0.4 -
Corporate costs - 1.6
Deferred compensation plan 6.2 -
Total exceptional items 15.7 23.5
The restructuring costs primarily relate to the cost of reducing staffing levels
and vacating properties that are surplus to requirements. The restructuring is
now complete.
The non-recurring management charges were paid to Gores Technology Group, an
affiliate of Anker Holdings LLC, the former owner of Anker BV. These charges
have now ceased following the acquisition of Anker BV by the Company.
Goodwill impairment in both 2003 and 2004 relates to the carrying value of
goodwill in the Group's French subsidiary.
The deferred compensation plan was established by Anker BV. Under the plan
certain members of the Group's management are entitled to share in the
consideration payable to Anker Holdings LLC, following the admission of the
Company to AIM. The final amounts payable are calculated by reference to the net
proceeds of sale over the twelve months to 23 December 2005 (including proceeds
arising from repayment or refinancing of debt). All amounts due to participants
under the plan are payable by Anker BV but will be funded by Anker Holdings LLC.
Although there is no cash cost to the Group or impact upon shareholders' net
equity, accounting rules specify that the payments should go through the Profit
and Loss account, with the receipts going through reserves as a capital
contribution.
Goodwill amortisation
Goodwill amortisation of Euro 2.3 million (2003: Euro 2.8 million) relates to
the goodwill on the balance sheet of the Anker BV group. Following the
acquisition of Anker BV the goodwill on the consolidated balance sheet of Anker
Plc was Euro 128.8 million and applying the Company's policy of a 15 year
amortisation period, the goodwill amortisation charge in 2005 will be higher at
approximately Euro 8.6 million.
Goodwill as shown in the audited accounts is approximately Euro 19.0 million
higher than stated in the Admission Document, primarily due to the
reclassification of the net liabilities of the Anker BV group on acquisition.
Tax
The Group's tax credit of Euro 1.0 million (2003: Euro 1.3 million) consists of
a current tax charge of Euro 0.3 million (2003: Euro 0.1 million) offset by a
deferred tax credit of Euro 1.3 million (2003: Euro 1.4 million). There are
significant tax losses available in many of the Group's major businesses, not
all of which are recognised as a deferred tax asset, and as a result it is
expected that the tax charge will remain below the standard rate for a number of
years.
Earnings per share
Proforma earnings per share figures have not been provided as they are not
considered to be meaningful since, among other factors, the goodwill
amortisation charge in the proforma accounts is not representative of the charge
that is expected going forward.
Cash flow and working capital
The Group has placed particular emphasis on controlling working capital over the
last two years. In particular stock levels have almost halved from Euro 26.0
million at December 2002 to Euro 13.1 million at December 2004. This reflects
not only a much greater discipline on purchasing but also the identification and
disposal of surplus stocks. It also highlights how the business is shifting its
emphasis away from hardware towards software and professional services.
The benefits from the Group's improved working capital control are seen in its
pro-forma operating cash flow as below:
Proforma Proforma
12 months ended 12 months ended
31 Dec 2004 31 Dec 2003
Euro millions Euro millions
Operating loss (5.7) (15.1)
Depreciation and amortisation 7.9 8.1
Decrease in stocks 5.1 7.4
(Increase) / decrease in debtors (3.4) 2.6
Increase / (decrease) in creditors 0.7 (0.7)
(Decrease) / increase in provisions (2.2) 3.2
Deferred compensation plan 6.2 -
Net cash inflow from operating activities
(after non-recurring management charges) 8.6 5.5
Bank and other loans
As stated in the Admissions Document at the time of the IPO, it is the Group's
intention to refinance the loans due to Anker Holdings LLC at the earliest
opportunity and discussions are currently being held in order to achieve this.
Pensions
The Group has adopted FRS17 'Retirement Benefits' in these financial statements.
The effect of this is to reflect a net pension liability of Euro 4.1 million in
respect of its defined benefit pension schemes.
These schemes are primarily in the UK and further accrual of benefits under
these UK defined benefit schemes stopped several years ago. In calculating the
liability on the balance sheet the Group has adopted the latest mortality
tables, as advised by independent actuaries.
Stephen Jones
Chief Financial Officer
Group profit and loss account
Unaudited proforma (Note 2)
------------------------------------------
29 day
period Year ended 31 December 2004 Year
Note ended 31 Continuing Discontinued Total ended 31
December business business December
2003
2004
Eurom Eurom Eurom Eurom Eurom
Turnover 4.1 154.8 2.6 157.4 170.9
--------------------------------------- ----- --------- -------- ------- ------- -------
Cost of sales before exceptional item (1.4) (52.5) (2.3) (54.8) (63.2)
Exceptional item - - - - (4.4)
--------------------------------------- ----- --------- -------- ------- ------- -------
Cost of sales (1.4) (52.5) (2.3) (54.8) (67.6)
Gross profit 2.7 102.3 0.3 102.6 103.3
--------------------------------------- ----- --------- -------- ------- ------- -------
Total operating expenses before
goodwill amortisation and
exceptional items (2.4) (89.4) (0.9) (90.3) (96.5)
Goodwill amortisation (0.2) (2.3) - (2.3) (2.8)
Exceptional items 3 - (14.8) (0.9) (15.7) (19.1)
--------------------------------------- ----- --------- -------- ------- ------- -------
Total operating expenses (2.6) (106.5) (1.8) (108.3) (118.4)
--------------------------------------- ----- --------- -------- ------- ------- -------
Total operating profit before goodwill
amortisation and exceptional items 0.3 12.9 (0.6) 12.3 11.2
Goodwill amortisation (0.2) (2.3) - (2.3) (2.8)
Exceptional items 3 - (14.8) (0.9) (15.7) (23.5)
--------------------------------------- ----- --------- -------- ------- ------- -------
Operating profit/(loss) on ordinary
activities before taxation 0.1 (4.2) (1.5) (5.7) (15.1)
Other interest receivable and similar
income - 0.1 - 0.1 0.7
Interest payable and similar charges 4 (0.1) (2.8) - (2.8) (3.9)
--------------------------------------- ----- --------- -------- ------- ------- -------
Profit/(loss) on ordinary activities
before taxation - (6.9) (1.5) (8.4) (18.3)
Tax on profit/(loss) on ordinary
activities 5 - 1.0 - 1.0 1.3
--------------------------------------- ----- --------- -------- ------- ------- -------
Retained profit/(loss) for the period - (5.9) (1.5) (7.4) (17.0)
--------------------------------------- ----- --------- -------- ------- ------- -------
Basic and fully diluted EPS -
---------
Group balance sheet - As at 31 December 2004
Note Eurom Eurom
Fixed assets
Intangible assets 6 128.6
Tangible assets 4.3
-----
132.9
Current assets
Stocks 7 13.1
Debtors 8 53.2
Cash at bank and in hand 6.8
-----
73.1
Creditors: amounts falling due within one year 9 (56.8)
-----
Net current assets 16.3
-----
Total assets less current liabilities 149.2
Creditors: amounts falling due after more than one year 10 (46.1)
Provisions for liabilities and charges 11 (8.7)
-----
Net assets excluding pension liabilities 94.4
Pension liabilities
Total of defined benefit schemes:
With net assets 0.1
With net liabilities (4.2)
-----
12 (4.1)
-----
Net assets including pension liabilities 90.3
-----
Capital and reserves
Called up share capital 30.1
Share premium account 60.2
Profit and loss account -
-----
Shareholders' funds 90.3
-----
Group cash flow statement
29 day period ended
31 December
2004
Eurom Eurom
Net cash inflow from operating activities 2.0
Acquisitions
Consideration for acquisitions in the period (106.9)
Net cash acquired with subsidiary undertakings 4.8
-----
Net cash outflow from acquisitions (102.1)
Financing
Issue of new shares to finance acquisition 90.3
New debt to finance acquisition 16.6
-----
Net cash inflow from financing 106.9
-----
Increase in net cash in the period 6.8
-----
Reconciliation of movements in shareholders' funds
29 day period ended
31 December 2004
Eurom
Profit for the financial period -
New share capital subscribed 90.3
Closing shareholders' funds 90.3
Notes to the preliminary announcement
1 Basis of preparation
The financial information contained in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. Copies of the directors' report and the audited financial statements for
the period ended 31 December 2004 will be posted to shareholders in due course
and may be obtained thereafter from the Company's registered office at Crompton
House, Barrs Fold Road, Wingates Industrial Park, Westhoughton, Bolton, BL5 3XP.
2 Unaudited proforma figures
The directors have included within the Group's financial statement the unaudited
trading results of the businesses acquired by the Company for the 2003 and 2004
calendar years.
The unaudited proforma figures have been prepared in accordance with UK
generally accepted accounting principles (except for the note relating to
discontinued activities, which does not meet the criteria regarding materiality
as laid down in FRS3 'Reporting Financial Performance'), using accounting
policies consistent with those used to prepare the audited financial statements
for the 29 day period ended 31 December 2004.
No balance sheet and cash flow comparative information has been provided since,
in the opinion of the directors, such information serves no meaningful purpose.
3 Exceptional items
29 day Unaudited proforma
Period ended Year ended Year ended
31 December 31 December 31 December
2004 2004 2003
Eurom Eurom Eurom
Restructuring and re-organisation costs
Redundancy and social costs - 1.1 9.0
Property costs - 0.3 1.9
Stock provisions - - 4.4
Other - 0.1 0.2
---- ---- ----
- 1.5 15.5
Goodwill impairment - 3.3 3.0
IPO related costs - 6.2 -
Costs related to admission to AIM - 0.4 -
Corporate costs - - 1.6
Non-recurring management charges - 4.3 3.4
---- ---- ----
- 15.7 23.5
---- ---- ----
4 Interest payable and similar charges
29 day Unaudited proforma
Period ended Year ended Year ended
31 December 31 December 31 December
2004 2004 2003
Eurom Eurom Eurom
On external bank loans and overdrafts - 0.3 0.5
On loans due to Anker Holdings LLC 0.1 2.2 3.2
Finance charges payable in respect
of finance leases and hire purchase
contracts - 0.1 -
Expected return on pension scheme
assets - (1.1) (1.0)
Interest on pension scheme liabilities - 1.3 1.2
---- ---- ----
0.1 2.8 3.9
---- ---- ----
5 Taxation
29 day Unaudited proforma
Period ended Year ended Year ended
31 December 31 December 31 December
2004 2004 2003
Eurom Eurom Eurom
Foreign tax - current tax on income
for the period - (0.3) (0.1)
Deferred tax credit - 1.3 1.4
---- ---- ----
Net tax credit - 1.0 1.3
---- ---- ----
6 Intangible fixed assets
2004
Eurom
Cost - on acquisition of Anker BV group 128.8
Amortisation (0.2)
Net book value 128.6
Fair value adjustments have been made to the book value of the assets and
liabilities acquired to adjust, where applicable, the carrying value of certain
assets and liabilities. These fair values are preliminary and will be further
reviewed in 2005. Goodwill is being amortised over fifteen years.
7 Stocks
2004
Eurom
Spare parts 7.8
Work in progress 0.6
Finished goods and goods for resale 4.7
----
13.1
----
8 Debtors
2004
Eurom
Trade debtors 39.6
Prepayments 3.0
Deferred tax assets 4.1
Other debtors 6.5
----
53.2
----
9 Creditors: amounts falling due within one year
2004
Eurom
Bank loans 7.5
Obligations under finance leases and hire purchase contracts 0.3
Payments received on account 0.6
Trade creditors 8.8
Taxation and social security 6.4
Other creditors 5.8
Deferred income 21.7
Accruals 5.7
----
56.8
----
10 Creditors: amounts falling due after more than one period
2004
Eurom
Bank loans 1.6
Loans due to Anker Holdings LLC 43.3
Other loans 0.6
Obligations under finance leases and hire purchase contracts 0.6
----
46.1
----
11 Provisions for liabilities and charges
2004
Eurom
Exceptional IPO related costs 5.0
Deferred consideration 1.3
Vacant properties 1.1
Warranty 0.4
Others 0.9
----
On acquisition and at the end of period 8.7
----
12 Pension scheme
2004
Total Total liabilities Net
assets liabilities
Eurom Eurom Eurom
UK defined benefit schemes 23.5 (28.9) (5.4)
Non-UK defined benefit schemes 2.1 (2.4) (0.3)
---- ----- ----
Net pension liability 25.6 (31.3) (5.7)
---- ----- ----
Associated deferred tax asset 1.6
----
Net pension liability less associated
deferred tax asset (4.1)
----
This information is provided by RNS
The company news service from the London Stock Exchange
END
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